Google’s Privacy Sandbox updates are met with both skepticism and a little more optimism

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After a stuttering start, Google’s finally bringing more clarity with a new timeline for its twice-delayed Privacy Sandbox. However, concerns linger about what the massive change might mean for the companies and users that participate in the ad-tech kingdom.

Google yesterday said it will deprecate third-party cookies for 1% of Chrome users globally in the first quarter of 2024. It also plans to plant a few more flags even before then, with the sandbox taking shape even more as early as this summer. In July, new APIs for all users globally will be included in the latest version of Chrome. Later this year, Google expects to enable an opt-in testing mode starting in the fourth quarter with an ultimate goal of getting rid of third-party cookies by the end of 2024.

In an interview about the timeline, Google senior director of project management Victor Wong said there are two significant challenges happening at the same time: Introducing a new infrastructure while also gutting old tech at the same time.

“There’s no understating [that] this is one of the biggest changes you could ever introduce to the web,” Wong said. “It’s like one of the big plumbings of the internet. I’m not sure if there are too many comparables. But in general, Chrome is always trying to take a deliberate approach to anything that affects the underpinnings of web.”

Since its inception, Sandbox has been met with a mix of apprehension, confusion and skepticism. That’s only been exacerbated by multiple delays that have left some wondering how to plan ahead for such a major change. Some say Google still hasn’t proven Sandbox will improve either user privacy or business results for advertisers. Others think it could just end up giving Google more power inside the Sandbox while raising the heights of its walled garden.

“Google is effectively operating a supermarket and they have the desserts aisle and the home baking aisle,” said James Rosewell, founder of the Movement for an Open Web (MOW) — a coalition of anonymous businesses and industry players. “What they’re saying is if you want the cherry pies, you come to the dessert aisle and you take our cherry pie. Then what they’re going to do in July is close the home baking aisle. You’re not going to be able to buy flour and eggs and cherry anymore.”

Some marketers say the latest updates are helpful since the uncertainty has been harmful on its own. However, it’s still unclear how Google’s efforts might impact other companies in the ad-tech ecosystem. In its quarterly financial report just last week, AppLovin pointed out that Privacy Sandbox might “materially and adversely affect our business, financial condition and results of operations.”

“To date, these data privacy changes have had some impact on the discoverability of apps across these platforms, though they have had a relatively muted aggregate impact on our overall results of operations,” AppLovin wrote.

Some observers say it’s still difficult to rely on Google’s own tests — either because parts of the ecosystem will use Google’s new APIs in different ways and because some early tests didn’t totally remove third-party cookies yet. Other marketers see the latest clarity as a reason to be more optimistic, especially if they’re able to simulate what cookie deprecation will look like before everything goes fully into effect.

The 1% of users having third-party cookies deprecated will be key to evaluating the plumbing, according to Loch Rose, chief analytics officer at Epsilon. He said it’s good that the new APIs will be expanded to all users without deprecating third-party cookies, but so far the lack of scale has been a major barrier to properly testing things. To him, the impact of the deprecation of third-party identifiers is greater on the measurement side than on the targeting side.

“That’s because only a minority of those that are exposed to a campaign convert, and that’s a relatively small signal,” Rose said. “It’s not that you need to know who converted from the standpoint of tracking, but I need to know what percentage converted.”

Once the ad-tech world was built, it’s been hard to unbuild and rebuild, said Cobun Zweifel-Keegan, managing director of IAPP in Washington, D.C. Ongoing regulatory uncertainty at the state, national and international level add even more legal grey area around how Google and other companies think about building new tech and complying with new or future laws.

He also noted it’s only been a few months since regulators in California gave new clarity around parts of the state’s new law. Google is also facing other major legal battles including its ongoing antitrust case with the U.S. Dept. of Justice.

“We’re in a moment right now where the advertising industry is reinventing itself, which is a slow and painful process and we don’t know what it’ll look like on the other side of this,” Zweifel-Keegan said.

The long goodbye

The decline of the third-party cookie, the bedrock of online advertising, was first flagged in 2017 when Apple began rolling back its efficacy for targeting and tracking purposes in its Safari web browser, a policy it has unilaterally implemented.

However, as the dominant force in online advertising (and one that is under fire from regulators actively lobbying for a break up of the company) Google has had to be more collegiate in its approach after confirming that Chrome would emulate Safari in January 2020.

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At that time Google formally unveiled Privacy Sandbox, then a collection of aviary-themed acronyms that few understood, but as early testing kicked off, dissent spread among third-party participants.

Complaints included disputes over the efficacy of the proposed targeting standards with concerns that Google was using Privacy Sandbox as a Trojan Horse to further its dominance of the online advertising industry widespread.

Arguably, it is within committee meetings hosted by W3C where Privacy Sandbox proposals have come in for their harshest criticisms with the web standards body rejecting its Topics API earlier this year, and earlier characterizing them as “harmful.” In fact, concerns built up so much that U.K. regulatory authorities have asked for oversight of Privacy Sandbox’s developments.

Such disputes have contributed to Google twice postponing the rollback of third-party cookies in its Chrome web browser, extending the timeline for the full implementation of the project from 2022 to its current schedule of 2024. This process has led to much anguish in the industry.

As one source, speaking with Digiday on the condition of anonymity given client sensitivities put it, “The indecision makes it difficult for a lot of major companies to make important decisions, this is one of the most important sea-changes in the industry.”

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