Advertisers’ objections to the tech giant’s venture
Google is making sweeping changes to the way companies track users online, but advertisers are not yet ready for these moves.
The changes at Google, among the biggest in the history of the $600 billion-a-year online advertising industry, center on its use of cookies, a technology that records Internet users’ activity on various websites so that advertisers can they can be targeted with relevant ads.
According to the Wall Street Journal, Google will begin a limited test that will restrict cookies for 1% of people using the Chrome browser, which is by far the most popular browser in the world. By the end of the year, Google plans to remove cookies for all Chrome users. Marketers, ad tech companies and website publishers are working to ensure their businesses can withstand the transition. They say Google, which has introduced software tools designed to help replace cookies, has not done enough to prepare the market.
The industry is far from ready, said Anthony Katzur, chief executive of the IAB Tech Lab, an ad-tech industry trade group funded by its members, including Google. He pointed out that the company should give people more time to test replacement technologies before removing cookies, and that Google’s planned timing of the full ban — close to the crucial fourth-quarter advertising boom — would be brutal for the industry. “The timing remains bad. Launching it during the biggest revenue generating time of the year for the industry is just a scary decision,” he added.
What Google supports about cookies
Google executives said their efforts to remove cookies included extensive collaboration with the Internet community. Many in the ad industry have urged Google to move forward with these changes after earlier delays in the process, they argue. Its cookie replacement tools aim to help industry achieve business goals while respecting consumer privacy. “We are confident in the industry’s ability to adapt to the transition,” said Anthony Chavez, Google’s vice president overseeing the changes.
Cookies have been around since the early days of the internet. Google’s changes target third-party cookies that the online advertising industry places on websites to track users online. For example, a clothing manufacturer might use the technology to target someone reading articles on a news outlet’s website after that person clicked on a competitor’s ad on another website. The changes do not affect the types of cookies that websites use to store basic information, such as login details.
Although Google’s efforts will initially affect only a fraction of Chrome users, they could eventually mean that billions of Internet users will see fewer ads that fit perfectly with their web browsing habits. Consumer advocates have argued that third-party cookies violate users’ privacy because they can be used to create detailed profiles, including sensitive information such as a person’s medical history.
Advertisers’ objections to Google’s effort
Late last decade, Mozilla’s Firefox and Apple’s Safari browsers began setting limits on tracking cookies due to privacy concerns. Google followed in 2020 with plans to pull them out of Chrome entirely, but delayed the process several times and complaints ensued.
Its plans brought complaints based on cookies to help advertisers target customers and track the effectiveness of their spending. Some of them have also raised concerns that the changes will strengthen the tech company’s dominance by concentrating more critical functions on the company’s browser technology.
Chrome accounts for 65% of global web traffic, making it three times more popular than Safari, the next most popular browser, according to Statcounter data. However, Google said it had promised not to give preferential treatment to its own products as part of an agreement with the UK’s Competition and Markets Authority (CMA), which oversees plans to remove cookies. The company said its agreement with the CMA will apply globally.
Major ad tech companies have already complained to the CMA and Google that its proposals contain significant loopholes for important features such as video and are technically difficult to implement, people familiar with the discussions said. Google described the changes this month as a limited test before moving to remove cookies. The CMA has the ability to effectively veto plans if it concludes they will harm other businesses.
Some industry executives said Google’s lucrative search ad business would benefit from removing cookies because it doesn’t rely on them as much, making it a safer destination for advertisers during the transition.
Google executives said the company’s primary goal is to improve user privacy while providing as much value to advertisers as possible. The changes will require some companies to overhaul their existing products or invent new ones, they said.
