Google Leaves Cookies on the Table: What Financial Marketers Must Know

The search giant continues to develop its experimental 'FLoCs' method of grouping consumers by interest and behavior. But it says the demise of third-party cookies will need two more years to proceed smoothly. Meanwhile some players say Google isn't the boss of them.

An Internet Cold War has been raging behind the screens of consumers while they blithely search for products, watch videos and scan social media.

Since Google announced the impending end of its support for third-party cookies, originally to occur by 2022, active digital marketers who depend on web metrics to make ad purchases, or to trust programmatic buys, have watched as the search giant has tinkered with its replacement concept and as other players have assisted, resisted or impeded Google’s plans.

Now the plot thickens. In late June 2021 Google announced that the initial phases of its efforts to build the substitute for third-party cookies have demonstrated that more time is needed. While more details will be forthcoming, Google said that third-party cookies will not be excised from Chrome until late 2023.

“To make this happen, we believe the web community needs to come together to develop a set of open standards to fundamentally enhance privacy on the web, giving people more transparency and greater control over how their data is used,” wrote Vinay Goel, Privacy Engineering Director at Google’s Chrome operation in a company blog.

He added that Google wants the industry to work in concert to assure that third-party cookies are not replaced with alternative forms of tracking individual behavior and to discourage “covert approaches like fingerprinting.” The latter involves using an algorithm to collect information about the software and hardware of a remote computing device for the purpose of identifying the user sufficiently to track behavior.

As recounted in previous coverage of the “cookiepocalypse” by The Financial Brand, the situation is far different from a government agency setting standards for some activity and requiring all players to abide by the rules.

When the Referee Also Plays:

Google has a key role as arbiter, in part because the popularity of its Chrome browser and its near ubiquitous search engine. However, Google is also a player on the field — and a big one.

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Many Parties Have Dogs in the Advertising/Search Fight

As various commentators have pointed out a big part of the reason Google is taking steps to replace the cookies with a more privacy-friendly mechanism is that it wants to maintain the general pattern of sites providing free content made practical through advertising sales. For the most part, those sales depend on giving advertisers or their proxies some sense of who will likely see their ads. Something has to pay to keep the lights on.

Search and web advertising spawned a league of new businesses. So now the livelihoods of countless companies that depend on or that would compete with Google in some way are riding on how the cookie shutdown comes out.

Is the Cold War analogy too strong? It’s not a John le Carré or Tom Clancy plot, full of twists, counterintelligence and more, but consider a few developments in just the last couple of months:

  • Amazon blocks FLoCs. Google’s tool, under development, is called Federated Learning of Cohorts, or FLoCs, which we explain below. Digiday reports that most of Amazon’s sites, including Amazon.com, Zappos.com and WholeFoods.com, are stopping the Chrome with FLoCs browser from gathering data about people’s use of the sites. The publication found website code on the Amazon sites that tech experts confirmed was there to stymie FLoCs. Digiday says the effort not only hurts Google’s attempt to dominate the debate, but “could give Amazon a leg up in its own efforts to sell advertising across what’s left of the open web.”
  • Google may be using you to test FLoCs. If you’ve wondered who the search giant tapped to test the first round of FLoCs, it may be you. The Electronic Frontier Foundation, an internet gadfly organization, wrote in March 2021 that “a switch has silently been flipped in millions of instances of Google Chrome: those browsers will begin sorting their users into groups based on behavior, then sharing group labels with third-party trackers and advertisers around the web.” The foundation, which opposes FLoCs, countered with a special site that lets you test your Chrome to see if you were drafted. It gives advice on what to do if you were.
  • Duck Duck Go never ducks a chance to give it to Google. Duck Duck Go is an alternate browser that claims to engage in no tracking at all. It frequently attacks the traditional tracking- for- advertising model on social media. A tweet by founder Gabriel Weinberg: “The Internet has been overrun by companies that have made it their business model to covertly track, manipulate, and exploit people. This needs to stop. Creepy advertising isn’t the only way to run a profitable business online.”

We could go on, let’s just say this is a battle of multiple fronts.

“The resounding sentiment among technologists, marketers and publishers … seems to be, if not surprise, then relief.”

— The Drum, covering the announced delay

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Google’s Postponement Isn’t a Cancellation

In its June 2021 announcement Google noted that multiple schemes were in trial and that it hopes to release key technologies by late 2022 so developers can start adopting them. During this period publishers and advertisers would be expected to begin changing over to the new approach, whatever form that eventually takes. Assuming no further delay, the blog stated, the phaseout of cookies would begin in mid-2023 and finish by the end of that year.

For the sake of clarity it’s worth reviewing what will go away. “Third-party cookies” refers to tracking software used by advertisers and advertising exchanges that broker and place digital ads and it is a key part of the programmatic digital ad business. By contrast, “First-party cookies”, generated by websites for their own use, such as streamlining logins for repeat visitors, and for the use of their own advertisers, are not at issue.

Google says it received a good deal of feedback from the first trials of FLoCs and will be blending that input into the next round of testing.

“We believe that the Privacy Sandbox” — Google’s name for the overall project — “will provide the best privacy protections for everyone. By ensuring that the ecosystem can support their businesses without tracking individuals across the web, we can all ensure that free access to content continues,” stated the blog.

Resistance Continues As Google Moves Forward

There are other ideas out there about how to improve privacy and to reduce “creepiness” of web search, as recounted in earlier coverage.

In a newsletter touching on the matter, Benedict Evans, independent tech analyst and commentator, describes the stakes. Everyone likes all the freebies on the web and they don’t want to pay with their privacy, he states. Likewise, the third-party cookie has been an efficient tool for many marketers.

“We have no clarity on what would replace it. No one except Google really wants Google to have the power to make such decisions unilaterally, nor to step into the gap (with FLoCs) by itself.”

— Benedict Evans, tech analyst

Alternate efforts to eliminate cookies without being Google-centric continue, though their utility may ultimately hinge on Google’s cooperation, and that isn’t always there.

Meanwhile, some marketers are working internally to improve means of tracking first-party data, relating to consumers they already know, to better track and serve them. These efforts center particularly on using email addresses and permissions, which underscores the need for gathering clean information in the first place.

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