Google has again disrupted the plans of advertisers and ad-tech providers looking to target and track consumers, saying that it will not build or use alternative user-level identifiers once third-party cookies are phased out.
"People shouldn't have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don't need to track individual consumers across the web to get the performance benefits of digital advertising," David Temkin, Google's director of product management, ads privacy and trust, wrote in a blog post this week.
Google in early 2020 announced it would phase out third-party cookies within two years, sending the industry scrambling for alternatives before 2022. This week, the search giant said replacement solutions relying on personally identifiable information (PII) like email addresses don't meet consumer expectations for privacy. Eighty-one percent of consumers say the risks they face because of data collection outweigh the benefits, per a Pew Research Center study cited in the blog post. Google said these replacement solutions won't stand up to "rapidly evolving regulatory restrictions" that include CCPA, California's Prop 24 and a just-passed Consumer Data Protection Act in Virginia.
In calling out such solutions, some have suggested that Google could upend the work done by ad-tech providers looking to build a way forward on a post-cookie landscape. Among those solutions is Lotame's Panorama ID, which relies on web, mobile, CTV and customer data, some of which Google is moving away from.
"Google uses privacy as a shield to weaponize its 'moat.' The Moat is YouTube and their Search business. Almost everything else is a rounding error."
Google is stressing the need for greater privacy than would come from moving from third-party cookies to other PII-based solutions. It notes that it is still working with the industry on its Privacy Sandbox innovations, like the Federated Learning of Cohorts (FLoC) technology it says is at least 95% as effective as cookie-based advertising. But like its claims about FLoC, the latest move by the ad behemoth is being viewed with skepticism by other ad industry players.
"Google uses privacy as a shield to weaponize its 'moat.' The Moat is YouTube and their Search business. Almost everything else is a rounding error," Andy Monfried, CEO of data management platform Lotame, said via emailed comments. "Make no mistake, Google is now going to brand themselves as a 'Privacy Concerned' company for consumers. Don't fall for it."
Welcome news to some
However, the announcement isn't expected to affect the development of every solution. This includes Unified ID 2.0, an email-based identity solution that seems to be gaining traction as a leading option. Created by The Trade Desk and recently handed off to nonprofit Prebid to operate, Unified ID has been endorsed by the likes of Nielsen, PubMatic and LiveRamp, and just this week was integrated by Xandr.
To the developers of Unified ID 2.0, the announcement is actually a welcome development after a period of radio silence from the Google ad team. LiveRamp is also in support of Google's plans, per a blog post by Travis Clinger, the company's senior vice president of addressability and ecosystem.
"A lot of folks are taking Google's internal statement about what they will or will not do with log-ins, and they're extending that to things like LiveRamp and Unified ID 2.0, and there's kind of a false equivalency," said Tom Kershaw, chairman of Prebid and CTO of Magnite. "The fact that they've said that Google is not going to use its huge log-in advantage to further entrench its position — that's all positive news to me."
The focus on email logins has been misguided, according to Kershaw, who said even a 20% adoption rate for user logins was a high estimate. With that in mind, the developers of Unified ID 2.0 have focused on publishers' first-party data and moving segment creation and audience management to publishers. Google's pledge to support solutions based on first-party relationships between consumers and the brands and publishers they engage with aligns with those developments.
"First party data will increase in value with the demise of the cookie. Marketers can strengthen and grow their first party data assets by building trust with their customers and being transparent with them," Nancy Smith, CEO, founder and president of Analytic Partners, said in emailed comments.
That push for first-party data was already a priority for marketers this year, and can be used — alongside zero-party data that is shared by consumers with a company and second-party data, which is shared by partner companies, alliances and consortiums — to establish cohorts or persona-based audiences that can be used for targeting, Smith explained. Some in the industry stress the need to collect this other data as soon as possible.
"Google has declared that brands with appropriate access and permission to consumer data will have a path forward. Brands not only need to consider how they fast track the collection of that data as quickly as possible to advertise effectively, but more importantly, to also reach consumers in owned channels with personalization like email and SMS," Tim Glomb, vice president of content and data at enterprise marketing platform Cheetah Digital, said in emailed comments.
As with the conversation around FLoC, it is unclear how Google's latest pronouncement will affect its work with the ad-tech industry, especially while the company faces a federal antitrust suit alleging outsized control of the online search market.
"Brands want someone to take ownership of the identity conversation. While Google is making headway, right now, it's simply stalling while developing a more concrete plan. Understandably, Google is feeling pressure from all sides: the ad-tech industry, privacy folks and Congress," said Diaz Nesamoney, CEO of digital marketing platform Jivox.
"[This week's] news is another step towards a definitive solution but still leaves missing gaps in the overarching identity and privacy conversation," Nesamoney said.
Correction: A previous version of this story misstated the type of data that Lotame's Panorama ID uses. The story has been updated.