In August 2019, five months before Google announced it was planning to phase out third-party cookies on Chrome, Google introduced the Privacy Sandbox initiative – a “set of open standards to fundamentally enhance privacy on the web”.
In the development world a ‘sandbox’ is a place where coding functions and solutions can be tested in isolation without affecting the live environment. With the Privacy Sandbox, Google can test different privacy tools without impacting its current web ecosystem.
At the time of announcement, the Privacy Sandbox caused a ripple of curiosity, but nothing to suggest that it would be revolutionary.
The ripple grew into a tidal wave in January 2020 when Google made a further announcement that the Privacy Sandbox initiative would effectively end the third-party cookie on Chrome, setting the kill window at 2022.
Suddenly people wanted to know more about the Privacy Sandbox. What even is a sandbox? What does it mean for me? What do I need to do to? How can I do digital advertising without third-party cookies?
What’s in the Privacy Sandbox?
Any article explaining the Privacy Sandbox runs the risk of being out-dated the minute it’s published, with Google spending the next two years testing, tweaking and turbocharging their privacy solutions. So what do we know for certain?
We know that there are currently a number of privacy toys being tested in the sandbox for things like conversion measurement, aggregated reporting and ad fraud.
We know Google will test many more toys over the next two years, so exactly what the final Privacy Sandbox looks like remains a mystery to even those inside the Google walls.
We know that Google won’t turn off third-party cookies overnight – the process will be gradual, chipping away at their functionality until they are eventually retired.
We know there is a bright future for digital advertising beyond the third-party cookie. As a business that relies on advertising revenue, Google will ensure digital advertising continues to still thrive and prosper.
We know that advertisers need to start preparing for the post third-party cookie world immediately. Despite not knowing what the final Privacy Sandbox will look like in 2022, there are foundations that can be put in place over the next two years to enable advertisers to plan, prepare and pivot their digital advertising strategies.
It’s either get on board or get left behind.
- Your data strategy will change
Advertisers that are heavily reliant on third-party cookies will need to change the way they approach their audience-based digital advertising. The proposed changes to third-party cookies will limit the supply of third-party data, making future strategies that rely on it extremely precarious. The future of digital advertising in Google’s new ecosystem will favour first-party data.
Over the last few years there has been a noticeable shift towards first-party data collection and activation in digital advertising, with Customer Data Platforms (CDP) replacing Data Management Platforms (DMP) in many marketing technology stacks.
The CDP has advantages in first-party data collection and storage, making the platform more attractive in a world that favours first-party data activation. But before jumping the gun and onboarding a CDP, work needs to be done to ensure the first-party data is usable.
First-party data repositories need to be cleansed before any activation in digital advertising. This data hygiene work will remove any out-of-date or inaccurate records, create a taxonomy structure, and define which data can and should be collected and activated. Advertisers will often have disparate data sources, collected in different systems, with different taxonomy – this needs to be addressed.
First-party data segmentation, analysis and visualisation will be key components of future digital advertising strategies, but the hygiene stage is critical to the final success.
- Your digital advertising partners will change
The shift to focusing on first-party data will not just impact advertisers and the buy-side – it’ll affect the sell-side too. Publishers and marketing technology vendors who have a direct relationship with their users are likely to have a bigger repository of first-party data, making them more attractive to advertisers who want to utilise it in their audience-based targeting.
Unsurprisingly Google, with its gigantic first-party data treasure chest, is a sell-side company that will benefit, along with other big consumer-facing platforms like Facebook, Twitter, LinkedIn etc. Smaller publishers with rich first-party user data will benefit too, with the likes of subscription news, gaming and e-commerce verticals expected to become more attractive to advertisers given the direct and transparent data relationship they have with their users.
Exactly how first-party data will be activated within the framework of the Privacy Sandbox is not yet completely defined, but solutions like Facebook Custom Audiences and Google Customer Match (where advertisers can leverage their first-party data by securely matching and targeting using the vendor’s first-party data) are likely to become more prevalent in future digital advertising strategies.
- Your measurement and reporting will change
Advertisers currently reliant on post-view measurement (tracking user actions after they have been served an ad but not clicked on it) will need to understand the impact of moving to post-click only models on their measurement framework. Post-view measurement relies heavily on the use of third-party cookies, and it’s unlikely that a solely post-view measurement framework can survive without them.
The Privacy Sandbox initiatives will favour first-party tagging and tracking solutions – Google already has a global site tag which allows first-party cookie measurement within products like Google Analytics and Google Marketing Platform, but it wouldn’t be a surprise if Google releases an updated version as its Sandbox testing continues.
Advertisers need to start revamping their measurement framework sooner rather than later. By implementing solutions like the Google global site tag and creating a testing framework for first-party cookie measurement, advertisers can lay the foundations of their measurement strategy so it’s ready for when third-party cookies disappear for good.
- Your relationship with your customers will change
It’s easy to get swept up in the digital advertising mindset and forget that one of the main aims of the Privacy Sandbox initiative is to give users more control and transparency over the data being collected about them. This new user power has the potential to make or break data-driven advertising strategies.
Once the Privacy Sandbox solutions have been finalised and we get closer to the third-party cookie end date, Google will have a big marketing push to communicate the new rights to its users. Although Google will lead the conversation, advertisers need to think about how they are going to position their own communications to persuade users to allow their data to be used.
For users, this change will be bigger than GDPR, cookie tick-boxes and ‘Why am I seeing this ad?’ – it will arguably be the first time that users gain a transparent understanding and full control over how their data is used in digital advertising.
For advertisers, this means needing to give a value exchange for that data – without a valid reason, users could potentially deny the advertiser access and they’ll be left without any data-driven digital advertising capabilities.
It’s going to be ok
Regardless of which toys are in the Privacy Sandbox in 2022, the way data-driven digital advertising operates will change forever once third-party cookies are retired.
Although some advertisers are concerned that Google’s stronghold on the end-to-end digital advertising ecosystem leaves them increasingly helpless to their power, the reality is that advertisers have always been somewhat reliant on Google’s decisions.
They own and operate some of the world’s most used digital platforms – Google Search, Google Shopping, YouTube, Google Ads, Google Marketing Platform – so it’s inevitable that any changes Google make will affect some, if not all, of an advertiser’s digital advertising strategy.
The good news is that advertisers have two years to prepare for this new world and the preparation can start now. Get ahead of the curve, starting with these steps:
- Understand what first-party data is available, how/if it can be used for digital advertising and how it can be enriched for future segmentation and targeting
- Understand which technology platforms are processing third-party cookie data and start to plan for the transition to technology that focusses on first-party data capabilities
- Understand the existing digital advertising measurement, attribution and reporting frameworks and start to plan out how activity can be measured without third-party cookies
- Understand the resource and support (either internal or external) required to drive and facilitate these changes over the next two years
Advertisers that fail to prepare should prepare to fail, and to fail in this new world will result in their digital advertising following third-party cookies into a different type of box, six feet under in the digital advertising graveyard.