September 19, 2022
In late July we all heard the news we were probably a little expecting as well: Google is postponing again the deprecation of 3rd party cookies to the end of 2024. A long-due decision in which the Mountain View based firm appears to be dragging their feet.
In the past few weeks many voices from the industry have been blaming Google for imposing its timeline and conditions to the market. As the move to a post-cookie era is a major shift for the advertising industry, it’s worth taking a more balanced view.
From a technical perspective, Google could have easily switched-off 3rd party cookies from one day to the next. They could have gone fast alone but have chosen to try to deploy a market-wide approach to bring wide market adoption through the W3C and industry bodies. Without new standards — so this is a good thing.
Financially, Google is a major market participant in advertising but it may be easy to forget that the revenues depending on 3rd party cookies only represent around 16% of their top-line revenue – so this segment is not critical. They could easily survive and still deliver a juicy profitability to shareholders. However, this is not the case for a major share of the internet services that are financed by advertising, in particular the media industry and journalism.
Many media companies risk losing competitiveness if 3rd party cookies would disappear from one day to the other. Remember when Facebook announced a 10 billion loss in revenue when Apple released their in-app privacy changes? Imagine what a quick deprecation would do to publishers when we know that environments not supporting 3rd party cookies generate around 3x less revenue than Google Chrome today. Without taking into account market dynamics which are uncertain, and given Chrome’s market share, we are talking about a potential risk of a 55% drop in digital advertising revenues for publishers. The more programmatic dependent a publisher is, the higher the risk.
Looking from this perspective, I believe publishers and advertisers can thank Google for this delayed release as this reduces risks of disruption until the market has scaled functioning alternatives and gathered valuable know-how.
But it’s not all positive of course. The losers of Google’s decision are Internet users – all of us essentially – who keep being tracked across browsers by hundreds of technologies they have never heard of and having their privacy potentially invaded by dubious practices. Knowing how valuable users are for publishers and that they are the only reason advertisers invest, at C Wire we are passionate about user privacy.
We at C Wire are fully committed to our mission of better digital advertising that’s fair for everyone involved. We’ve been working on our cookieless contextual platform for 3 years now, and from the outstanding campaign performance we deliver for our clients we know it works. Yet we don’t follow users, period. 3rd party cookies are not required for stellar campaign results.
But we’re not a solve-it-all solution. As the digital advertising industry, let’s all get together and work on the alternatives to give advertisers and publishers solid solutions. The faster we build them, the faster Google can deprecate 3rd party cookies.
– Rui de Freitas, COO and Co-Founder