What Does Google Keeping Cookies Mean for Advertising?

In a major reversal, Google announced last week that its Chrome web browser would continue to accept third-party cookies — the digital codes that let websites track where you’ve been on the internet — after four years of trying to develop a system without them.

Instead of eliminating cookies, Google “will be introducing a user-choice prompt, which will allow users to choose whether to retain third party cookies,” according to the UK’s Competition and Markets Authority (CMA), which has been overseeing Google’s plan to discontinue cookies. Chrome users can already choose to block cookies in the browser’s settings.

There aren’t details on exactly how the prompt will work, as Google said it is “proposing” a new approach, and the CMA plans to accept comments on the change for a few weeks.

In a blog post, Google said that through testing, it realized that killing off third-party cookies in its browser transition required “significant work by many participants” and would impact publishers, advertisers, and virtually anyone involved in online advertising. Anthony Chavez, VP of Privacy Sandbox, Google’s project to replace cookies, said, “We’re discussing this new path with regulators, and will engage with the industry as we roll this out.”

Google’s move to end cookies in Chrome, the world’s most popular web browser and the only major one that still supports cookies, has experienced several delays as both digital advertising companies and regulators objected to the plan and Google’s proposed replacement technologies.

Beyond new privacy risks, concerns include the potential of harming competition and unfairly benefiting Google’s own advertising business. If many consumers block cookies, some industry executives told the Wall Street Journal that Google’s search and YouTube ad business stand to benefit because they rely more on internal company data than cookies.

Some digital agencies may be relieved since the elimination of cookies was expected to drive down online ad prices, as cookies enable a higher level of cross-site personalization, targeted advertising, and website analytics. Research by UK-based digital identity resolution vendor Acxiom earlier this year also found that only 55% of marketers had yet prepared their adtech and martech stacks for an internet without third-party cookies.

Advertisers, adtech companies, and web publishers may also reconsider their rush to collect their own first-party data on consumers, as well as investments in retail media.

“Many retailers might have believed that their first party data would be hugely valuable in a cookie free world. Now those views will have to be revisited,” Colin Lewis, director at Retail Media Works, told Internet Retailing. “Many RMNs [retail media networks] will now be asking themselves what price to change for their first party audiences — and, whatever the price and forecast revenues for those, how much should it be reduced.”

Lewis added, “For agencies, they can still say to clients for the time being that Chrome users will provide excellent signals — something long since gone from Apple. For brands, time will tell whether they will shift budgets or not.”

Dimitrios Koromilas, director of EMEA platform services at Acxiom, told TechTarget, “Even with Google’s latest decision on cookies, first-party data remains the new currency across the enterprise, not just for the marketing department. Gathering information to create a holistic view of your customer base, which can only be done with first-party data, is pivotal in helping businesses stand out from an increasingly competitive crowd.”