Google announced on Wednesday that it will not build alternate identifiers to track individuals as they browse across the web, nor will it use them in its products. Within 48 hours, some of adtech’s biggest stocks took a steep dive. But is the market’s concern warranted? We think probably not — there’s a lot of Chicken Little going on for an announcement that really shouldn’t have come as much of a surprise to anyone.
When the ad giant announced in January 2020 that its Chrome browser would be deprecating third-party cookies in two years, it did so in the name of consumer privacy. But the move sent shockwaves through the ad industry, given Chrome’s scope. Third-party cookies are used for everything from audience data collection and segmentation to ad targeting and personalization to granular attribution measurement. An industry that had tracked and targeted consumers in a largely unfettered way was finally facing the real consequences of its disregard for peoples’ attitudes toward, level of comfort with, or lack of control over the use of their data for advertising purposes.
And Google’s myriad announcements since then — its Privacy Sandbox work, including its early TURTLEDOVE proposal and FLoC work — haven’t so much provided full clarity on Google’s ultimate intentions as fueled ongoing industry debate on “the Google question.”
With this backdrop in mind, here’s our take on Google’s announcement after many reviews of the news itself and some careful reading between the lines:
- Google wants to burnish its reputation as privacy-friendly in the face of much competition from other browsers and under the watchful eyes of privacy advocates, regulators, and legislators alike, so announcing that it would never pursue a cookie alternative that enables cross-site tracking makes reasonable sense.
- It also “owns” millions of direct consumer relationships (read: first-party data, much of it authenticated), which it can continue to benefit from within its own massive ecosystem, à la a classic walled garden.
- Its demand-side platform, ad exchange, and other demand- and supply-side tools will take a hit, as those platforms will be more limited in which marketer and publisher use cases they can enable. But for Google, the hit is worth the upside, where Google is thinking about the company’s long-term sustainability and business growth.
That said, there remain many unanswered questions, chief among them how the Google ecosystem will interact with the myriad identity graphs and solutions in market. Brands want addressability and won’t give up on it without a fight. But they should also want an open internet that values and respects consumer transparency and choice. In theory, then, solutions like those based on first-party consented, authenticated relationships should be on the right side of Google’s intent with this announcement. But the ad industry’s track record in following the spirit, not just the letter, of consumer privacy protections isn’t great. So the onus is on every adtech player, publisher, and brand to prove that a concern for providing consumers with clear and transparent choice, and respecting privacy, isn’t just lip service.
In our research, we have been advocating for marketers to adopt a framework based on consumer transparency and choice, the delivery of clear value, and more respect for the depth of the relationship itself (or lack thereof) between a brand and every consumer it wants to interact with.
We see a future of data stratification in the browser-based advertising world. Addressability will range from “significant” to “nonexistent” along a spectrum of increasingly large data tranches: at the top of the data pyramid, consented and authenticated first-party data; at the bottom, completely non-audience-based data (think contextual), with anonymous “cohort”-style segments (like federated learning of cohorts [FLoC]) falling in the middle.
To that end, the best approach marketers can take — even in the face of current uncertainties — is to embrace a privacy-first marketing strategy, where they pursue addressability only when truly value-adding and appropriate (such as targeting and personalizing ads to existing customers or those who have otherwise provided consented authentication). And where addressability really isn’t needed, such as in pure prospecting efforts, marketers must wholly invest in less intrusive forms of targeted media buying, such as using cohort- or other non-audience-based approaches.
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