Google is facing growing opposition to its plans to remove tracking cookies from its popular Chrome browser.
Ad tech companies Index Exchange and Criteo said in recent weeks that after rigorously testing Google’s Privacy Sandbox, they found that Google’s cookie replacement plan still isn’t ready to launch, four years after it was announced. Google has said it aims to end support for cookies in Chrome in 2025, a deadline that has already been pushed back multiple times.
The Privacy Sandbox offers a set of APIs, or application programming interfaces, that aim to provide similar functionality to third-party cookies, in areas such as ad targeting and measurement, without compromising user privacy.
Several ad tech companies have been extensively testing Google’s Privacy Sandbox for months, ever since Chrome turned off third-party tracking cookies for 1% of its users. That gave the companies a glimpse into how the cookie ban could impact ad prices, web page load times, and publishers’ ad revenue. Some of the companies participated in a multimillion-dollar grant program in which Google provided millions of dollars to fund the investment needed to test the technologies.
So far, the results look pretty bleak.
On Tuesday, Index Exchange, a supply-side platform that helps publishers monetize their web pages and a participant in the grant program, published a blog post outlining its belief that the Privacy Sandbox in its current form poses “major risks to publishers and the overall programmatic ecosystem.”
Index Exchange’s testing of more than 100 publishers and 10 demand-side platforms found that impressions enabled by Privacy Sandbox resulted in a 33% drop in CPMs (the cost to reach 1,000 impressions) compared to those with a third-party cookie enabled. That compares to a 36% drop when cookies and Sandbox APIs were not combined, Index Exchange said.
He said that “while the Sandbox APIs have been helpful,” they “don’t sufficiently fill the gap at the current scale, with the feature set available and the level of adoption.”
Index Exchange’s findings and feature suggestions came days after publicly traded ad tech company Criteo published its own detailed blog post outlining the gaps it found while testing Google’s Privacy Sandbox. Criteo, a demand-side platform that helps advertisers place their ads, also participated in the Privacy Sandbox grant.
Criteo predicted that if cookies were turned off now, publishers’ ad revenue on Chrome would decrease by about 60% on average. The company also claimed that the way ad auctions were set up using the Privacy Sandbox gave Google’s ad tech a “massive” advantage. Criteo offered a list of recommendations designed to help address these issues.
“We’re approaching the most significant product launch in the history of adtech, and the fundamentals are not being met,” Todd Parsons, Criteo’s chief product officer, said in an interview.
A Google spokesperson said of Criteo and Index Exchange’s findings that it’s not possible for a single shopping platform to predict publishers’ revenue performance, as publishers typically work with dozens of different demand sources.
“Additionally, we expect performance numbers to evolve, and they do not currently reflect how the overall ecosystem will perform in a real market – which won’t exist until adoption grows alongside cookieless third-party traffic,” the Google spokesperson continued in a statement.
Separately, the IAB Tech Lab, an industry group that creates digital advertising standards, recently released its own scathing critique of the Privacy Sandbox, an update to a report it published earlier this year. The Google spokesperson criticized the report in general terms, but added that he was encouraged that the IAB Tech Lab is now focused on discussing new features and sharing integration tips with the industry, with input from the Chrome team.
Anthony Katsur, CEO of IAB Tech Lab, said there is an industry consensus that Privacy Sandbox does not yet adequately support a host of advertising features, including ad targeting and ensuring users are not bombarded with the same ads.
“We don’t see the cookie as the root cause of privacy issues in the ecosystem, but if Chrome thinks there’s a better solution, we’d like to see it,” Katsur said. “That’s not the current form of the Privacy Sandbox. It doesn’t work.”
Privacy Sandbox needs approval from competition regulator
Growing backlash from the advertising industry could derail Google’s plans. In 2021, Google committed to handing over oversight of the rollout of its Privacy Sandbox and the removal of cookies from Chrome to the UK’s Competition and Markets Authority.
The CMA is seeking to ensure that the Privacy Sandbox does not distort competition in the online advertising market or favour Google’s ad technologies and that it gives users sufficient control over how their data is used. It has sought feedback from ad tech companies, publishers and advertisers, some of which are expected to provide the antitrust watchdog with detailed reports on their testing of the Privacy Sandbox. The CMA is also taking into account recommendations from the UK’s data protection authority, the Information Commissioner’s Office, to ensure that the Privacy Sandbox provides adequate protection for users’ privacy.
The CMA was not available for comment ahead of the UK general election, which is due to take place on Thursday. The CMA’s last quarterly update on the Privacy Sandbox process, published in April, said Google was meeting its commitments.
Several adtech companies, including other grant recipients, told Business Insider they were not ready to publish the results of their own Privacy Sandbox tests.
An adtech executive at an SSP, who declined to comment publicly until after his Privacy Sandbox report is finalized, said he agrees with Criteo’s findings in its recent blog post and that moving away from cookies will create a serious challenge for the industry.
“It’s a very heavy work for everyone,” said the SSP manager. “There is such a technological effort, of course, but everyone will have to change their purchasing habits.”
Adtech experts said much of what they would need Google to do to improve the Privacy Sandbox could take months to implement — and might not arrive in time for Chrome’s cookie deadline next year.
“We’ve seen quarter after quarter these challenges get resolved, but it’s fair to say the old timeline just wasn’t long enough for the transition to be completed,” said James Colborn, global head of data at adtech firm Teads.
However, he added, the Privacy Sandbox already appears to perform better than a completely cookieless environment, “which is promising for an early-stage technology.”
Of course, the Privacy Sandbox isn’t the only alternative to the ad ecosystem once cookies are gone. Third-party cookie targeting on Safari and Firefox browsers hasn’t been available for years, and several companies have proposed alternatives like adopting new identifiers or increasing their use of first-party data.
RTB House, an adtech company that works with brands and agencies, has also been testing alternatives to cookies alongside the Privacy Sandbox, and while it has seen similar dynamics to Criteo, it is taking a different stance.
“Our assessment suggests that when the time comes, the ecosystem will be adequately prepared,” said Michael Lamb, RTB House’s chief commercial officer.