The winners and losers of Google’s third-party cookie reversal

Winners

Google’s cookie re-coupling

How much of “winner” Google really is depends on your threshold for cynicism. On paper sure, the tech giant has bought itself some breathing room, sidestepped another privacy firestorm and kept Chrome from becoming Safari’s cookieless cousin.

But let’s not pop the champagne just yet.

This is less a triumphant victory and more a muttered “fine, whatever.” After years of parading the Privacy Sandbox around like it was the future of advertising sans third-party cookies, those same cookies are back on the media, indefinitely.

Why? Because many advertisers ghosted the sandbox while others had already moved on from third-party cookies. And with regulators breathing down its neck over antitrust concerns, Google may have realized that pushing its own alternative too hard would only invite more heat. So yes, Google walks away from this round looking intact. Just don’t mistake strategic retreat for a show of strength.

Demand-side platforms breathe easier, thanks to Google’s U-turn

Demand-side platforms were among the first wave of programmatic trading technologies to wet the appetite of both investors and marketers in the early 2010s.

At the core of their value proposition was using third-party cookies to append audience data for targeting, practice frequency-capping, etc., to improve reach.

However, as privacy concerns bubbled to the surface in the latter part of the decade, the entire reason for web browsers limiting third-party tracking technologies, their pitch needed to change. After Google announced its intention to deprecate third-party cookies in Chrome, privacy-conscious performance, with buzz phrases such as “consent-based data,” “clean rooms,” and “identity frameworks,” became the order of the day.   

Now that Google Chrome has confirmed its third-party cookie U-turn, what’s old is new again for such players, and many in the sector will sigh with relief. 

Google’s DSP, DV 360, will be the foremost beneficiary of the “business as usual” message many will take from the development. Independents such as Adform, MediaMath, Nexxen, The Trade Desk, and Yahoo — more on those with alternative IDs below — will also benefit.

— Ronan Shields 

Procrastinating marketers

Finally, vindication for the late leavers, the last-minute gift buyers, the final day tax return filers. And for the advertisers that had dragged their feet, for reasons of either cost or inertia, on transitioning away from the third-party cookie.

Those early birds busying themselves with alternative ID tests and experimental geo-targeting methods? Worrywarts, every one. The advertisers that took a hakuna matata approach to their use of the third party cookie for targeting audiences in Chrome? They’re sitting pretty.

Sure, the utility of cookieless approaches are fundamentally intact, and media buyers aren’t recommending that marketers’ slow down their own deprecation of the third-party cookie. But brands, including those bringing up the rear, have clearly gained some “breathing room,” as Mediaplus’ Matt Wilke put it.

— Sam Bradley 

Publishers get the best of both worlds (for now)

Despite the sense of collective whiplash over Google’s reversal on third-party cookie deprecation, many publishers stand to benefit in the near term. After years of preparing for a cookieless future — by investing in first-party data strategies, building out identity solutions, testing contextual targeting, and partnering with data clean rooms — publishers are now in a stronger position to monetize audiences both with and without cookies. Now that cookies are sticking around for longer, they gain extra runway to recoup some of the ad revenue that might otherwise have vanished in the short term.

Many have also admitted that the U-turn has given them vital breathing space: they now have time to refine and scale alternative targeting solutions. In effect, publishers have hedged their bets: they’ve done the hard work to future-proof their businesses, but now they also get to take advantage of the existing infrastructure — and ad budgets — that are still heavily reliant on third-party cookies.

And ironically, even those publishers who haven’t been particularly innovative, A.K.A have done very little to prepare for a cookieless future, will now benefit. 

— Jess Davies

Winners by way of the exit door

Those who exited (and the investors that backed them) before fluctuations in the privacy landscape began to impact the advertising sector. An exhaustive list of such names would be a case of TL:DR, so a focus on more recent history may give us an idea of who the lucky few actually are.

For example, let’s examine the reasons cited for Publicis Groupe’s purchase of Lotame, which involved significantly enhancing its global identity and data capabilities.

Per its original investment thesis, integrating Lotame’s 1.6 billion unique IDs with its existing data assets, Publicis aims to reach approximately 4 billion unique consumer profiles, covering 91% of adult internet users worldwide.

However, that’s less of an urgent need given the U-turn from Chrome, the web browser with more than 60% market share. Was this a case of canny timing from Lotame — a scale-up that’s been on the scene since the mid-2000s?

