Google’s move against individual web tracking might be good for consumer privacy—and could look good to antitrust investigators—but it will also consolidate Google’s power in interactive advertising, several advertising sources told Fast Company on Wednesday.
Google, which controls more than half of the global interactive advertising business, said Wednesday it will stop targeting ads based on browsing data collected about individuals as they move around the web. Such data is gathered when a marketer or ad-tech company drops a cookie—a line of code that can be used to record website visits—into a user’s browser. Google already said last year its Chrome browser would no longer support the practice, effective in 2022, but now the company says it won’t develop an alternative way to track individuals.
The news is not being greeted warmly by the ad industry, much of which favors individual tracking of some sort to make ads more targeted, relevant, and click-worthy. “It is a massive blow to industry efforts, and a bold move during a time when they are under scrutiny through the Department of Justice,” says John Donahue, CEO of digital services consultancy WLxJS, in a text to Fast Company.
Google’s announcement is no doubt good news for personal data privacy. And it represents one of the interactive advertising market’s two giants—the other being Facebook—signaling that the web may be moving away from its dominant business model of offering free stuff in exchange for viewing carefully targeted ads.
But it also could mean that when individual targeting ends, it’ll put ad industry giants like Google, Facebook, and Amazon at an advantage over smaller competitors. That’s because it’s the big players that will already have massive stores of targeting data when the cookie game finally stops, points out Diana Lee, CEO of digital marketing firm Constellation Agency.
Lee says that sophisticated marketers with access to third-party data will be fine once Google’s new policy kicks in. But she adds that “this is worrisome, as it ultimately is pushing more power and privileged information into the hands of Big Tech.”
Large marketers (such as Coca-Cola or Omnicom) and advertising companies (like Facebook and Google) can afford to fill in the gap left by cookie data by purchasing various kinds of consumer targeting data from brokers like Oracle, IHS, and Experian, Lee says. But smaller marketers, including mom-and-pop shops, won’t be able to afford such data.
Note that companies will still be able to target ads based on what they learn about people’s visits to their own websites. That’s first-party tracking data. But Lee says that many small businesses don’t even know how to use their own first-party browsing data to help target their ads.
Google is also, in effect, setting the rules for what’s okay and not okay for the whole advertising industry with regard to privacy, says Brendan Eich, cofounder and CEO of the privacy-focused browser company Brave.
The disappearance of third-party cookies might drive more businesses to advertise on big platforms like Facebook and Google.
In the end, the disappearance of third-party cookies might drive more businesses to advertise on big platforms like Facebook and Google. “[It] will favor one part of the internet,” says Tal Chalozin, cofounder and CTO of the TV advertising platform Innovid. “For marketers on the open web and outside of Google, the cost to advertise will go up massively once third-party cookies phase out.”
Google’s news marks the second blow against tracking individuals around the web in a little over a month. In late January, Apple said its iOS 14.5 update will require apps that want to track users’ movements within other companies’ apps or websites to get explicit permission to do so from the user. This infuriated Facebook’s CEO Mark Zuckerberg, whose companies’ apps have long done this without such explicit permission.
When Big Tech companies announce a major strategic change they often couch it as a wonderful thing they’re doing for consumers, but underneath the PR layer, their moves often align nicely with the company’s strategic goals and bottom line.
Google’s decision will indeed strike a blow against surveillance capitalism. But there will be collateral damage, and it won’t be to Google.