Cookie or not, nothing has changed. Don’t leave your destiny in the hands of Google
Publishers may well get caught in the crossfire as the consumer is empowered and perhaps encouraged to ditch the third-party cookie, as Permutive’s Joe Root explains.
Google’s announcement that it’s no longer getting rid of third-party cookies risks creating a false sense of security for publishers and advertisers alike, but let’s be clear: Nothing has changed.
Cookies no longer exist for 70% of the internet; Google is simply handing the timelines for the remaining 30% over to consumers, and when given a choice, consumers overwhelmingly opt-out.
70% of consumers no longer have a cookie, and within Chrome, 40% of consumers have manually disabled cookies themselves
The debate is simple: With this new choice, do we go from 30% of consumers with a cookie to 15%, 10%, or 5%?
None of these options work.
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The most similar parallel is Apple’s ATT framework in the app ecosystem. Today, opt-in rates through ATT are ~25%. If similar numbers play out with Google’s framework, this would imply that we’ll be moving to a world where ~12.5% of consumers have a cookie and 87.5% don’t.
This update from Google means that rather than owning the schedule for cookie deprecation, Google is putting cookie deprecation in the hands of consumers. According to Google, consumers are now being given “a new experience that lets users make an informed choice.” It’s another way for consumers to exercise their choice to opt out of sharing their data with third parties.
The exact reason for Google’s change of heart remains unclear, but its schedule has left it with conflicting feedback from the Competitive Markets Authority, which cares about market manipulation, and the Information Commissioner’s Office, which cares about privacy. This decision is a smart way for Google to satisfy both – by doing this, Google can tell the CMA that consumers chose the timeline and reassure the ICO that users have control over their privacy settings.
Fundamentally, though, nothing changes. We’ve always believed consumer choice is reshaping the ecosystem, and only adtech that is built from the ground up to adapt to each consumer’s choices around privacy will survive.
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The current situation is untenable for publishers and advertisers, and leaving it unresolved poses a major risk to the viability of the open internet. The demand-side platforms that make purchasing decisions don’t work without cookies. For publishers, 70% of their inventory is under-monetised because cookies don’t exist. Advertisers can only bid on 30% of consumers, meaning reach has collapsed, and CPMs have increased.
Publisher first-party signals solve this problem – they enable an advertiser to reach 100% of consumers, and downstream of that, sales double and CPAs halve, making the open internet performant.
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It’s on publishers to not let this false sense of security seep in. Publishers must guard the value and importance of their first-party signals, both with advertisers and adtech. This value isn’t theory or at the test stage. When we make publisher first-party signals available, derived from our 150+ premium publishers, advertisers see dramatic improvements in return on ad spend.
Publishers drive over $1bn in spend through first-party signals in Permutive alone and, when applied to direct and premium programmatic channels, are driving a 50% uplift in yield. For buyers, these signals drive huge performance uplifts over third-party signals – advertisers who work with our publishers have seen a doubling of sales and a halving of CPAs. Crucially, this benefit extends across every single impression, not just the 30% of them where third-party signals still exist.
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For publishers and advertisers, this announcement should act as a reason not to leave your destiny to Google. Dig into the reach loss due to existing cookie loss and the potential growth from using publisher first-party signals. The ultimate move is not to get distracted or complacent; cookies are still going away.