How will Google’s new privacy policy impact digital advertising
How will the death of web cookies impact the future of digital advertising industry Unsplash
Some of the challenges that marketers might face in adjusting to the new way of digital advertising

How will Google’s new privacy policy impact digital advertising

Some of the challenges that marketers might face in adjusting to the new way of digital advertising
  • Cookies have come under fire from privacy campaigners for using consumer data for marketing purposes time and again.
  • On March 03, Google confirmed that it is aiming to make third-party cookies obsolete by 2022.
  • We speak to digital experts to understand what is the problem with retargeting, some of the challenges that marketers might face in adjusting to the new way of digital advertising and the overall impact on Indian advertising industry.
What do digital marketers and us have in common? We both love cookies. They have been thriving on cookies to track their users, improve their experience and target ads to the right audience.

However, on March 03, Google confirmed that it will phase out third-party cookies by 2022, which could dramatically alter digital marketing.

The search giant has also confirmed that it will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in its products.

Google’s blog post explains why it is charting a course towards a more privacy-first web, “It’s difficult to conceive of the internet we know today — with information on every topic, in every language, at the fingertips of billions of people — without advertising as its economic foundation. But as our industry has strived to deliver relevant ads to consumers across the web, it has created a proliferation of individual user data across thousands of companies, typically gathered through third-party cookies. This has led to an erosion of trust: In fact, 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits, according to a study by Pew Research Center. If digital advertising doesn't evolve to address the growing concerns people have about their privacy and how their personal identity is being used, we risk the future of the free and open web.”

Firefox and Safari have already phased out the third-party cookie and Google will get there in a year. So, we will all live in a cookie-less (digital) world by the end of 2022.

According to Statista, as of January 2021, Google’s Chrome for Android accounted for 35.27 percent of the global web browser market share. In 2019, Google had a hold of more than 56% of the web browser market. Firefox and Internet Explorer have experienced massively reduced market share in recent years as Chrome’s influence has expanded and new competitors have entered the market.

In a cookie-less world, digital advertisers won’t be able to offer personalised content and measure their campaign’s performance as effectively. Marketers will have to rely on first-party data and they will have to work extra hard to analyse the data at hand and get to know their users personally. They will have to invest more time and labour in building new customer data platforms and finding similarities between different cohorts.

However, as Google’s blog post read, “People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don't need to track individual consumers across the web to get the performance benefits of digital advertising.”

While many marketers have been expecting this, it will take our industry some time getting used to it and to figure out the best ways to use first-party data effectively. So, we reached out to digital experts to understand how a cookieless web will impact the future of Indian advertising industry.

Here is what they had to say:

Sir Martin Sorrell, Executive Chairman & Founder of S4 Capital:

CMOs should take note that this reiterates, once again, the importance of first-party data and how consumer trust and privacy are moving to the forefront of marketing. In the coming years, digital consumer relationships will be earned by customer experience and value exchange. With Google Chrome removing support for third-party cookies by 2022, the time for marketers to start investing in the future is now. S4Capital is guided by our belief that first-party data is the holy grail – and already has its sights on the critical next phase for marketers, where digital identity is in the hands of the brands themselves. In 2020, we merged with leading cookieless measurement company Brightblue and readied brands like Mondelēz to leverage first-party consumer data to plan, personalize, and optimize their digital media and content. As one of our most respected clients said - Google’s decision reinforces again the importance of first party data and that we are entering into a world of at least 25 big walled gardens. It’s a natural evolution of the privacy debate.

Gautam Mehra, Chief Data & Product Officer- dentsu Asia Pacific (APAC) & CEO - dentsu Programmatic - South Asia:

This was an expected announcement. Google had earlier indicated its intention to move away from individual tracking to FLoCs, a kind of cohort-based tracking that would be privacy safe and yet allow for advertisers to track the effectiveness of their campaigns and also be able to retain attributes that matter to advertisers such as the interests/profile of their consumers albeit at a "crowd" level. However, this coupled with the expected deprecation of third-party cookie support in 2022, will be challenging for the ad-tech industry in general. Large publishers will begin to force users to sign-in to consume their content. Advertisers will have to invest largely in managing their first-party data efficiently and extracting maximum value from it, rather than relying on external signals. All in all, it is early times and we expect to see a lot more announcements in this space by various other platforms such as Facebook, Apple, Amazon, TradeDesk, Adobe and MediaMath.

