Cookies Can Stay - But Does it Matter?

Yesterday, Google announced its decision to maintain third-party cookies across its properties. Given the recent departure of key innovation and privacy leaders, along with mounting criticism of Google’s Privacy Sandbox in both the US and Europe, this news comes as little surprise.

Google plans to introduce a new solution: a one-time prompt allowing users to set their preferences, which will apply across all Google browsing experiences. This aims to balance user privacy, giving users more control while ensuring advertisers can still effectively reach their audiences. This approach is reminiscent of Apple's 2021 introduction of App Tracking Transparency (ATT).

When Apple announced the Identifier for Advertisers (IDFA) to give users greater control over their data, the impact on advertising was initially unclear. A year later, over 60% of iPhone users had opted out of data sharing, leading to billions of dollars in lost ad revenue.

The pressing question now is: Does it really matter if cookies remain?

If cookies don’t deprecate and Google adopts an Apple-like approach to tracking, similar losses in addressability are likely. When GDPR was enacted in Europe, some markets saw addressability drop to 30-40%.

Even with cookies remaining, the damage may already be done. Google’s new privacy solution and alternative identifiers will struggle to match the effectiveness of cookies. If trends follow Apple's example, a significant portion of consumers will become unaddressable. Estimates suggest that alternative IDs might capture at best 50% of the effectiveness previously achieved with cookies.

As a result, personal data is poised to become the new currency in our digital world, necessitating a more transparent and value-driven exchange between consumers and digital platforms. Users might trade their data for access, such as 10 free articles in exchange for an email address, or cookies that expire within a week. Some mainstream publications, like the Washington Post, have already adopted similar practices. This transactional approach to data collection will require advertisers and publishers to be more transparent about their data usage policies.

As identifiability becomes more challenging for the ad industry, an ID-agnostic, blended approach is necessary to ensure the greatest accuracy in reaching customers.