For years, Google has been advocating for and delaying its pledge to end third-party cookies. Everything changed July 22, 2024, when the company stated it would not move forward with the deprecation of cookies. It’s big news for the local digital advertising world, and we’ve created this post to explain why and what it means.
The History of Third-Party Cookies
While most consumers don’t know the nuances of cookies, they have a general understanding. Their initial conception was the idea of Lou Montulli, who developed them for e-commerce. If you were on a site, put items in a cart and then left, they’d still be there when you returned.
The advertising industry then took notice and began using third-party cookies for monetization and ad serving. While they aren’t perfect in the ad-serving ecosystem, programmatic ad tactics depend on them in many ways.
These scripts run in the background and collect data on people while they’re on websites. The data collector is not the domain. They’ve been essential as a targeting mechanism.
As DSPs (demand-side platforms) prepared for the end of cookies, they began to adapt to a cookieless future emphasizing first-party cookies. These shifts can still be beneficial, but the reality is that Google and the digital advertising landscape couldn’t seem to get on the same page about what would replace them.
Why the Change of Heart?
Google’s mantra had been that third-party cookies impacted user privacy, and they wanted to use a more equitable way for advertising to reach users. Their plan involved their Privacy Sandbox, which uses APIs (application programming interfaces) that allow users to protect information while browsing.
In Google’s announcement, the organization said the Privacy Sandbox was staying. In lieu of the deprecation, they promised a “new experience in Chrome” that lets people decide what to share when web browsing.
Thus, they are still moving forward with the encouraged adoption of the Privacy Sandbox but realized the shifts and work to evolve were too great for the online advertising world.
Now, there are two courses for digital advertising — cookies and the Privacy Sandbox. Consumers will have a choice to opt out of cookies. However, industry experts have continued to be skeptical about the efficacy of the Privacy Sandbox.
Technical issues have been continuous for the technology, but Google has lauded its testing as being able to recover ad performance without cookies. However, they admitted that the sample size was only about 1% of Chrome users, making it less credible.
The biggest concerns around the Privacy Sandbox were low adoption rates for publishers, latency issues and average ad revenue losses. That’s not a trifecta of confidence!
How Does This Impact Local Digital Advertising?
Many of the digital ads you sell likely have some dependency on third-party cookies. However, there are other ways to target, like contextual targeting and geotargeting. Some digital ad types don’t require cookies, including SEM (search engine marketing), email marketing and social media ads.
With programmatic advertising, third-party cookies are often usable as determined by the DSP. Outside of accurate targeting, one crucial aspect of ad serving is where the ads appear. Having targeting options is valuable, but so is the assurance of premium-quality inventory.
Overall, you can take a collective deep breath because the deprecation isn’t happening. It doesn’t mean the industry isn’t working on better ways to target; it means there isn’t going to be catastrophic disruption.
Local digital advertising continues to grow in its importance to radio revenue. Now that this cloud has lifted, it could mean more optimistic projections for spending in the next year. We look forward to seeing projections for 2025 now that the end of cookies is no more.
Ultimately, the industry wants more accurate ways to serve ads to the right audience. It ensures your customers realize better returns and continue to advertise with you.
It’s big news, and we’ll keep you posted on what happens next.