Harshil Karia, Founder, Schbang:

I believe this is a part of an expected move as one sees the depreciation of the cookie coming in place. It only increases the emphasis of first party data and therefore I see more data management conducted by companies & more measures to store data of consumers who visit platforms. I think it will see a rise of dams & a rise of more first party farming by companies so that they can still continue to implement precision based targetting to the right audiences.

Varun Duggirala, Founder, The Glitch:

The move by Google is something that many of us have been anticipating for a while. The conversation around data privacy and usage globally is at a point where many consumers want clarity on how and how much of their data is being used. This move will only bring transparency from a consumer pov for the future and from a marketing standpoint point it’ll move us towards a more transparent data culture in how we market and target consumers and also further deepen our focus on content marketing . So from a macro point of view, it’s going to lead to a lot more growth for all.

Rohan Mehta, CEO, Kinnect:

As global concerns over user privacy & data collection by adtech companies grow, it is imperative that the industry moves towards more efficient methods of anonymised & aggregated ad targeting. While alternative ID-based identifying methods were being worked out by other players in the industry, it is quite possible that these may not have stood the regulatory scrutiny or met consumer expectations for privacy. So, Google's move seems to be a step in the right direction. However, it is important that Google works in concensus with all stakeholders in the digital ecosystem, so as to ensure a level playing field for all the players involved. As for FLoC or any other replacement systems, rigourous testing & opimisation must be carried out ensure that the efficacy of future digital marketing remains par for a median advertiser.

Ahmed Aftab Naqvi, CEO & Co-Founder, Gozoop:

Much needed and much welcomed. As marketers are goal is not just sell, but sell responsibly and a cookie less world is certainly more responsibile. The only cookie we should enjoy is a chocolate chip one.

Even though Google's FLoC technology promises near about 95% of conversions per dollar spend that we tend to get with cookie based advertising but these are just assumptions and will have to be explored and validated further. However as a marketer I feel that we are very well equipped to meet opportunities and overcome challenges by other sources of responsible data like zero party data or second party data for advertising.

Moreover, the consumer demand of better privacy must be addressed in a ECR approach i.e - Education, Consent and reassurance of the data given by the user. We have gained momentum on the consent end but a long way towards educating and reassuring users.

Preetika Ghosh, Media Director, FoxyMoron:

Thanks to the adoption of digital, there has been a paradigm shift in consumer behaviour. Over the last decade, content consumption, e-commerce and networking technologies have witnessed a dynamic transformation.

Before we get into the ramifications of the announcement by Google, one must understand that media efficiency is essentially driven by audience behaviour and interests. It can be tracked at an individual user-level (using cookies) or a group level (using cluster-based solutions like FLoC). By creating these clusters, media targeting will now be based on what group or cohort the consumer falls into. While advertisers might be sceptical, I believe the new approach will keep data at its core, thereby increasing its' affluence. Advertisers will still get the same interest-based audiences, but instead of cookie-based tracking, one will have to direct the messaging to specific cohorts.

The most important difference is that data tracking will now be less intrusive making it a positive step in direction of protecting consumer privacy. It will start enabling the creation of a more user-safe environment and by extension, a more brand-safe ecosystem.

Shradha Agarwal, COO and Strategy Head, Grapes Digital:

Offline targeting has always been based on affinity and interest, it's with the evolution of digital, we went down to the model of cookie-based targeting. But are we really spending a lot on remarketing today? Most of our ads are either targeted towards Affinity-based users or in-market users. We do remarket but our total spends on remarketing is not beyond 20%. It's only in the case of performance campaigns like e-commerce, apps, etc where cookie-based marketing becomes really important. As per recent research, more than 70% of the users because of their minimal knowledge about "adtech" think that remarketing are creepy ads following them and don't outweigh the benefit of customised targeting. Given, the GDPI Rules and Consumer sentiment, I think the recent move is a step in the right direction because advertisers, can still easily continue with the in-market audiences or interest-based audiences. Google will still allow us to target third-party data through Api. So in totality, we would not lose on much.

Sameer Makani, Co-founder and Managing Director, Makani Creatives:

Privacy on the internet is one of the major concerns for users. Since the announcement that third-party data will be phased out, several brands have begun to develop their data infrastructure in order to maximize the use of first-party data. Google’s move will help in formalizing the privacy norms and maintain autonomy. Although Google's move to remove third-party cookies and alternative identifiers is intended to protect users' privacy, it will ultimately intensify the problem of ad fraud. The elimination of third-party cookies and other identifiers makes it much easier for ad fraud to masquerade as legitimate human traffic, which will cost companies that rely on ads a lot of money. With less accountability, ad fraud will almost certainly thrive, exacerbating already-existing attribution and optimization issues.