In a plan subject to approval from the UK’s Competition and Markets Authority (CMA), Google is hoping to eliminate the third-party cookie from its browser, Chrome, in the second half of this year.
Meanwhile, the company is rolling out to 1 percent of Chrome’s users a new thing called Tracking Protection. These users are selected “randomly,” as Google’s blog entry reads, and alerted to the change when they next open Chrome, after what we presume is an automatic update.
Tracking Protection restricts third-party cookies “by default,” “limiting” their ability to track the user “across different websites.” Chrome prompts the user to enable third-party cookies temporarily – with the click of an eye icon to the right of the address bar – for websites that require them.
What is a cookie?
The browser cookie is one of the things that make online analytics possible. As tech rival Microsoft explained last April through its online Learning Center, cookies are “bits of data that are sent to and from your browser to identify you” – you being the user.
The cookie feeds user data into, among other things, online advertising – in other words, into the bulk of the advertising market.
According to Statista, online advertising accounted for 62 percent of “total media ad spend” in 2022. In 2021, according to Statista’s source, worldwide digital advertising spending amounted to $522.5 billion. The same source expects the total to rise to $835.8 billion in 2026. The GDP of the Netherlands – 18th in the world – is at present just shy of a trillion dollars.
Google is focused on third-party cookies in particular. (Other cookies store your passwords, for example.) As its blog explains, “third-party cookies have been a fundamental part of the web for nearly three decades. While they can be used to track your website activities, sites have also used them to support a range of online experiences — like helping you log in or showing you relevant ads.”
A change in the tech or in general practices with third-party cookies amounts to a change in the advertising market.
An “industry-wide” solution
Google’s overall initiative is called Privacy Sandbox, where “sandbox” suggests computer programming and its development environments. By the company’s account, this initiative is open-source and industry-wide. Because there is no mention of other companies, however, the industry here appears to be limited to the part of the online world that runs on Google’s two operating systems, Android and Chrome (yes, Chrome is also an OS), runs on Google’s hardware (FitBit, Google Nest, Pixel smartphones), or uses Google’s services (YouTube, Gmail, Google Drive, Google Maps, etc.).
The Sandbox, Google continues, is “needed to improve people’s privacy online” because browsers and platforms (non-Google ones) have begun to “restrict or remove existing mechanisms, such as third-party cookies, without effective alternatives in place.” This has curtailed “critical ecosystem functionality” and “put user privacy at greater risk” by opening the way to “covert tracking.”
The pitch, then, is to help developers and businesses “make money from their sites and apps, as well as reach customers with relevant ads […] without reliance on online tracking identifiers.”
Two disputes
At least one likely motive behind the Sandbox is the aforementioned scrutiny of the UK’s CMA, which last March combined a recent investigation (May 2022) into “suspected anti-competitive conduct by Google in ad tech” with its slightly earlier investigation (March 2022) into “suspected anti-competitive agreement between Google and Meta and behaviour by Google in relation to header bidding.”
As the CMA explains: “A series of tools have been developed and sold to help intermediate the sale of online advertising between sellers (publishers, like newspapers and news websites) and buyers (advertisers). Google has a strong position at various levels of the ad tech stack” – that is, “the supply chain of intermediation services involved in the automatic buying, selling and serving of open display advertisements, operating between advertisers and publishers (including publisher ad servers, SSPs/Ad exchanges, DSPs, advertiser ad servers).”
How Google makes money
Google is the largest company under the umbrella of its parent, Alphabet, and is split in two: Google Services and Google Cloud.
According to Alphabet’s latest annual report (2022), “Google Services generates revenues primarily by delivering both performance and brand advertising that appears on Google Search & other properties, YouTube, and Google Network partners’ properties (“Google Network properties”).”
Google Cloud’s data cloud, meanwhile, “unifies data lakes, data warehouses, data governance, and advanced machine learning into a single platform that can analyze data across any cloud.”
In other words, Google’s entire business runs on reading, analyzing and monetizing data.
