Google Delayed Its Third-Party Cookie Ban. What That Means for Businesses

Google has announced that it will delay implementation of their third-party cookie ban for its Chrome browser.

The move follows up a January 2020 announcement, in which Google stated that it would no longer allow third-party cookies on Chrome by the end of 2022.

Now, Google plans to phase out third-party cookies starting in mid-2023, although that timeframe is subject to change.

In the announcement, Vinay Goel, Privacy Engineering Director of Chrome, explained Google’s reasoning. “While there’s considerable progress with this initiative, it’s become clear that more time is needed across the ecosystem to get this right,” Goel said.

The stay of execution is likely to please advertisers and small- and medium-sized businesses (and basically every business other than Google), even if privacy advocates would prefer the ban happen sooner rather than later.

Regardless, businesses should be on their toes. The looming ban on third-party cookies in Chrome, when it occurs, provides an opportunity to reevaluate advertising.

Why Ban Third-Party Cookies?

Third-party cookie deprecation, which many browsers already feature, is an attempt to carefully balance the privacy of internet users with benefits reaped by advertisers.

Previously, Google Director of Product Management, Ads Privacy and Trust, David Temkin said, regarding the proliferation of cookies:

“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.”  

Simply put, lots of people don’t like it when companies track and sell their data. 

Now Google’s plans are on hold as it tries to find a way to implement the change without harming companies like web publishers, which rely on cookies for revenue.

What Are Third-Party Cookies?

Third-party cookies are cookies that are stored under a different domain than the one you’re visiting. If you Google “chocolate chip cookies” and then two days later, while visiting an unrelated website, see an ad for Mom and Pop’s Chocolate Chip Cookies, that’s because your browser stored a third-party cookie and then used that information to send you targeted advertisements.

Other Browsers Already Block Third-Party Cookies

Brave browser, Safari, and Firefox block third-party cookies by default, although they allow you to de-select that option if you so choose. 

Chrome’s so-far friendly stance on third-party cookies is a big part of why it’s only considered average, privacy-wise.

These other browsers, though, do not have the reach of Chrome, which accounts for nearly 65% of the market share as of February 2021. That makes it by far the most popular browser. 

Google is the only company with a web browser that also has a substantial ad platform, which is why it’s been slower to adopt a third-party cookie ban.

Google Has Been Testing FLoC as a Replacement for Third-Party Cookies

Among the many tools it is testing in its “Privacy Sandbox,” Google is hoping FLoC will provide a viable alternative for advertising. FLoC stands for Federated Learning of Cohorts, and it’s similar to third-party cookies. With FLoC, Google’s AI places a person’s browsing history into a “cohort” of users with similar interests without isolating their data. Google can then show advertisements to users while supposedly maintaining privacy. 

Google claims that FLoC sees “at least 95% of the conversions per dollar spent when compared to cookie-based advertising,” along with enhanced privacy.

Some advertisers are skeptical of those numbers. Additionally, privacy advocates worry that FLoC is in practice not that different from cookies, since users’ habits are still being closely watched.

What Effect Would the Ban Have on Businesses?

When Google announced it would delay third-party cookie deprecation, ad tech stocks surged. That makes sense: companies rely on third-party cookies to reach users on Chrome. 

Previously, U.S. Justice Department investigators expressed concern that Google’s proposed ban would violate antitrust laws. 

On the surface, Google’s announcement that it will delay the ban on third-party cookies sounds good for non-Google advertisers and other businesses. It’s also bad for Chrome users who favor privacy, although they can always turn off third-party cookies or switch to a browser that does so automatically.

Should the ban end up happening (which seems likely at some point), ad companies don’t need to declare a code red. If Google ends up pursuing FLoC, and its 95% conversion rate compared to third-party cookies is accurate, the effect will be limited. 

To Prepare for a Third-Party Cookie Ban, Business Should Focus on Content

In the absence of third-party data, first-party data will become even more important — that’s data you collect directly from customers. Purchasing information, newsletter requests, and call-in information are all first-party data.

Many businesses have been neglecting first-party data as they become reliant on advertising with Google. A third-party ban would force businesses to engage more with first-party data. 

Businesses can also focus on content creation. Videos, blogs, and in-depth articles are excellent tools for reaching consumers. Quality content builds brand visibility and trust and engages people in ways that third-party advertising doesn’t.

So while a third-party cookie deprecation may have immediate negative effects, it’s also an opportunity for small businesses to refocus priorities. They should take advantage of the time while they have it.