Google Ends Plan To Block Cookies, But Businesses Are Way Ahead Of Them

Google Ends Plan To Block Cookies, But Businesses Are Way Ahead Of Them

“This is the way the world ends. Not with a bang but a whimper.”

T.S. Eliot’s famous lines felt particularly apt in the marketing industry this week as Google announced it will reverse its long-standing plan to deprecate third-party cookies from its Chrome browser.

It was an announcement that was simultaneously shocking but not all that surprising,

When they initially announced their plans in 2020, Google committed to phase out third-party cookies by 2022. However, amidst mounting concerns from advertisers (and regulatory icebergs in the UK) the move was delayed several times, most recently back in May. The lack of a specific timeline, in that announcement, was something of a canary in the coalmine.

Advertisers and publishers who rely heavily on third-party cookies for targeted advertising have, unsurprisingly, welcomed the decision. They’ve long argued that the removal of cookies without a viable alternative would disrupt their business models and lead to significant revenue losses.

But for many marketers, including us at Twilio, who had long ago moved away from an exclusive dependence on third-party trackers, does Google’s announcement really change much?

No.

Rather than beholden themselves to an arbitrary depreciation timeline, the best and brightest in the industry have started to adapt themselves to a world that demands personalized experiences balanced with privacy.

The first-party data train has already left the building

It hardly bears repeating, but the success of modern digital marketing depends on highly personalized and precise marketing and advertising campaigns. And since the dawn of the internet, much of the data to fuel that personalization saw consumers tracked – without their consent – through third-party cookies.

But in recent years, three industry-wide changes have seen companies question their dependence on third-party data, and invest in ethical, first-party data strategies.

Trend #1: Consumers pushing back on intrusive practices

With just 40% of consumers saying they trust brands to keep their personal data secure and use it responsibly, consumers have taken matters into their own hands and opted out of advertising driven by third-party cookies.

Whether via ad-blockers installed in their browser, or by utilizing features such as Apple’s App Tracking Transparency (whereby users can elect to be tracked or not), users have more control in their hands than ever before about how they like to be advertised to (or in many cases, not).

For those hoping younger consumers might find third-party advertising more palatable, I've some unfortunate news.

The desire for privacy is particularly important to people in their 20s and 30s, who are exercising their data access rights more than any other demographic.

Trend #2: The questionable efficacy of third-party cookies

Despite being the backbone of the digital advertising industry for over a decade, the past few years have revealed that third-party cookies may not be as valuable as previously thought.

Double-counting, stuffing, and bot traffic have regularly led to noisy conversion data, giving publishers a love-hate relationship. Additionally, cookies have always been a poor proxy for identity, with consumer identity match rates hovering between 40% - 60%.

While third-party cookies have certainly allowed advertisers to scale their inventory quickly and easily, they have often done so at the expense of accuracy and impact. Research shows investing in advertising campaigns using first-party data generates up to 2x higher return. (This tracks with the experience of the likes of Domino’s, a Twilio customer.)

Trend #3: The broader web browser landscape

It's crucial to remember that Chrome, while being the dominant browser worldwide, only represents a little over half the browser market. Other popular browsers – such as Apple Safari – have already eliminated third-party cookies and enacted privacy controls around tracking.

Wisdom might dictate that businesses would shun such browsers, and turn to those that facilitate third-party tracking. In fact, the opposite has happened, and made advertising on Apple more attractive due to its significantly higher conversion rates.

Apple’s decision to enforce stricter controls around third-party tracking has grown their advertising network as a result.

Source: Financial Times

Like Apple, Google has said that users will be allowed to make an “informed choice” about third-party cookies going forward. If Apple’s introduction of ATT is anything to go by (where 75% of individuals opted out of third-party cookie tracking) many users will elect to opt out of tracking on Chrome too, reducing the reach of third-party cookies long-term.

If Google’s announcement tells us anything, it's that the investment in developing non-cookie alternatives has been worthwhile.

Google’s about-face may grab the headlines, but consumer preferences around privacy, government regulations, and the broader technology landscape are what we should really be anchoring on.

In a world where 50% of the web is already cookieless, the industry should continue down the path it was already on – developing strategies that prioritize both privacy and effectiveness, regardless of the evolving cookie landscape.