What Google’s shift on cookies means for advertisers

Last week, Google announced plans to eliminate third party cookies from its Chrome browser by 2022. The decision effectively signals the end of third-party cookies and has huge ramifications for online advertising.

What are third party cookies?

Since the introduction of GDPR, visiting websites is usually accompanied by bossy pop-ups asking you to accept cookies – the small text files that websites you visit place on your browser. If the cookie comes from a domain other than the one you’re visiting, it’s a third-party cookie. Advertisers use these to serve you targeted ads based on your interests and location.

Why is this a big deal?

Because Google is Google. According to Statista, Chrome has a 70% market share on desktop and a 41% share on mobile. However, the move wasn’t entirely unforeseen – Google is following in the footsteps of Firefox and Safari, who have already banned third party cookies. And last August, Google said it was building a new “privacy sandbox” to give users more control over how their personal information is used for ad-targeting purposes.

Who benefits from this?

On the face of it, consumers benefit – since the desire for user privacy is widespread and no-one actively enjoys the slightly creepy feeling of being chased all over the internet by the same set of ads based on your search history.

As it happens, Google benefits too – mainly because, unlike many digital advertisers, it doesn’t rely on third-party cookies to power its massive ad business. Google has the advantage of being able to rely heavily on first-party data collected by people signing into Google through Gmail, YouTube, Drive, Photos, Android, Chrome and so on. The same is true also of Facebook – it has enough first-party data of its own to be unaffected.

So, who loses?

A key issue is the lack of alternatives that advertisers can fall back on in the absence of third-party cookies – which could leave smaller companies and start-ups potentially floundering. Eliminating third-party trackers maintains Facebook’s and Google’s ability to track consumers and gather enormous amounts of data about users while preventing many of their advertiser competitors from doing the same.

The industry needs to adapt

Balancing ad personalisation with user privacy isn’t a simple or straightforward thing. Neither is cross-device attribution, the task of which becomes harder without third-party cookies. Google’s announcement seems likely to cause significant disruption to an internet eco-system which many advertisers and their partners have relied upon for years. The lack of alternatives that advertisers can fall back on in the absence of cookies will require significant imagination by the industry to overcome. However, Google has given us until 2022 to figure it – but meanwhile appears to benefit the most from its decision. 

Az Ahmed | Marketing Manager

Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes.