Coming changes to Google Chrome could completely revolutionise modern internet usage.
Google (GOOG, GOOGL), through Chrome browser, plans to discontinue third-party cookie use – which allows websites to track users across websites to target them with personalized advertisements – by the end of 2018. But this transition won’t come without difficulty: third-party cookies enable targeted advertising campaigns across sites to identify individuals for targeted marketing efforts. The transition is expected to cause discomfort.
Google’s initiative may aim to protect users’ privacy, yet many websites they rely on and value could become less accessible as a result of it. This change marks an expansive overhaul of advertising world and user experience on the internet.
“The open web will experience significant effects,” declared Anthony Katsur, chief executive officer of IAB Tech Lab – an industry group dedicated to advertising technologies – according to reports by Anthony. Katsur added that midsized and smaller publishers will feel its effects most acutely.
AI could transform advertising budgets and marketing strategies. Scroll back up for default view. Hamza Shaban* Senior Reporter.
As part of its Chrome browser upgrade later this year, Google (GOOG, GOOGL) plans to end third-party cookie tracking technology that tracks people across websites so as to provide targeted advertising messages. Unfortunately, however, the transition will likely cause significant discomfort among some consumers and businesses alike.
Google’s initiative may aim to protect user privacy, yet could impact many sites they rely on and enjoy as a result of this move. Google is effectively upending advertising world as we know it today while revolutionising user experiences on the Internet.
“The open web will suffer,” stated Anthony Katsur, Chief Executive of IAB Tech Lab (an ad tech industry group). The long tail of publishers — midsized and smaller publishers in particular — will feel significant impacts.
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Many users are increasingly conscious that what they experience on the internet depends heavily on providers predicting what content might appeal to them; marketers and businesses understand this, too, generating immense value by understanding which ads might resonate more with particular demographics and increasing targeting accordingly.
Without third-party cookies, businesses lack an accurate understanding of who their target audience is – which reduces their ability to generate income from advertising as well as making publishing content free without coercing users into providing emails or phone numbers more difficult.
Chrome currently represents 60% of global internet traffic and is the last major browser allowing third-party cookies by default. Apple (AAPL), Safari and Mozilla both used to do this; but none could compete with Google in market share terms compared with its over 60% share and added advertising dollars that flowed back through when Safari and Mozilla added greater privacy protections; once Chrome says goodbye to cookies entirely there may no longer be another browser left for advertisers to invest their advertising budgets into.
As such, websites reliant on advertising on the open internet could struggle to remain viable, leaving their users exposed to even more irrelevant advertisements as websites attempt to compensate for lost value by increasing ad volume.
Karsten Weide, chief analyst of W Media Research, estimated some publishers could experience revenue losses between 20%-40% due to third-party cookies being deprecated and diminishing effectiveness. “All sorts of websites will close or reduce what services they can offer users,” according to Weide’s assessment, adding: “ironically though this change was intended to protect them, but ultimately this outcome will harm users more.”
Experts cite how the end of third-party cookies could potentially worsen consumer privacy by normalizing granular data collection practices. When more businesses encourage people to log in instead of cookies for data gathering purposes, user profiles become increasingly detailed and centralised – effectively trading one method of monitoring for another paradigm of monitoring.
Google expects the change, expected in the second half of 2024, will bring new privacy-preserving technologies that give websites alternative ways of serving up relevant ads. According to Yahoo Finance, they believe their tools will allow developers to regain some of the lost advertising revenues without third-party cookies – one targeting method involves grouping people together into larger cohorts based on web browsing activity; it does not individually identify each user but instead places them alongside those likely with shared interests.
Google countered criticism that their tools wouldn’t perform as effectively as third-party cookies by explaining that its privacy initiative never intended to replace all features built onto third-party cookies by market players and regulators alike. They further touted how this effort is collaborative between themselves, players from ad industry regulators, consumer advocates, as well as regulatory officials – “no other browser has attempted such an array of solutions before making changes”, per Google.
Change will come, though.
Many of the web’s largest players will be better prepared to handle its overhaul. Tech giants such as Meta (META), Apple and Amazon (AMZN) have constructed walled gardens which give them insight into user preferences and behaviors; major media companies and publishers with sizable followings can rely on subscriptions and an ecosystem of apps; direct relationships have also allowed these entities to generate revenues directly from users while keeping tabs on richer streams of data without using cookies as tracking mechanisms.
Striking an alternative balance on user privacy could trigger an extinction event for many others, particularly websites strained by declining traffic, economic volatility and AI-led transformations. Ad dollars would likely be better spent with trillion-dollar tech companies as cookie death creates an empty void that leads to scrambling over what comes next.
Advertisers tend to withdraw when there are uncertainties,” explained Evelyn Mitchell-Wolf, senior analyst from eMarketer. However, she added: “Ad spending won’t decrease; rather it may shift around more.”
Published Yahoo Finance