Don’t be fooled by Google’s u-turn — cookies are still dead.

Google has axed plans to kill off third-party cookies in Chrome. Some in the ad-tech industry celebrated the news, but that could prove to be short-lived. With many users already not reachable through cookies, and that number set to increase, the future could look quite messy and diffuse. In a fragmented ad-tech landscape, businesses and advertisers will need to find new ways to reach consumers.

Google is not ending support for third-party cookies in Chrome after all. In a post on the 22nd of July, Google's VP of Privacy Sandbox Anthony Chavez announced a new approach that would elevate “user choice”. The move means that rather than third-party cookies being deprecated completely, users will be given the choice whether to accept them or not. 

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Third-party cookies are small bits of code that live in your browser, track your activity across the web, and send data to centralized aggregators to enable ad-tech platforms to serve you personalized ads. Google first began its efforts to build a privacy-preserving ad-tech stack five years ago. Rather than tracking individual users across sites with cookies, Google’s new “Privacy Sandbox” aimed to place them into groups based on their browser history and serve these “topics” to advertisers

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Since then, Google has struggled to balance the sometimes competing priorities of data privacy and competition regulators. Privacy regulators and campaigners were hoping that the deprecation of third-party cookies would reduce the ability of advertisers to track users across the web. Conversely, competition regulators such as the UK's Competition and Markets Authority warned that by placing Chrome at the center of data collection in the post-cookie ad landscape, the changes could put Google at an unfair advantage compared to other ad-tech providers. By giving users more choice over their privacy, while also leaving the door open to cookies, Google’s latest awkward compromise tries to find a balance between these concerns.

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Widespread adoption will be essential if the Privacy Sandbox is to be a success. As a result, Google has an incentive to nudge users towards opting out of third-party cookies. The precise UX design and choice of wording will have a significant impact here. An unskippable consent prompt would kill off far more cookies than a setting buried in the menus. For many in the ad industry, the first comparison that comes to mind is Apple. When it introduced App Tracking Transparency (ATT) in 2021, which explicitly asked iPhone users to opt in to cross-app tracking, only between 12% and 40% of users consented. This made the Apple Advertising Identifier almost useless for audience targeting and reportedly resulted in a reduction in Facebook Audience Network revenues of $10 billion.

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If we see a similar percentage of users reject cookies after Google's latest move, advertisers will be faced with a highly fragmented landscape. Most ad-tech platforms have made significant investments to prepare for Privacy Sandbox and don’t want to abandon it. But they may also feel the need to retain support for third-party cookies, even though the number of users addressable through them is set to shrink further. Firefox, Safari, and Brave all block third-party cookies by default and more will now opt-out in Chrome when given the choice. 

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Thus, despite Google's latest backtrack, third-party cookies will nevertheless be relegated to a far more minor role in future. This will make first-party data and contextual signals all the more important. Advertisers will need to understand more about the websites on which ads are being placed and AI and large language models will play a central role here in categorizing content themes.

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Zooming out, cookies are increasingly looking like a technology of the past. Indeed, some in the industry are questioning whether they are really that effective anyway. A recent study showed that cookie-based targeting tends to be ROI negative. Another paper targeted decision makers in the technology industry using a commonly used, off-the-shelf target group and found that it was not significantly more accurate than random prospecting. Marketing strategist Reid Thomas put it succinctly when he said that the industry needs to accept that “there is no new cookie”, and that advertisers need to rethink how to reach audiences rather than imagining that the “good old days” are ever coming back.

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As cookie-based ads become less viable, businesses will need to focus more resources on building direct, meaningful relationships with consumers. This involves creating authentic content and communities that resonate with individuals on a personal level, rather than relying solely on metrics and performance marketing tweaks. A people-first approach to branding prioritizes harnessing the social power and reach of the individuals who make up your team to foster brand identification and loyalty.

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To read my more detailed explanation of Google Privacy Sandbox, click here.

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