A Cookie Rollercoaster

For most of us consuming content on the internet, the ads and popups that accompany news articles, recipes, reviews, or blogs are an accepted annoyance we’ve learned to tolerate over the past 25 years. However, for content creators and website owners, the “pipes” supporting the digital advertising landscape have been in a seemingly constant state of flux. Google’s recent decision to keep third-party cookies in its Chrome browser was yet another symbol of the rollercoaster of the web publishing industry.

Third-party cookies have been the cornerstone of internet advertising and digital publishing monetization since the 1990s. Cookies enable third-party networks to track users across websites, allowing advertisers to target them with personalized ads. As privacy concerns and regulatory pressures increased, the push to eliminate third-party cookies gained momentum. In 2020, Apple fully blocked third-party cookies in Safari while Google announced plans to do the same in Chrome by 2022. To replace cookies, Google and others invested in new technologies, such as Privacy Sandbox, to target ads based on aggregated cohort data rather than individual users and the publishing and advertising industries have been manically preparing for this transition. However, Google has now reversed its decision, opting to keep third-party cookies as a default while enabling users to opt-in or out.

In the short term, experts we’ve surveyed believe the implications of this development are positive. For publishers, potential interim disruptions to advertising revenue are mitigated and more runway is created to build first-party data strategies and generally prepare for new privacy-friendly technology frameworks which may come eventually. Advertisers avoid having to re-learn a new set of targeting and measurement criteria. Meanwhile, consumers have more say over their experience, as some value personalization more than privacy.

However, while the ecosystem gets a temporary reprieve, the CEO of one of our borrowers in the web publishing industry did not mince words in reminding us that on a long-term basis, the real priority should be ensuring that the content connects with the audience:

“I don’t think publishers should spend a lot of time and energy figuring out what comes after cookies. We’re not suddenly going back to the status quo. Yes, it’s helpful in the short-to-mid term to keep rates elevated, but ultimately there are no shortcuts. Whether it’s the next iteration of Google’s Privacy Sandbox or otherwise, relevancy, purpose and brand matter. Publishers have to figure out what their value proposition is to an audience and keep a sober estimation about what the size of that business is. If you can do that well, the money will follow.”