When Google coughs, the ad industry covers its mouth.
This week, the world’s biggest advertising platform announced, with little fanfare, that it would allow users of its Chrome browser to block third-party cookies. Google will put the new controls in place later this year.
The move is motivated by privacy, according to Google’s senior vice-president for ads and commerce, Prabhakar Raghavan. Soon, consumers will have more control over how their browsing on Chrome is tracked and shared with third parties.
This means that developers will now need to specify which cookies work across sites, and could therefore be used for tracking, versus which ones are for a single domain (those that typically help users save important information such as login details).
Raghavan explained: "People prefer ads that are personalised to their needs and interests – but only if those ads offer transparency, choice and control. However, the digital advertising ecosystem can be complex and opaque, and many people don’t feel they have enough visibility into, or control over, their web experience."
'Soon you'll be excluding 99% of your traffic'
Google is doing this because it sees more regulation over internet privacy further down the line. The company has already fallen foul of the European Union's GDPR because of the way it has gained consent from users over how their data is collected, a French regulator has found.
Apple has also proposed similar cookie restrictions on its Safari web browser for Macs and iPhones, as has Mozilla for Firefox.
Ben Barokas, a former Google employee who now runs publisher platform Sourcepoint - a company founded on tackling ad-blocking - points out that while Chrome's cookie crackdown does not go as far as Safari's (that browser will delete first-party cookies after seven days), Google is sensitive to Apple marketing itself as a more privacy-conscious platform.
And, Barokas warns, the move could perversely make things worse for users: "The potential for cookies to be deleted will make any consent preferences a consumer has made temporary, and having to repeatedly ask the user for their preferences will damage the user experience.
"We think that publishers will need to double down on strategies that enable the development of one-to-one relationships with audiences and find ways to provide more durable consent strategies that tie to actual users, and not just to their cookies."
However, online advertisers still rely on cookies for programmatic campaigns, whether they handle this form of media buying in-house or through a media agency.
Brainlabs founder and chief executive Daniel Gilbert tells Campaign that this is the most important issue in the marketing world right now.
"The internet is dying and it's the internet companies that are killing it," Gilbert warns. "The same companies that have generated some of the largest revenues in the world, from paid ads [to] performance marketing.
"Yes, there are split tests and exclusions brands can use as workarounds, but these are terrible long-term solutions. Soon you'll be excluding 99% of your traffic. Brand power comes from their budgets; if they can't measure performance, then digital spend will be slashed, along with internet company revenue."
Pressure is growing to clean up online ad industry
But Google is not just introducing the controls to improve the user experience; it is responding to calls from some of the world’s biggest advertisers to make the online ad industry more transparent and accountable.
Just last month, Procter & Gamble’s chief marketing officer, Marc Pritchard, delivered the latest in a series of public challenges to the media industry over the past two years to clean up the online supply chain.
Pritchard, who has warned that marketers "have no idea whether their ad is reaching the same person over and over again", has proposed using a tag that can be placed on all ads for all formats across digital.
While P&G’s warnings carry a great deal of weight as the world’s biggest advertiser, spare a thought for challenger brands, whose very existence is owed to the internet’s creation of the direct-to-consumer platform.
And even digital-native brands are struggling with programmatic media, as Deliveroo’s global director of performance marketing, Andrew Wilson, discussed at Campaign’s Performance Marketing 360 conference in Brighton this week.
Speaking about Google’s proposed cookie changes, Wilson predicted that "third-party cookies will become an even harder thing to integrate and to measure, so programmatic is an ongoing challenge for many business. It’s such a complicated space with so many partners, publishers and a lack of transparency. It’s a challenging one for all websites."
A blessing in disguise?
The problem is that cookies are still viewed by many marketers as the only alternative that provides a full customer view, given the limitations of how companies can collect, maintain and use their own customers’ data. Meanwhile, tech giants such as Google, Facebook and Apple have such large first-party data sets themselves that they are less exposed to further regulation of data collection that may lie ahead.
That said, agency specialists are more optimistic that new solutions in a post-cookie age will solve this issue.
Kevin Joyner, director of planning and insight at digital marketing agency Croud, thinks it is "inevitable" that tracking with third-party cookies will come to an end and that Google and Apple have accelerated this outcome.
He says: "Ultimately, the important thing for the industry is to continue to deliver relevant advertising and communications to consumers and customers. We need to prepare for a cookie-less world, embrace privacy measures and find new and creative ways to connect with users.
"I predict that we’ll see a switch from anonymous cookie-based data management platforms to first-party data-based customer data platforms, which feature user ID tracking for all customers and which therefore reduce reliance on cookies that can expire and be deleted."
He says: "We’ll soon have more data and less cookies, and our media environment will continue to become more complex. So, to future-proof our businesses, marketers need to move beyond basic data analytics and embrace systems that can deal with the constant increase in complexity that we face."
The emergence of a post-cookie world would have a significant impact on Google's business, which is primarly fuelled by its monopoly on search advertising. The company faces a tricky time ahead to ensure meaningful privacy controls while maintaining an attractive advertising platform, especially after recently posting its weakest quarterly growth in three years.