Ad tech bosses balance frustration and focus after Google’s latest shift on third-party cookies

The details — what little there are — can be read here, but the crux of it is this: after four years of promising the ad industry it would eventually rid its browser of third-party cookies, Google has now said it’s going to let users decide whether they will be tracked by cookies.

This likely means third-party cookies will still disappear — at least most of them — in Chrome. History backs this up. Just look at what happened when Apple did something similar three years ago. Most users opted out of tracking, causing a significant drop in third-party addressability and the advertising that depends on it.

If the same thing happens in Chrome, there will still be a need for the alternatives that ad tech bosses have already poured so much investment into. That’s why many ad tech CEOs are frustrated but not overly worried about Google’s pivot. Instead, they’re in wait-and-see mode, eager for details on the timeline and looking for some regulatory thumbs-up.

Andrew Casale is one of those execs.

As the CEO of ad tech vendor Index Exchange, he’s playing it cool. No frantic changes to development plans, no sudden shifts in timelines, and certainly no wild predictions about what’s next. He’s holding off on any drastic moves until there’s more clarity — whenever that is. 

“In terms of Index Exchange, this [Google’s pivot] doesn’t change anything,” said Casale. 

He and his team will keep testing the APIs in the Sandbox and continue supporting the spread of alternatives beyond it too. Or as Casale put it: “We still have a roadmap for improvements to our tech for the sandbox that we intend to finish, and we’re going to do everything we can to make sure that alternative identifiers continue to flow into the market.”

Drew Stein, CEO of Audigent, is on the same page.

“As far as we’re concerned, the investments that we’ve made over the last five years still have tremendous advocacy,” said Stein. 

All those bets hinge on one big idea: the future of tracking people in a privacy-respecting way will require a mix of solutions, not just a single one like third-party cookies. This mix will include the Sandbox, authenticated IDs, probabilistic IDs, contextual data, and first-party IDs. How they all come together will depend on what an advertiser is trying to achieve, based on data inputs, processing requirements, and desired outcomes. It won’t be a one-size-fits-all approach.

“We don’t feel like we’ve lost anything with this announcement,” said Stein. “It’s business as usual for us in terms of focusing on the Sandbox and the alternatives outside of it.”

Of course, his view could all change in a heartbeat. If the last four years have taught these execs anything, it’s to never assume something will happen until it actually does. But until then, they’ll keep reading between the lines, holding strong opinions lightly.

Paul Bannister, chief strategy officer at Raptive, an executive with intimate knowledge of the Privacy Sandbox proposals and a regular participant at such meetings, said the mood among his peer set was “business as usual.”

Speaking with Digiday in the hours after the July 22 announcement, he said, “In some ways, from a day-to-day perspective, it’s like ’Let’s just keep doing the things that we’re doing, like, building Protected Audiences… let’s keep assuming that whatever choice is given to consumers that some third-party cookies will go away.’ It’s better to have some replacements than not. But timing-wise, I have no idea [in terms of Google’s rollout].”

Part of the reason these CEOs are so philosophical is because they saw a twist coming. They knew the road to a third-party cookie-less Chrome would have some surprises; they just didn’t know what. Some thought Google might pull an Apple and block third-party cookies without asking, while others expected the deadline to be pushed back indefinitely. 

Either way, they knew alternatives would still be needed, so they kept investing in them. Turns out, that was the right call — at least for now. 

That persistent uncertainty lingers because, while execs like Casale are fairly certain Google will axe cookies with consent, they’re not ready to bet the farm on what’s next, particularly regarding the Sandbox. Major questions remain: How will Google ask Chrome users about third-party cookie tracking? Will most users say no? And if they do, what will that mean for measurement?

Until these questions get answered, some ad tech bosses can’t justify throwing more money into the Sandbox. Unlike their larger counterparts, the costs are too steep for these smaller players, and the rewards are too low. So, they’re hitting pause, catching their breath, and weighing their options.

“The real casualty here is the industry’s efforts and opinions on the Sandbox. It certainly looks like Google’s confidence in those solutions are suspect,” said one ad tech executive who exchanged anonymity for candor. “We, and I’d imagine many others, are again kicking those implementations down the road in favor of more agnostic non-addressable solutions like contextual and alternative IDs.”

Sure, there’s some grumbling, but these moves are sensible. However, how Google allows Chrome users to choose whether to be tracked by cookies will demand extra investment — money these CEOs hadn’t budgeted for. Suddenly, their tech needs to adapt from operating without any third-party cookies to potentially handling some. Not every company has the financial cushion to easily absorb these changes.

Add it all up, and it’s the same old story since Google’s announcement. Third-party cookies are still on their way out, the Sandbox is still a mystery, and the ad industry is still stuck feeling like a spectator in its own game.