Antitrust Watchdog's Privacy Sandbox Guidance Spurs Questions on Buy-Side Involvement

In its latest quarterly report released late last week, the U.K. antitrust watchdog has provided guidance for ad-tech firms, publishers, and advertisers to test the Privacy Sandbox tools, expecting most testing to take place from Q4 2023 and asking for results to be submitted by the end of Q2 2024 at the latest. So far, the Competition and Markets Authority (CMA) has concluded that Google has adhered to the legally binding commitments during the reporting period spanning from July to September this year. This means the third-party cookie deprecation timeline of the second half of 2024 still holds, as long as the testing of Google's solutions finds they do not overly favor the tech giant. However, October is a busy period for the ad industry, focused on maximizing profits and preparing for the year ahead, especially after a relatively depressed year for ad rates. "Brands and agencies need to make money now," said an industry executive who wasn’t authorized to speak to media told Adweek. "The ask is to do a very hard math problem to reach just 1% of chrome impressions," they added, saying that that's "vanishingly small money. A lot of the buy side is going to make very reasonable decisions to stay out of this because it's holiday season." When contacted for comment, Google pointed to industry leaders on both buy and sell sides who have publicly shared their testing plans. Google's Rare Privacy Sandbox Test Highlights More Questions for the Cookieless Future Google announced its plan to disable third-party cookies—ad delivery and ad tracking mechanisms that have long underpinned the ad industry—for 1% of Chrome by Q1 2024 as part of testing. Once the CMA gathers the results from the tests in the first half of 2024, there will be what the CMA calls a standstill period of between 60 and 120 days to determine whether cookie deprecation can go ahead. While audiences can still be monetized by cookies, supply-side platforms (SSPs) and other ad-tech players have not been incentivized to explore alternatives to cookies. The rise of MFA is costing brands Google needs to secure approval from the CMA for its Privacy Sandbox tools. This means, the tech giant is expected to be on its "best behavior" and not indulge in audience filtering to misrepresent the eyeballs that they have on offer to advertisers, the executive said. However, the recent debate around the low-quality and made-for-advertising sites, plus buyers' concerns over the excessive use of AI-driven media buying tools like Performance Max—which critics say trades transparency for performance—could end up meaning brands are getting less value for advertising. "I don’t think you can look at Privacy Sandbox in isolation from Performance Max,” the executive noted. "The more that ad-tech intermediaries focus on getting the most lucrative possible ads on the cheapest content, the less value brands get for advertising. A lot of market advantage ends up moving toward any SSP that is willing to have extremely low standards on what sites they'll monetize." In an ideal world, every advertiser would have an inclusion list of premium publishers, so low-quality sites would stop serving ads, ultimately giving more leverage to publishers. Publishers again get the short end of the stick Meanwhile, the nonprofit Movement for an Open Web (MOW) raised concerns over Google’s increasing visibility over the auction dynamics, potentially leaving publishers even more in the dark. "The CMA didn’t mention that only Google can compare the results of Prebid-sourced demand, Privacy Sandbox-sourced demand and its own sourced DV360-soured demand that makes up a significant percentage of publisher’s revenues," a MOW spokesperson told Adweek. The sole purpose of an SSP, the spokesperson said, is to aggregate demand from multiple sources and optimize the best bid prices for a publisher’s ad inventory. However, Google’s Privacy Sandbox protocol Fledge—a mechanism to enable elements of ad retargeting but at the browser level—eliminates their ability to do so. “Publishers’ too want to compare which business-facing solution partners can help them. But Google is eliminating visibility and choice from publishers to select various sources of aggregated demand,” the spokesperson added. A Google spokesperson responded that “Protected Audience API (formerly known as Fledge) enables SSPs to aggregate demand and optimize for the best bid prices. Publishers continue to have visibility into and choice over their demand sources, so claims that it eliminates any of these capabilities are simply wrong." This story has been updated to include Google's comments.