What’s happening with cookies?

Ad Industry News
Last updated: February 16, 2024 | by David Loschiavo
third-party-cookies-cookieless

This post was most recently updated on February 16th, 2024

In 2019, Google initially announced third party cookies would be deprecated in the interest of protecting user privacy. The deadline was kicked back multiple times for various reasons. Google is now slated to phase out support for the third party cookie late 2024.

But first, what’s a third party cookie? What’s it used for and why should publishers care?

Third party cookies are cross-domain cookies often set by advertisers, agencies, and DSPs to track users across different sites.  This is in opposite to first party cookies, or those used by the publisher themselves and are unaffected by the change

The assumption as presented in media repeatedly, is that Google eliminating third party cookies would obliterate digital advertising, sending the industry back to the stone age.  Although some publishers should expect some hiccups in the status quo of operations as with every major industry change, these sky-is-falling cookiepocalypse predictions are doomsday cult prophecies at best, and clickbait at worst.

Why?

For starters, cookiepocalypse already arrived in 2020. Safari, Firefox, and Edge started blocking third party cookies by default years ago. The revenue on those platforms didn’t go to zero. For sites with high traffic from users with those browsers, they already took those revenue hits. Many publishers have recovered from any hiccups then, and even gone further, with session RPMs in Safari, Firefox, and Edge often exceeding Chrome at historically high ratios, despite having no third party cookies and no replacement.  Agencies and advertisers and DSPs on the buy-side have already been handling the deprecation of third party cookies for multiple years now. In short, cookiepocalypse already came, and the victors are already claiming the spoils.

Second, Google’s plan is not to block all advertising tracking across the internet. They’re only talking about Chrome, and they’re not blocking advertising tracking either — it’s just very specific parts of the third party cookie model that will be blocked.  Unlike Safari, Firefox, and Edge, which blocked third party cookies with no replacement, Google has invested heavily in figuring out a privacy-first replacement model.  Google is switching to a privacy sandbox where Google has run and tested over a dozen different models on what information is accessible and how. Their prior leading model was FLOC, and in testing, advertisers saw minimal changes in advertising performance while publishers saw minimal change in advertising revenues. Then came FLEDGE, which fixed some privacy issues with FLOC, while explicitly allowing advertisers to generate advertising interest segments for users, just with anonymized aggregation rather than individual user tracking.  They’ve adjusted and are now using what they call the privacy sandbox.  The sandbox is in testing on 1% of users until late 2024, and the model is still subject to change.  Regardless, the buy-side has been handling cookieless advertising since 2020, and the replacement is already functionally very near advertising performance of third party cookies.

In other words, advertising is not being eliminated on Chrome — third party tracking cookies are simply being replaced by anonymous advertising segmentation.

And finally, for all but the largest publishers on the internet, there are very few things the average publisher needs to actually do to prepare.

  • Publishers running Google AdSense or AdExchange exclusively are already covered by Google’s privacy sandbox management.
  • Publishers running direct sales standard and sponsorship campaigns weren’t traditionally using third party cookies in the first place.
  • Publishers running PMPs, header bidding, and managed demand will not only get sandboxed audience segmentation, but all of the rest of the workarounds the industry has been doing since 2020, including first party identification protocols and other similar segmentation technology.

That’s not to say there won’t be any issues — as with all industry-wide tech changes, there will be hiccups.  The point is that for most publishers, this will be minimal or even unnoticeable.  With that said, publishers over 1 billion monthly impressions should consider strategizing and hedging their options with ad tech engineering experts.  We’ve already paid our publishers more than $100 million, so contact us today and let us show you how we can help!

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