— Ronan Shields

Losers 

Google: from privacy pioneer to punchline

After years of posturing about killing third-party cookies for good, Google is now stuck holding the bag — one that’s full of bad PR, legal headaches and half-baked tech no one wants. Privacy sandbox? Basically a group project where Google did all the work and no one else showed up. Worse, it spent five years lighting the industry’s hair on fire, only to quietly walk it all back. The result: wasted budgets, stalled startups and an ad tech ecosystem that now trusts Google even less than before (which is saying something). Add to that the real possibility that Google won’t even own Chrome much longer and you’ve got a company that just spent half a decade playing 4D chess with itself. If this was a power move, it backfired hard.

— Seb Joseph

Publishers prepped for change, got another curveball

Over the last five years, publishers have poured investment into building first-party data strategies, testing new identity solutions, developing contextual targeting tools — all in anticipation of a cookieless world. While many of them maintain that this has now put them in a strong position to use both ID solutions and cookies, there is a risk that, now third-party cookies are sticking around, advertisers may shift focus — and budgets — back to old habits, sidelining the innovations publishers worked hard to bring to market. 

This could undercut momentum toward privacy-centric advertising and widen the gap between large platforms and smaller publishers, who can’t afford another cycle of strategic whiplash. Worse, it reinforces the sense that Google, not the open web, controls the rules of engagement — and that publishers, once again, are playing catch-up on shifting ground.

— Jess Davies

Alternative IDs were the answer (well, part of it), until Google changed the question

Regardless of whether they adopt a deterministic or probabilistic approach to targeting — will undoubtedly have had the wind taken from their sails by Google’s U-turn. As one anonymous source, who participated in Privacy Sandbox experiments, reacted to the U-turn, “F*ck Google.”

However, for investors who signed checks to accelerate alternative ID providers, such as ID5, InfoSum (with its “federated ID” approach), or Novacliq, in recent years, may have asked, “WTAF?!” this week.  

Additionally, there’s the series of agency-specific ID efforts developed by the likes of Epsilon (Publicis Groupe), Omni ID (OMG), Choreograph ID (WPP), Acxiom’s Real ID (IPG), etc. And then, of course, there’s the DSP-specific IDs, as personified by The Trade Desk’s UID 2.

All of these bubbled up over the past five to six years, but Google’s U-turn doesn’t mean the requirement for privacy has gone away — even if the urgency has now been significantly diminished. 

Google Chrome’s U-turn is a stay of execution for the third-party cookie as a matching mechanism, which is fine, but longer term, the media industry will need to heed the value proposition of such players.

— Ronan Shields

Retail media just lost its favorite talking point

The success of retail media networks like Walmart and Albertson’s in recent years has rested, in part, on a pitch that presented their data offering as an answer to questions posed by cookie deprecation.

That selling point has been less certain since Google put off the deprecation decision last summer, and will likely lose more steam now Damocles’ sword is gone for good.

RMNs still offer brand-safe environments and ad inventory close to the point of sale, and few brands would turn their nose up at quality first-party data. Meanwhile, retail media providers have been working to provide greater flexibility to marketers concerned about the impact of tariffs on their budgets. “What they’re offering is still unique,” noted Rory Latham, Rory Latham, senior director of global investment and programmatic at GroupM.

But there’s one less string on their bow at a crucial moment. The sector’s largest players have been pushing advertisers to double down on their investments, just as grumbles from marketers over transparency and terms have begun to gain volume.

— Sam Bradley 

Google gives up the fight and privacy pays the price

Google’s decision five years ago to follow Apple’s lead and sunset the third party cookie was taken as a net win for industry advocates concerned about advertisers encroaching upon the privacy of web users. 

Though the giant is hardly an altruistic actor in this matter, it’s likely that efforts to more privacy-forward targeting methods wouldn’t have moved as fast without its deprecation process, noted John Thankamony, managing director, addressable media  and total commerce at Dentsu U.K. “This was the impetus that was required to actually make people think about their strategy,” he said.

Advertising experts say that progress has been meaningful. But the company no longer plans to proactively prompt users over whether they’d like to opt out of the third party cookie (though users will be able to choose the level of tracking they’re comfortable with), meaning the work will probably remain unfinished. Google is “leaving billions of Chrome users vulnerable to online surveillance,” according to digital rights group the Electronic Frontier Foundation.

For observers concerned with advertising overreach, that grants advertisers too much breathing room for comfort.

— Sam Bradley