Privacy updates to Chrome

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Industry Analysis - Chrome Privacy Updates

Google's Privacy Update might cause marketers to move to other marketing channels that do not depend on cookies. Changes to cookie technology greatly impact the publisher's earnings from advertisements. Below is an overview of the findings.

Implications for advertisers:

  • Google’s Privacy Update will have deep implications for the manner in which some advertising players target consumers online.
  • Google’s Privacy Update will have a huge impact on digital marketing companies that use cookies to target ads.
  • Advertisers might move more towards contextual ads (i.e. more advertising based on the type of content a user accesses) since they cannot use cookies to target users.
  • Ad tech companies would have to substitute cookies with other types of identifiers.
  • Google will provide an API for other ad tech companies to show their ad targeting information in the same extension.
  • Google will launch a browser extension that will reveal the names of the companies that have personalized ads as well as the factors used to customize the ads to the prospects. The types of companies that will be disclosed include ad tech companies, advertisers, ad trackers, and publishers.
  • The lack of targeting can hinder an advertiser's ability to reach its intended consumer.
  • Marketers may make more use of marketing channels that are not dependent on cookies, such as consumer platforms, email, OTT, and mobile apps.

Implications for publishers

  • Publishers will benefit from experiencing higher advertising revenue without increasing ad impressions.
  • Google’s move will set forth the trend in the direction of data transparency started by the General Data Protection Regulation (GDPR) but will negatively impact the middlemen that do not have a direct relationship with their consumers.
  • Publishers that do not explore new ways to monetize first-party cookies, context, and content, will suffer.
  • With Google’s privacy changes, things such as ad targeting, re-targeting, measurement, and attribution will be less effective.
  • Alterations to cookie technology can greatly impact a publisher's earnings derived from ads because an ad is more valuable if it is more targeted to the prospect.
  • With limited third-party cookies, publishers will play a more important role.
  • Publishers will assertively analyze and monetize their data including email and demographic data.
  • Publishers might ask users for additional data to access their articles.
  • If publishers are unable to monetize as they have done previously, they might move their content completely behind paywalls or apply a metered approach.
  • With the ecosystem moving away from direct-response dollars toward branding experiences, premium publishers of high-quality content would be highly benefited.

Research Strategy

We commenced our research by perusing news articles, press releases, and industry publications around Google’s privacy updates for Chrome and the implications for advertisers and publishers. After checking through numerous articles published by leading technology publications and media outlets including, but not limited to, Vice, CNBC, Ad Exchanger, Tech Crunch, The Drum, Digiday, Clear Code, and Ad Age, we were able to find the requested implications.


