It has been a few months since Google announced coming changes in Chrome which allow users to block or clear 3rd party cookies more easily. This could lead to a change in how the advertising industry collects and re-targets audiences, as well as measurement and attribution. Some industry observers reckon that this move will strengthen Google’s position in the ad tech space, but at the same time that it is a markedly softer approach compared to Apple’s ITP 2.0. Given that Chrome’s market share is over 60%, any changes they implement will definitely have an impact.
IAB SEA+India’s Commerce Committee recently discussed the impact and implication to the eCommerce players in the region, eCommerce Brands, Adtech Platforms, Publishers and Media Agencies. We looked at each of these stakeholders, and below are the key take-aways from our discussion.
eCommerce Brands – Business as Usual but need to keep a watchful eye.
We observed that for eCommerce brands, it’s still early days on what the impact will be but eCommerce brands need to keep a watchful eye. With less 3rd party cookie tracking, audience targeting will be less effective. Brands will need to rely more on other targeting options such as contextual targeting, however such targeting has its own limitations and needs to evolve. Another impact is how conversions will be attributed, as removing 3rd-party cookie tracking will essentially reduce the accuracy of 3rd-party attribution. However, given the higher spend in mobile in-apps ads which rely on device-id, the impact could be slower in SEA region.
Adtech Platforms – Most impacted, and still searching for a consensual solution
Adtech Platforms such as 3rd-party audience providers and demand-side platforms that rely on cookie audiences will be most impacted by this change. What is more worrying for these Adtech Platforms is how Google operates on different playing fields, as Google is operating as both a player and as the judge of other platforms. Some speculate that if Google only allows audience targeting specifically for their DV360 or Google Ads, and shuts down other Adtech Platforms (i.e. treating Google’s own cookie audience data as 1st party data, and other platform cookie data as 3rd party data), it will give advertisers another reason to consolidate into Google’s tech stack, and thus further erode the competitiveness of other Adtech Platforms.
Media Agencies – One more reason to run on Google’s tech stack
For media agencies, the ultimate objective is to meet client marketing objectives to drive business outcomes, and if using Google becomes the most viable solution to have meaningful targeting, they might be more likely to recommend shifting clients towards Google’s tech stack, from ad serving, bidding, attribution and analytics. This would also represent a consolidation of power to Google.
Publishers – Building out alternate offerings
With a portion of programmatic media revenue that ends up as “Adtech Tax”, publishers are already building alternative offerings to advertisers that go beyond programmatic. Offerings such as sponsored content, native advertising already form part of these key offerings. With the reduction in audience targeting, it will further accelerate the plan to offer such alternative offerings.
While the actual impact of Google’s privacy moves are still to be seen, and Google has made efforts to meet the industry halfway, we have also seen numerous universal ID initiatives such as Digitrust and TheTradeDesk’s Unified ID solution emerge and gain good adoption. It’s important now for different players in the ecommerce (and to a larger extent, adtech players) ecosystem, to start to “Prepare for the worst and hope for the best”, working together in an open, privacy-friendly world.