Advertisers relieved as Google retains cookie phase-out, but what about consumer privacy?

After years of speculation and several deadline shifts, Google has opted to retain third-party cookies in its Chrome browser. Initially, the tech giant planned to phase out third-party cookies by late 2023, as announced in June 2021. This deadline was later extended to 2024, with the promise of new tracking technology to take their place. In early 2024, Google Chrome restricted third-party cookies for 1% of users, setting the stage for a complete phase-out by early 2025.

A survey conducted in late 2022 revealed that 75% of marketing and customer experience leaders heavily relied on third-party cookies. Additionally, 45% reported spending at least half of their marketing budgets on cookie-based activations, and 64% planned to increase their spending on such activations in 2023. Notably, about 90% of marketers admitted they weren’t ready to go cookie-less.

This new update has, therefore, brought immediate relief to digital advertisers, with experts viewing Google's decision as a rational step.

Reacting to the update, Chaaya Baradhwaaj, Founder - Managing Director at BC Web Wise, said, “Google's decision to retain third-party cookies is a lifeline for advertisers. It provides much-needed stability and allows them to continue their current targeting strategies while they adapt to the evolving privacy landscape.”

Echoing this sentiment, Manas Gulati, Co-Founder and CEO of ARM Worldwide, said, “Google's decision to maintain third-party cookies in Chrome brings immediate relief to advertisers, allowing them to continue using their established data collection and personalised ad strategies without disruption. This move ensures stability and continuity, enabling advertisers to leverage the existing infrastructure and methodologies that have been important for targeted advertising and audience insights.”

Shibu Shivanandan, Founder and CEO of PivotRoots, a Havas Company, added, “Google's announcement seems to be a more rational approach to solving the privacy problem. Cookies are non-personally identifiable identifiers unlike mobile numbers and email IDs. It is less intrusive if they collect user data with consent, as you can’t do much with a bunch of alphanumeric strings.”

Prashant Puri, Co-Founder & CEO of AdLift, also weighed in: “Google's decision to continue supporting third-party cookies in Chrome browsers has significant implications for advertisers. This extension provides more time for transitioning strategies and technologies away from reliance on third-party cookies, ensuring stability in campaign performance and measurement. Advertisers will maintain access to third-party data for creating targeted ads, which aids in building detailed user profiles and delivering personalised advertising, leading to higher engagement and conversion rates.”

Retraction seen as a temporary reprieve

While Google has been delaying its plans, other browsers like Firefox and Safari have already implemented total cookie protection by default. This stark contrast has prompted advertisers to emphasise that despite Google's decision, reliance on third-party data should not be a long-term strategy. Strengthening first-party data and exploring contextual targeting strategies are recommended.

“This is a temporary reprieve,” said Darpan Sharma, CEO & Strategist at Digistreet. “While advertisers can hold onto familiar targeting methods for now, it's crucial to remember that this is a delay, not a dismissal. Investing in first-party data collection and contextual targeting strategies remains vital for long-term success.”

Manas Gulati highlighted the consumer perspective, noting, “81% of people feel that how a company handles their data reflects how much it values them as customers. This highlights the importance of moving beyond just cookies. Advertisers should focus on strengthening their first-party data collection, exploring contextual targeting, and investing in privacy-focused technologies.”

Prashant Puri also underscored the shifting industry trends. “Despite the continued support for third-party cookies, the industry trend is shifting towards leveraging first-party data, encouraging advertisers to invest in building direct consumer relationships and enhancing data collection from owned channels.”

Concerns about consumer privacy

According to many surveys, it is evident that consumers are more receptive to sharing their personal data with companies they trust. Thus, the main objective behind getting rid of third-party cookies was to provide more privacy to consumers. Now that the tech giant has decided to keep the cookies, this could mean a significant threat and potentially compromise consumer privacy.

"While Google claims to offer more user control, the reality is that third-party cookies inherently compromise privacy,” Chaaya Baradhwaaj said. 

Prashant Puri echoed these concerns. He said, “Google's decision to continue supporting third-party cookies could compromise consumer privacy by allowing advertisers to continue tracking user behaviour across different websites. This ongoing use of third-party cookies means that concerns over data privacy and the potential misuse of personal information remain relevant.​”

At the same time, some believe there's a potential middle ground. Chetan Asher, Founder & CEO, Tonic Worldwide commented, “It seems that Google intends to balance user privacy with the needs of advertisers, allowing users to decide and control how their data is transacted.”

Optimism for Privacy Sandbox

However, some advertisers have a positive outlook on Google’s updated approach to enhancing user choice. This update will enable users to make informed decisions about their web browsing, with the flexibility to adjust these settings at any time.

Their statement read, “Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators and will engage with the industry as we roll this out.”

Google’s solution, named ‘Privacy Sandbox,’ aims to balance privacy and advertising needs. This initiative seeks to develop a set of open standards to enhance web privacy while supporting the digital advertising ecosystem.

Advertisers are optimistic about the ‘new experience on Chrome.’ They predict this will make privacy choices easier and safer for users. However, they acknowledge that adapting to these changes may present challenges.

Chaaya Baradhwaaj said, “Google's 'new experience' is a step in the right direction, but it remains to be seen if it will meaningfully empower users. Clear and simple privacy controls are crucial. As for advertisers, this change could create additional complexities as they navigate different user preferences."

Chetan Asher said, “As we await the final details from Google on this new experience in Chrome, it's difficult to gauge how it would impact advertisers as of now. In my understanding, it should make privacy choices easier and safer for users while keeping advertisers ready to advertise to those who consent.”

Manas Gulati said, “While the exact details of Google's new experience are still pending, any system that enhances user control over data collection and usage and offers more transparency would be a positive step toward a privacy-focused advertising ecosystem.

We expect that this new approach will improve personal data control and build greater trust among users. For advertisers, this change represents a shift toward privacy-centric strategies, requiring adaptation to new methods of data collection and targeting while prioritising user consent and preferences. Staying agile and embracing these evolving standards will be essential for maintaining effective marketing practices.”

As the digital landscape continues to evolve, experts opine that advertisers will need to adapt to new methods that prioritise user consent and transparency. The future of digital advertising will depend on finding a balance between effective targeting and respecting consumer privacy, aiming to create a more secure and trustworthy online environment.