Sources
Sources

Quotes
  • "Google’s main source of revenue is ads, but Chromium developers claim the change is necessary to enhance user privacy and control."
  • "Although the proposed changes to Chrome will still allow AdBlock Plus filtering capabilities, Hill argued that this would severely limit the ability of users to determine what kinds of content they see on the internet."
  • "In the new version of Chrome, however, extensions will still be able to see the network requests sent to a user’s computer via webRequest, but they will no longer be able to block them."
  • "The changes made to Chromium, however, would prevent uBlock Origin from working at all."
  • "Based on the response to Hill’s bug report on Hacker News and within the Chromium bug tracker itself, many users are pissed that the new version of the browser will prevent them from effectively blocking ads"
Quotes
  • "The changes, among other moves in the digital world toward more privacy features, will likely have deep implications for how some advertising players target consumers online."
  • "But Google’s changes could be a blow to other digital marketing companies, many of which use cookies to target ads and see whether they’re performing. And industry players wondered whether Google might give its own tracking preferential treatment while boxing out other players. "
  • "Some players say they’re relieved about the immediate changes, but are preparing their businesses for a world where cookie usage is lessened."
  • "Users will also be given clear information about which sites are setting these cookies “so users can make informed choices about how their data is used,” the post said."
  • "She said one potential result of changes like this might be advertisers moving more to contextual ads. This would mean more advertising based on the kind of content a user might be accessing."
  • "Another factor to watch will be the effect on ad tech companies, many of which use this type of data to conduct their business. Dataxu’s Baker said some firms have prepared more than others when it comes to replacing cookies with other types of identifiers."
Quotes
  • "In addition to blocking or clearing cookies, users will be able to download a browser extension to see what data is being used to target ads they see. Google will supply that data, and provide an API for other ad tech companies to show their ad targeting information in the same extension."
Quotes
  • "The first step in actually providing users with better insights into how ads are personalized for them, Google will launch a browser extension that will disclose the names of the companies that were involved into getting these ads in front of you (including ad tech companies, advertisers, ad trackers and publishers) and the factors that were used to tailor the ad to the user."
  • "This extension is going live today in the coming months and will work for all of Google’s own properties and those of its publishing partners. "
  • "The company is also making an API available to other advertising companies that want to feed the same information into the browser extension."
  • "Even though in the age of mobile apps, tracking users through browser cookies isn’t quite as important as it used to be, it’s still an important mechanism for many online advertising firms, including Google. "
  • "Google’s move has wide-ranging implications for online advertising and it’ll be interesting to see how Google’s competitors in this space will react to the announcement."
Quotes
  • "Still, the advertising ecosystem is largely built on cookies, as it provides a comprehensive look at audiences for both buy- and sell-side players, allowing ads to be sold at a higher price."
  • "Improved relevancy has increased ad performance, which has allowed advertisers to up the amount they’re willing to spend,” said Andres Moran, vice-president of sales at BounceX. "
  • "Publishers have felt the benefits in increased advertising revenue without increasing ad impressions. Media companies are so reliant on that revenue stream, and this could potentially be a major hit."
  • "Google’s ability to accurately recognize and target individuals is a big reason why they’re so effective for advertisers, and this sets competitors back significantly from that perspective,” said Moran, who believes any cookie-limiting update from Google will draw attention from regulators."
Quotes
  • "Google’s latest anti-tracking privacy tools update hold the potential to remake the world of digital advertising — and entrench power with its powerbrokers."
  • "There is some debate on the exact ramifications of the changes, but the general industry consensus is the move will further the trend in the direction of data transparency kicked off by the General Data Protection Regulation while hurting middlemen without a direct consumer relationship and which are over reliant on third-party cookies. "
  • "They’ve built multimillion dollar businesses off the back of that. But it’s not their data — it’s publisher data. There will be hundreds of companies affected by this [update] but it has been bubbling for years. "
  • "The new information will include the names of other companies that we know were involved in the process that resulted in an ad, he wrote. “For example, ad tech companies that acted as intermediaries between the advertiser and publisher, and companies with ad trackers present in an ad"
  • "Ad tech consolidation has been anticipated for years, as martech and ad tech continue to collide. Plus, more advertisers have sought out single-stack solutions to avoid complexity. Google’s decision to let users block third-party cookies from other ad tech vendors, may compound that trend."
  • "There are companies that still rely too much on farming people’s data from all over the place to create profiles. Vendors who don’t explore new ways to monetize first-party cookies, context and content, will be punished."
Quotes
  • "Transparency, choice, and control over personalized digital advertising — this is what Google Chrome’s new privacy features aim to address."
  • "Google will introduce an open-source browser extension that will provide users with more transparency into which companies are involved in the ad-servicing process, including intermediaries like ad networks, demand-side platforms (DSPs), and supply-side platforms (SSPs)."
  • "The browser extension can also be used across different browsers, will explain to Internet users why the ads were displayed to them, and show them a snapshot of ads they were served recently."
  • "While the new privacy features aren’t as restrictive as Apple’s Intelligent Tracking Prevention (ITP) feature, they still stand to negatively impact the online advertising industry."
  • "Depending on how this consent is managed, it could mean that things like ad targeting, retargeting, measurement, and attribution will be less effective."
  • "AdTech companies that use device fingerprinting as one of the methods to track users, and subsequently link together different activities into a single profile, will have to adapt and accept the fact that this technique will probably be no longer available to them. This will result in less data in user profiles."
Quotes
  • "Changes to cookie technology can have a major impact on how much money publishers earn from ads, because the less targeted they are, the lower their value. Also, the lack of targeting can hamper an advertiser's ability to reach its intended consumer."
Quotes
  • "With limited third-party cookies, publishers also become vastly more important. Context grows significantly in prominence and may quickly develop into being the easiest channel for scaled programmatic activation. "
  • "Publishers will also likely aggressively evaluate and monetize their own data. This includes email and demographic data."
  • "Publishers may also potentially ask users for additional data, based on a key like an email, for access to articles. It is possible a publisher coop could emerge, allowing publishers to share data based on IDs and monetize more effectively across the ecosystem using the data they’ve collected. "
  • "If publishers cannot monetize as they have previously, they could potentially move their content entirely behind paywalls or take a metered approach, leveraging tools such as Google’s Funding Choices or, potentially, Apple News. "
  • "Marketers, meanwhile, may move to marketing channels that aren’t reliant on cookies. This includes consumer platforms, email, OTT, mobile app and others. "
  • "That said, moving the ecosystem away from direct-response dollars toward branding experiences could prove highly beneficial for premium publishers of high-quality content."