Google’s ad tech update: are advertisers getting closer to a cookieless world?

Google recently released an early study report on how ads will perform when cookies are not used for ad targeting in its ecosystem. Instead of cookies, the tech giant has been working on the Privacy Sandbox, which is intended to replace third-party cookies.

The trial shows a slight dip in the campaigns' performance.

Yet Google stated that the results were still promising, outlining some downsides in its research paper.

The ad industry is keeping a close eye on Google's tests, but progress has been slow.

Google still intends on eliminating third-party cookies from Chrome by the end of 2024, abandoning the online tracking tools in an effort to catch up with privacy standards.

Test and result:

In the test, Google compared the efficacy of ad campaigns using third-party cookies to the performance of identical campaigns using Privacy Sandbox tools. And, the results revealed that the privacy-enhancing approach reduced ad spending by 2–7% when compared to a cookie-based approach. Conversions per dollar decreased by 1–3%, and click-through rates remained 90% of the "status quo" with cookies.

Google's Privacy Sandbox has been facing scepticism, and some believe Google will struggle to meet its deadline to remove cookies next year. Google, for its part, stated that these preliminary tests are ongoing and should not be interpreted as the final word on how ads will perform once cookies are removed.

Google published the complete results of the test in a white paper on GitHub.

Consumers are becoming more paranoid about how brands use their data. As data privacy concerns grew, third-party cookies were phased out and stringent privacy laws were enacted.

As a result, the legal authorities' focus on the ad tech industry has widened a lot more. In fact, in recent months, ad tech companies like Apple and Google have faced back-to-back antitrust lawsuits.

It puts ad tech companies under pressure to address concerns around this issue and devise a solution that promises consumer privacy. And, as evidenced by this recent update, Google is taking consumer privacy more seriously than ever before.

Now, with the recent Google Privacy Sandbox test, it is clear that the sandbox’s tools perform worse than cookies, but not significantly worse.

In our opinion, at least it gives some assurance to advertisers and publishers that life is still there after Chrome’s cookies have been completely gone.

As Google promises, if the machine learning techniques improve the sandbox’s targeting even more in the future, it will indeed become a painless approach for advertisers to face a cookie-less world.

However, as it will be a whole new game for advertisers, the change will be drastic, and they will undoubtedly need to educate themselves in order to reap better results.

Furthermore, Google must also keep in mind that, on the one hand, a slew of other ad tech firms are developing fancy alternatives—their own advertising identifiers—to replace cookies.

On the other hand, the majority of advertisers are still unsure whether they will be able to target a high degree of relevant audiences with this approach, as it only allows for targeting groups and not individuals. Which, in turn, necessitates that Google establish that its techniques are effective so as to maintain its vice-like grip on the advertising business.

Simply put, while the recent Google sandbox test results appear promising, Google still has a long way to go.