On Wednesday, Google reinforced its stance on how ad targeting should work after it withdraws support for third-party cookies next year. The announcement moved markets but left some critical questions unanswered, and it has led to the loss of several billion dollars in shareholder value among ad-tech players.
In short, Google is doubling down on its Privacy Sandbox initiative, and companies without first-party relationships with consumers won’t be able to use their identity solutions on Google’s demand-side platform DV360, ad platform Google Ads and AdSense once Chrome no longer supports third-party cookies.
This is a body blow to the independent ad-tech sector’s proposed approach to audience targeting which has primarily centered on using hashed email addresses as a substitute for the cookie.
David Temkin, Google’s director of product management, ads privacy and trust, specifically called out “PII graphs based on people’s email addresses” in a blog post, and noted that Google will continue to engage with the rest of the industry by being “all in on the Privacy Sandbox.”
Market moving questions
In particular, Google’s latest policy statement over the future viability of Unified ID 2.0, an email-based identifier first proposed by The Trade Desk and later adopted by pretty much all of the independent ad-tech sector—in the Google Ads ecosystem.
I’m looking for them to play by the same rules they foisted upon the rest of the industry.
Tom Kershaw, CTO, Magnite
Markets reacted accordingly. On Wednesday, the day of the announcement, the stock prices of all the leading publicly listed ad-tech companies were down at the close of trading, with LiveRamp, Magnite, PubMatic and The Trade Desk experiencing notable drops in share price after the bell on Wednesday and continuing into Thursday.
Some—notably Criteo, LiveRamp, PubMatic and The Trade Desk—issued statements that can be collectively read as, “This is fine. We didn’t expect your help anyway, Google.” But the imprecise wording of Google’s statement has led to contrasting opinions about its implications.
The Trade Desk CEO, Jeff Green, noted, “Google is doubling down on its own properties, such as search and YouTube and adding bricks to the walls around those properties. The trade-off is that Google no longer values serving ads on the rest of the internet as much—certainly not as much as they once did.”
Meanwhile, LiveRamp is hopeful Google’s updated stance will permit publishers to pass its email-based identifiers into the bid stream.
The industry is mostly stuck in the first three stages: denial, anger and bargaining.Ruben Schreurs, chief product officer, Ebiquity
Travis Clinger, svp, addressability and ecosystem at LiveRamp, told Adweek advertisers will still be able to use LiveRamp’s IdentityLink-identifier on DV360. “You just have to do the matching closer to the publisher at the exchange level,” he said. “It’s a chance to get closer to the marketer because private marketplace deals facilitated via the exchange brings the transaction one step closer to them.”
Additionally, PubMatic is using the update as an opportunity to encourage advertisers to look outside of the Google ad stack.
PubMatic CEO Rajeev Goel is convinced it will accelerate publishers’ response to third-party cookie deprecation.
“This will benefit advertisers who are increasingly seeking to diversify spend away from the walled gardens without losing the personalization and campaign ROI they are used to from known identity,” he said.
More questions than answers
Google has been selective in its communications, leaving some in the industry with more questions, and contrasting interpretations.
Andrew Casale, CEO of Index Exchange, noted that few expected Google to support initiatives like PreBid 2.0 and interpreted this week’s announcement as an indication from Google that its ad stack will operate differently than Privacy Sandbox.
“Google is saying, ‘We’re doubling down on FLoCs and cohorts, and we’re going to continue to use logins and people-based information to aim ads to customers on our properties,” he said.
Meanwhile, Tom Kershaw, CTO of Magnite and chairman of Prebid, a trade outfit that stewards Unified ID 2.0, wondered if Google will load the deck in its ad stack using the veil of privacy.
“One clarification I’d like to hear from them is whether or not it means there’ll be no login for DBM [a historic name for Google’s DSP], no login for YouTube and no login for Google properties. I’m looking for them to play by the same rules that they so generously foisted upon the rest of the industry,” he said.
A Google spokesperson did not respond to Adweek’s request for clarification.
So, what now?
Robert Webster, founder of digital consultancy Canton Marketing Solutions, told Adweek the fact that Google did not mention how measurement will work was curious. “For the most part, measurement relies on third-party cookies, and that will go,” he said. “Post-impression tracking, which accounts for 90% of all sales you get in display ads, won’t be supported. … I suspect Google will release a probabilistic form of tracking similar to Apple’s SKAd network.”
It is going to be oh, so messy.Joe Root, CEO, Permutive
Joe Root, CEO of Permutive, a company that helps publishers monetize while remaining compliant with new privacy rules, predicted “chaos” as the industry transitions to the new practices.
“Email identifiers like ATS will work in Safari if you’re using The Trade Desk but not in Google’s DSP,” he said. “At the same time, email identifiers like ATS won’t work in Apple apps, but third-party identifiers will work in Google Apps. FLocS will work in Chrome but won’t work in Safari or Firefox. It is going to be oh, so messy.”
Separately, Ruben Schreurs, chief product officer at Ebiquity, said that many of the workarounds to continue addressable advertising after the demise of such identifiers such as third-party cookies “failed to get the point” and that this was indicative of a collective grieving process throughout the industry.
“No matter how much you hash or anonymize data, it remains personal data if at some point it can be matched to an individual. It’s really as simple as that,” he said. “In terms of the five stages of grieving [and] the loss of third-party addressability in online advertising … the industry is mostly stuck in the first three stages: denial, anger and bargaining. The sooner we move on to acceptance, the better for all.”