Google-Eliminating 3rd Party Cookies

Bloomberg Businessweek July 20th 2020 pp8-10 Remarks “This Is the Way the Cookies Crumble” “Google is redefining the way web ads are sold. It’s a boost for some and risky for others-like Facebook” By Alex Webb

Looking back Cookies, small text files placed on your device when you visit a website, were initially conceived by Netscape to “remember what you’d placed in an e-commerce basket, or simply your preferences”. After a while advertisers realized they could track your preferences etc. by placing their own cookie-called a 3rd party cookie and further-down-the-road others made business by selling that information. According to Will Schobeiri (CTO at Media Math Inc.) “The debate now is who gets to control that [information] and make decisions about the user and the user’s privacy “? Apple/Safari and Mozilla/Firefox have made privacy a key selling point. Now Google, with Chrome as the number one browser (64% market share), “announced that it would phase out third-party cookies over the following 18 months”. In some ways Google is preempting backlash by following the lead of European and California agencies who have taken actions to give “citizens more control over their data and letting them opt out of ad-tracking efforts.”

Now the World Wide Web Consortium (W3C) a large and well represented industry group is focusing on “what comes next”. Everyone is seeking an advantage but Google with $162B in 2019 “revenue makes it the gatekeeper for almost half of all global digital spending.” Google has the biggest “ad exchange (where brands bid against one another programmatically to show you an ad every time you open a web page)…”.

After these changes, if you are using Chrome Google can still track. FaceBook is number two in ad revenue but many small companies are concerned as well about losing business or going out of business if unable to adjust. So how will others work around these new changes that would put their business at risk? One countermeasure is creating their own first party data by having its users register and complete “an optional questionnaire” and in doing so letting users know they will not share information. They can then also enter into agreements with brands to combine the brands and their own first party data "behind-the-curtain" to get better and more value-added targeting. Without control it's hard to value an advertisement as it may be placed at a prolific or a seldomly "clicked" website.

As it turns out, back-in-the-day with the advent of web advertising many in the print media, in an effort to jump start their online presence, outsourced web advertising. In doing so they lost control and saw their ad revenue drop from $49B (2006) to $14B (2018). Taking control now can be a windfall.

Even with available “work-arounds” removing 3rdParty cookies fuels anti-trust cries against Google. It might be wise for Google to play well with others by “Sacrificing a chunk of the $22 billion a year it makes from the Google Display Network”.