Olga Zharuk
TeqBlaze / Chief Product Officer
We continue our series of blog posts reviewing a complex approach to alternatives to third-party cookie targeting. Initially, Privacy Sandbox intended to enhance privacy protection for Chrome users by deprecating third-party cookies. At the same time, user privacy in the digital advertising landscape is tricky to define, as hundreds of ad tech companies collect user data across billions of websites worldwide without their knowledge or consent. Still, the idea was to provide greater levels of consumer privacy and transparency.
On July 22, Google updated its intent:
“Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators, and will engage with the industry as we roll this out” — Anthony Chavez, Vice President of Product Management at Google, Privacy Sandbox.
The company underlined that it will continue investing in Privacy Sandbox development and making it available with advanced privacy and utility features. A privacy-enhancing initiative, IP Protection for Chrome’s Incognito mode, has also been announced. Google expects that the industry will grow in adopting Privacy Sandbox APIs, thus improving its performance over time — this is the main conclusion that we draw from our reading.
TeqBlaze suggests adopting the Privacy Sandbox platform within your programmatic ecosystem, combining it with the approaches described in the previous articles:
Following the proposed order, you will successfully build an infrastructure to obtain synergies from multiple alternative applications. The most efficient cookieless architecture is the one built without redundant steps.
Google Privacy Sandbox APIs
- The Topics API attaches topics describing interests to anonymized user-profiles and makes them available for each caller in a three-week history window.
- The Protected Audience API holds secured auctions based on interest group information obtained from the user browser with restrictions to access for advertisers, publishers, and all third parties.
- The Attribution Reporting API measures when an ad click or view leads to a conversion on an advertiser site, such as a sale or a sign-up, with event-level and aggregate reports.
A significant drawback of the Privacy Sandbox APIs is their reliance on coarse-grained taxonomies. Initially, 350 interest groups were available, and then the number was extended to 629, which is still insufficient compared to the IAB Audience Taxonomy, which has more than 1,670 lines for defining users within the Seller Defined Audiences (SDA) specification (mentioned in the first article).
The enhanced privacy results lead to low targeting and retargeting capabilities, with the threat of signals being misconstrued:
“If my wife came into the room and used my browser, then I came back and used it after her, I’m going to start getting a lot of ads for Sephora. That’s a wasted impression” — Tara DeZao, Chief Marketing Director, Pega.
Many companies spent time, money, and other resources contributing to the Privacy Sandbox. In most cases, the results were poor and sometimes fragmented, leading to industry concerns. Raptive has been testing the Privacy Sandbox APIs, along with Criteo, and both of their results show that the Privacy Sandbox is not yet a viable alternative to cookies. Participants were unanimous in their conclusion that a complete deprecation of cookies on Chrome would have a significant impact on how targeted ads are displayed on the web:
“If third-party cookies were deprecated today with the current Privacy Sandbox, our testing demonstrates publishers will lose an average of 60% of their revenue from Chrome” — Todd Parsons, Chief Product Officer, Criteo.
Overall challenge
Fortunately, key people at Google heard the industry’s voice and changed their plans accordingly. Now, every player who wants to preserve advertising earnings has an even more complicated roadmap than before. Here are our recommendations:
- Ensure your cookie-based targeting capabilities are cutting-edge and used to the fullest extent possible.
- Deploy cookieless solutions described in the first two articles in this series to deepen contextual capabilities enriched with protected and anonymized user profiles obtained by using multiple identity solutions.
- After all, integrate Privacy Sandbox as a new alternative platform for fully secure and anonymized advertising that exists in parallel with cookie-involved targeting creating a specific, highly secured environment for privacy-positive and ethically responsible trading.
In testing Privacy Sandbox technologies, consider participants: the bigger ones raised funding from Google as NextRoll, AppsFlyer and Unity Ads, and the smaller ones were volunteer-based. For most companies, investing hundreds of hours in testing Sandbox’s APIs is an article of luxury until the official final approval from the CMA is achieved and the technology is confirmed as stable for a global launch. These varying levels of investment influence the scope and speed of adoption, with larger companies more readily able to allocate resources for extensive scaling with Sandbox APIs.
Acknowledging the shift toward privacy-focused trading models, Google confirms its disability in rejecting third-party cookies so fast. The industry has started rebuilding its internal logic to reduce or eliminate dependency on cookies. Google’s attempt to boost industry shift has become an excellent demonstration. We may conclude:
- Your programmatic strategy might be improved with a flexible approach to technology fusion
- It is essential to grow internal research and development investments, preparing for the coming updates to the digital landscape
With the advertising industry’s growing complexity, we advise simplifying your experience. To increase yields over the long term, it would help to diversify your technology portfolio by balancing cookie-based approaches with cookieless ones. The sooner this process is stable, the better.
The programmatic requires precise yet frugal strikes in order to prepare for the future.
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