Google’s cookie deprecation plans draw fresh watchdog pushback

UPDATE: February 6, 2024: A Google spokesperson provided the following comment to Marketing Dive after this story’s publication: “We always welcome input from the industry, however, IAB Tech Lab’s report includes dozens of fundamental errors, inaccuracies and instances of incomplete information. While we’re disappointed that IAB Tech Lab released the report in this state, we’re encouraged by the many IAB members who are actively building solutions using the Privacy Sandbox APIs. And we look forward to partnering with the IAB Tech Lab in transitioning the industry toward more private solutions.”

Dive Brief:

Two industry watchdogs are raising concerns about Google’s shift away from third-party cookies in Chrome toward a Privacy Sandbox initiative built on alternative ad-targeting methods.
In separate reports, the IAB Tech Lab and U.K.’s Competition and Markets Authority (CMA) viewed the move as potentially disadvantaging other players in the digital advertising ecosystem and resulting in fresh problems in areas such as ad fraud and brand safety.
The IAB Tech Lab, which has opened its findings for public comment, concluded that the industry is not yet ready for the change while arguing that the tweaks to Chrome do not yet form a “viable business foundation.” The CMA, a regulatory body, emphasized that Google “cannot proceed with third-party cookie deprecation” until its anticompetitive concerns around Privacy Sandbox are resolved.

Dive Insight:

Google delayed the death of the cookie several times after announcing its intentions to kill off the mainstay ad-targeting tactic back in 2020. Now that the search giant’s first stage of its plan to deprecate cookies is in effect, industry watchdogs are sounding alarm bells about the viability of a transition to Privacy Sandbox in its current state. Cookies began winding down for a small percentage of Chrome users in January, with the goal of expanding deprecation more broadly in the second half of 2024. Privacy Sandbox is built around two alternative ad-targeting solutions, a Topics API based on user interests and a Protected Audience API, formerly known as FLEDGE.

The IAB Tech Lab, a nonprofit consortium for developing best practices for digital advertising, highlighted several key issues it identified with Privacy Sandbox, including how the implementation of an ad exchange and ad server in Chrome could disrupt the current programmatic ecosystem and the loss of data points needed to ensure brand safety. The upshot is that the group believes ad-tech firms on the supply and demand side may take on significant costs retooling their systems to account for these changes while brands, agencies and publishers will contend with headaches on the operational, financial and legal ends.

The IAB Tech Lab’s analysis was drawn from consulting with 65 companies across a range of practices over six months and focused predominantly on the implications of the Protected Audience APIs while still touching on other subjects like the Topics API. This is the first report from the organization’s dedicated Privacy Sandbox Taskforce.

“Embracing Google’s Privacy Sandbox is a seismic shift in the advertising landscape, departing from the industry’s trajectory over the past 25 years,” said Anthony Katsur, CEO of IAB Tech Lab, in a statement attached to the report, which is open for public comment through March 22.

“Our findings highlight that the industry isn’t ready yet and identify multiple challenges to implementation due to limitations in accomplishing key advertising objectives,” continued Katsur. “Chrome is focused on providing discrete components that support aspects of use cases, but which ultimately cannot be assembled into a whole that provides a viable business foundation.”

The CMA, an antitrust regulator, similarly foresees Privacy Sandbox giving Google a possible leg up while creating obstacles for smaller digital advertising players. For instance, Google may be less reliant on the Topics API due to its access to troves of first-party data. The CMA also raised the issue of what entity would be in charge of the Topics API taxonomy, noting that “transitioning ownership to an external, industry-run group” may resolve the problem of Google stacking the deck in its own favor.

Google and the CMA are currently in a standstill period as they hash out the specifics of how to move forward with the Privacy Sandbox over the next few months. The CMA said it would publish its next report update on the matter in April.