These are interesting times for the digital advertising industry. In January of this year, Google finally made good on its promise to begin deprecating third-party cookies in Chrome, rolling out tracking protection for 30 million users worldwide. The company promises to continue the rollout throughout the rest of the year.
Third-party cookies have been the de facto standard for targeting, measuring, and reporting on campaigns. And while there are benefits in a standard approach, privacy concerns have forced the industry to develop different approaches.
One of those approaches is Google’s Privacy Sandbox, a proposed set of solutions for online advertising that seeks to replace third-party cookies with strategies that protect user privacy. However, the rollout of Privacy Sandbox has not been smooth.
CMA Objections
In February, the UK’s Competition and Markets Authority (CMA) issued a report saying that Google cannot proceed with deprecation until its concerns are resolved. Specifically, the CMA is concerned that Privacy Sandbox favors Google’s own solutions while hindering those of its competitors.
At issue: the CMA is worried that Privacy Sandbox will allow Google to benefit from user data while limiting its competitors’ access to such data. Additionally, CMA has stated that Privacy Sandbox may prevent publishers and advertisers from identifying fraud as effectively as possible.
Google’s ability to proceed with third-party cookie deprecation is contingent on addressing these concerns to ensure fair competition in the digital advertising space. The company has until April to address these concerns.
IAB Weighs In
The IAB also issued its assessment on Privacy Sandbox, and it was a report that rocked the digital advertising world. The two word summary? “Not impressed.” The IAB’s biggest concern is the potential impact on programmatic. For instance, Privacy Sandbox doesn’t support exclusion targeting, nor does it allow buyers to create a custom audience that can be used across domains that are owned by multiple publishers. This can lead to campaigns that are far less effective than those using third-party cookies.
Privacy Sandbox offers a Protected Audience API (PAAPI), which, as AdMonsters writes, is “intended to preserve the ability of publishers to monetize Chrome users while simultaneously protecting those users from the perceived intrusiveness of the combined weight of the targeting capabilities of the existing advertising technology marketplace.” But the IAB is worried that PAAPI will mean buyers competing against themselves because PAAPI generates bids for every eligible interest group.
Another concern is the industry’s ability to optimize campaigns based on real time. Rather than track event-based impression and click metrics, Privacy Sandbox will favor aggregated reporting, which the IAB Tech Lab says will make bid loss analysis impossible.
Google responded to these and other concerns raised by the IAB, claiming that the IAB’s analysis “contains many misunderstandings and inaccuracies, which we consider important to correct in order to provide accurate information to the ecosystem.”
Google’s response offers a point-by-point rebuttal to the IAB report. For instance, the IAB report said that look-alike modeling isn’t available in Privacy Sandbox, but Google countered:
“This is an example where a tactic may be achieved by new, more private means. We see learning the aggregate behavior of a seed audience as an excellent use case for the Private Aggregation API. A developer doesn’t need event-level reporting to capture bid stream characteristics of a seed audience. Developers might also consider using Shared Storage to maintain state, perform additional transformations (and pre-aggregations), and mix more cross-site data for aggregate reporting.”
Going Forward
It’s important to keep in mind that there are many alternatives to third-party cookies in the market or coming to market. We are not likely to see a one-size-fits-all approach as we did with cookies. That said, marketers have a range of options for their campaigns, from AI-assisted contextual targeting to first-party data solutions, such as seller defined audiences and the various identity solutions graphs.
Paragon Digital Services is committed to keeping all of our clients updated on these trends, and to recommending the right solutions that meet all privacy regulations while delivering the best possible results for your campaigns.
Get in Touch Today
We can optimize your digital media operations in line with your business objectives to realize better ROI, with consistent quality and speed. Interested in discovering more about digital ad operations compliance standards, reach out to Sujith so we can set up a call.
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