By Simon Halstead, Founder of Halstead Incubation Partners and NDA Columnist
We live in tumultuous times – following our recent election, and the changes to the US Presidential candidates, all of which impact the economic outlook and the ad market, we have another significant surprise.
In an unexpected development – Google have announced they no longer intend to turn off 3PC at the browser level in 2025 and instead are going to move to user-informed decision. We are at a stage where more detail is needed to fully assess the impact of this change
So what does it mean and what happens next?
Firstly, participants in the advertising ecosystem need to await more detail on these proposals and most importantly, we need to wait and see the response from the CMA and the ICO of their view of the proposed changes.
It’s worth noting that there have been a number of recent releases showing the delta that sandbox was delivering – notably from Criteo and Index Exchange. Index showed a 33% decline in cpm. Insights from Our Privacy Sandbox Testing – Index Exchange. Google Ads own published results show that whilst Sandbox targeting campaigns produce better than no cookie results, there remained a significant delta to current cookie performance (-20% for GAM and -18% for Ad Sense).
As the news continues to develop, it’s also noteworthy that in light of this change we won’t see a CMA Sandbox quarterly update, and the indication is the CMA and ICO are coming together to review this strategy change, and their next steps. There has been some indication of unhappiness with the strategy change – UK data privacy regulators ‘disappointed’ in Google’s decision to keep third-party cookies | The Drum
Beyond the regulatory response – What is the outcome of this change
● This ultimately doesn’t change the outcome of a significant reduction of addressability via cookies over time, but it does change the function of the change, with user decisioning impact changes over a different timescale and a different approach
● User lead choices will significantly reduce the pool of addressable cookies. Working through crude maths – and assuming an opt-out rate similar to that seen via ATT on IOS – Cookie-based addressability will potentially drop as low as 15% of total digital media (assuming on 30% consent to continuation)
● Google has committed to continued Sandbox development, Sandbox will still represent one solution, but people and publishers need to invest in a range of solutions.
Addressability will have to be achieved via a range of methods, from probabilistic to authenticated, to contextual to Sandbox solutions
● Focusing on both targeting and measurement approaches remain critical – measurement api’s in Sandbox and IOS webkit continue to have an important role moving forward
It’s also important to understand much more about how the user opt-in approach will occur, and also the implications of how this may interact with consent experiences for publishers.
Will Google gain permission for cookie usage at the browser level, the account level, the tab level or the individual publisher level? – as this approach will have significant impacts on the levels of 3PC-approved users before you get to individual publisher consents and consents for data partners.
Who controls the look, feel and shape of the consumer explanation, and from a CMA perspective – does this create any favourability for Google over other services? What is likely true, is that additional requests will lead to decreases in overall addressability.
This change does not represent that cookies remain forever, or that their current addressability stays intact
So watch this space – this is just another step along the journey – but as addressability declines, it’s important that everyone continues to test and learn alternative and varied solutions – and change the perception of buying.
