June 24, 2021
Ad-Tech: Google delays phasing out third-party
cookies in Chrome until 2023
In a blog post this morning, Google announced that it would be delaying its phase-out of third-party cookies from Google Chrome until mid-late 2023.
All you need to know: In a blog post this morning Google announced that it would be delaying its phase- out of third-party cookies until mid-late 2023. The timeline has now been broken into two stages, in late 2022 after testing is complete and APIs are launched to Chrome, publishers and the advertising industry will be given time to migrate their services. Google expects this to last for ~9 months and will monitor feedback before moving to stage 2. In stage 2, expected to start in mid-2023, Chrome will phase out support of third-party cookies which is expected to take 3 months finishing in late-2023.
What may have driven the change: The company noted that "While there’s considerable progress with this initiative, it's become clear that more time is needed across the ecosystem to get this right." Google noted giving more time for public discussion as well as continued engagement with regulators as two reasons for the delay. The latter has been a discussion of late with Google working with the United Kingdom's Competition and Markets Authority (CMA) following the CMA's announcement in January that it would be investigating Google's 'Privacy Sandbox' browser changes and more recently with the EU announcement that it would be launching a formal antitrust investigation to "Examine whether Google is distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use." As we noted last week, outside of the regulatory pressure, Google ran into a FLoC block when multiple reports cited Amazon blocking its new tracking system FLoC from gathering data on their properties.
Our view: Overall, it's difficult to determine right now what exactly this changes for the end-result of FLoC, but the additional time is a benefit to the open-internet providers to continue to work toward alternatives for third-party cookies. Companies have been working individually and collectively to create alternative identifiers to ensure performance following the loss of cookies. These headwinds to the launch Google's FLoC system will give them more time before the loss of cookies and also improve the maturity of their identifiers relative to FLoC when it is launched. One interesting note from Google's announcement was that the additional time would help the advertising industry migrate their services and help "ensure that cookies are not replaced with alternative forms of individual tracking, and discourage the rise of covert approaches like fingerprinting." While it's clear this will be an ongoing focus for the industry, we believe that today's announcement helps to alleviate near-term concerns and some of the pressure from this bear thesis that has been an overhang on the industry.