|
Criteo: The Privacy Sandbox Is NOT Ready Yet, But Could Be If Google Makes Certain Changes Soon
Source: AdExchanger
June 27th, 2024
Summary: Criteo’s testing of Google's Privacy Sandbox found that publishers would lose 60% of their revenue on average in Chrome if third-party cookies were deprecated today. And that publisher latency would soar by 100%. So far, publisher adoption of the Privacy Sandbox APIs stands at less than 55%, according to Criteo, which tested the Sandbox APIs across almost 18,000 advertisers, 1,200 publishers, and 100 million weekly ad impressions between mid-March and mid-May.
The bottom line: The Privacy Sandbox isn't ready for primetime in its current state, and others agree. Raptive's Paul Bannister, for example, has said that the Sandbox isn't yet a viable alternative to cookies, and the IAB's final report on the APIs is dire: "Privacy Sandbox will restrict the digital media industry's ability to deliver relevant, effective advertising, placing smaller media companies and brands at significant risk." (Some APIs seem to perform decently; the Privacy Sandbox Attribution Reporting API appears to perform well for optimization specifically, according to MiQ's testing.)
Criteo believes that the Sandbox can become "a sustainable alternative" to cookies if Google follows its specific recommendations and provides a clear roadmap. That could create certainty and urgency for an industry that is not quite prepared for the death of the cookie. In fact, marketers say they feel less prepared today 🔒 than two years ago, with half still dependent on third-party cookies.
Combined, the IAB report and Criteo's testing is putting pressure on Google to make changes 🔒 to the Privacy Sandbox. Google previously dismissed any criticism of the Sandbox proposals, but it can't ignore the mounting evidence that the APIs need serious work. Google appears to be putting in more effort to listen to industry feedback. But how—or if—Google chooses to respond with actual changes to the Sandbox is anyone's guess.
Opinion: Google's has two primary goals with the Privacy Sandbox initiative:
1) Appease privacy advocates and consumers from a privacy perspective
2) Preserve ad performance (and thus monetization) for the ad industry
Unfortunately, these two goals are at complete odds with each other, which makes the whole initiative untenable. We're seeing this play out. Right now, the advertising people are mad. But if Google tweaks the APIs so that they are more effective for advertising, there will likely be a direct trade-off with privacy and the privacy people will be mad. So now what? Google has to prioritize one goal over the other. We believe that Google will always skew towards prioritizing privacy because it helps the company from a consumer perception standpoint (especially versus Apple) while also serving as a tailwind for its ad business. Which means the Privacy Sandbox APIs will never get remotely close to the effectiveness of third-party cookies for advertising.
Now here's the curveball ... THAT'S OKAY! If Google moves forward (not guaranteed, since antitrust authorities have to greenlight Privacy Sandbox and that may never happen), Privacy Sandbox APIs will still serve a critical purpose: They'll provide open-source addressability at scale (despite lacking precision). This will be needed to supplement more precise, yet scale-deficient addressability solutions (e.g. authenticated, user-level IDs like Unified ID 2.0).
This is what ad tech has been preparing for, even itching for, as it has been aggressively innovating around identity / addressability over the last few years. So why is everyone up in arms about the Sandbox APIs not working as well as cookies? How could we ever reasonably expect them to if we know that Google has to appease the pro-privacy people? If anything, Google is just trying to keep up with Apple and maintain Chrome and Android market share. If they aren't able to because of privacy, well then lord help us all, we'll be at Apple's mercy. If you're an ad person, you know that being at Apple's mercy is way worse than being at Google's mercy.
At this point, the hemming and hawing over cookie deprecation in Chrome is just preventing the industry from making progress in other, more important areas. Ready or not, it’s time to get on with it.
|
