Google's Privacy Flip-Flop

07/23/2024

Author: Matt Voda, CEO of OptiMine

 

Yesterday, Google changed course yet again with its Privacy Sandbox and their goal of killing off the 3rd party cookie.  This comes after several delays over the last few years in the project’s timeline as Google struggled with industry pushback and regulatory pressure. So, why did they make this decision and how will it impact the marketing and analytics space?

 

We can be reasonably confident that regulatory pushback was a primary factor in Google’s decision to not kill off the cookie. The company was under intense scrutiny by the UK’s Competition and Markets Authority which had rightly pointed to the fact that the Privacy Sandbox actually enhances and strengthens Google’s market dominance by making marketing ecosystem players even more dependent on Google. Google cited this regulatory oversight as the driver behind their most recent delay when they pushed back the full rollout of cookie deprecation to 2025. 

 

We can also be reasonably sure that industry pushback was not the main reason for this decision. We know this because many of the top players in the industry have already adopted the Privacy Sandbox APIs. We also know that Google, to its credit, has listened to industry input and has adjusted their approaches with the Privacy Sandbox over time based on this feedback, all while still maintaining their focus on building out the APIs. And in fact, they have committed to continuing that work even with this decision on 3rd party cookies. We also know that in-market testing has shown that about 80% of publisher revenues are re-captured when using the Privacy Sandbox – revenue that would otherwise been lost as a result of cookie targeting being turned off. 

 

So, while regulatory pressure forced Google’s hand on cookie deprecation, what happens to Google’s supposed belief in consumer privacy? Will they follow through on this declared love for privacy? Or will they give privacy lip service while preserving their life blood: advertising revenue? We don’t know for sure yet, because they haven’t provided details on their “elevated user choice” that will provide consumers the ability to stop tracking in Chrome. Ironically, Chrome users have this “choice” today, but it is buried so deep in settings that few people actually know about it or bother to change it. 

 

We’ll know that Google actually cares about privacy if they follow Apple’s lead by turning tracking off by default. Apple’s App Tracking Transparency sets tracking off and only turns it on when the consumer allows it. One clue that would suggest Google’s approach won’t be privacy-safe by default is their announcement that IP Protection will be added to Chrome but will only be turned on when a user is in incognito mode. In other words, IP Address-based fingerprinting will be the default for about 90%+ of user sessions. 

 

So, what does this change mean for marketers? Not much actually. Ad targeting, personalization and retargeting all will continue to use cookies- at least in Chrome. And much of the marketing measurement disruption has already occurred, to the point where last-click measurement has already become a dangerous proposition. A well-designed study from Northwestern University and Meta shows an astounding 167% error in last-click based measurement, and a shocking 300%+ error using last-click to measure low funnel channels. Yet many digital marketers and agencies still rely on last-click web analytics and platform reporting to make their decisions. While these error rates were set to get much worse with Google’s cookie deprecation, they will remain astoundingly bad regardless.  

 

What does this change mean for OptiMine and the brands we serve? Nothing. OptiMine’s fundamentally privacy-safe methodology never uses identity data, cookies or PII. So, the industry-leading agile marketing mix modeling we deliver every day will remain unchanged, and the brands that rely on our guidance- and avoid the disasters driven by last-click measurement- will continue to reap benefits from OptiMine.

 

We’ll continue to watch Google’s privacy moves unfold and will share our thoughts and interpretations with you. In the meantime, let us know how we can help your brand succeed with better decisioning.