Google will soon ban third-party tracking cookies, who will be hurt?

A decision by Google could reshape the online advertising industry.

With the disappearance of third-party cookies, advertisers will not be able to control the frequency of advertising; the inability to retarget ads to consumers; unable to stop advertising to people already purchased. It is also impossible to calculate the effect of advertising. Let’s imagine that there might be more ads in a specific topic and less high-quality ads in an environment that is hard to categorize.

The search giant said in a blog post that Google will also not build or use alternative tools to track users’ Web browsing when it starts to ban third-party cookies in its Chrome browser next year. The move also comes in response to concerns that Google’s decision to ban cookies would strengthen its dominance of the advertising industry.

But that doesn’t mean Google will stop collecting user data. In the future, Google will still collect user data to target ads, but it will use a new way to protect users’ privacy.

Cookies are small text files stored on the user’s local terminal. By saving this data, users don’t need to log in again when they go to a site, and items added to their shopping cart can be retained. But if users don’t choose to delete or stop cookies, tech giants such as Google will use cookies to collect a large number of browsing history of websites not owned by them, and use this to provide personalized advertising recommendations. In the eyes of privacy activists, this is an invasion of the privacy of users’ data.

In recent years, governments and consumers around the world have gradually strengthened their awareness of privacy protection on the Internet, especially the European Union and its member states, which have continuously increased the supervision and punishment of Google. In December 2020, French data regulator CNIL announced it was fining Google and Google Ireland €60M and €40M respectively for storing advertising cookies on users’ computers without prior consent.

I think the fact that Google restricts the use of third-party cookies on Chrome which means that Google’s competitors are limited the opportunity to build user databases by Google. Google’s dominance of the digital advertising industry will be strengthened by its own development of similar new features in Chrome. The move could also lead to the demise of small and medium-sized advertising companies and could hurt websites that rely on advertising to make money.

Many companies rely on third-party data to generate the user groups they use to target ads because it allows them to be more precise about their Ad spending. But the cost of using Ad technology is high and the effectiveness is black box, making it difficult to discern the true cost/output ratio.

Compared with third-party data, the advertisers’ primary data, obtained directly from other publishers (secondary data), and content Ad targeting (targeting methods based on the relevance of a user’s behavior before and after a site visit) are more accurate, which leading to greater marketing returns.

Breaking away from the messy jungle of third-party data allows advertising to return to its roots. The advertising industry may be able to refocus on creative content, rather than just finding a target audience. Don’t forget: Top notch advertising can be called art, like Coca-Cola’s famous 1971 “Hilltop.”

“It’s important for all marketers to be more open to building this ecosystem together.” In a cookie-free future, a collaborative data-sharing ecosystem will emerge, but there may still be some difficulties. “The idea is there, but it’s still embryonic. There is no universal technical solution that would allow people to do this with mutual trust.”