The advertising industry, hit by Google’s cessation of cookie collection, is the true ‘cookieless’ era coming?

Google announces suspension of cookie collection for some Chrome users, advertising industry protests ↑
Choice to protect personal information, other web browsers are already implementing it
We need to prepare for ‘Post Cookie’, a change in marketing strategy is inevitable

Google announced that it would completely stop collecting ‘cookies’, which have been criticized for infringing on consumers’ personal information, by the end of this year. As a result, it is expected that a tectonic shift in the online advertising industry will be inevitable. This is because most advertising companies’ strategies are currently operated based on cookie information provided by browsers. Some companies are already criticizing Google’s announcement, but they seem to be rushing to come up with countermeasures.

‘Cookies’ being expelled from the web browser market

According to the Wall Street Journal (WSJ) on the 4th (local time), Google began testing to restrict website access of third-party cookies in Chrome for 1% of users of its web browser, Chrome. do. Cookies refer to data generated when a web browser user searches or accesses a website. Until now, Google has been sharing this information with online advertising companies to provide personalized advertising based on user search history.

However, as social awareness of personal information protection has strengthened, consumer protection groups have continued to raise criticism that cookies infringe on users’ personal information. In particular, it was pointed out that cookies could cause sensitive personal information, such as the user’s medical history and diagnosis records, to be provided to a third party. In relation to this, the European Union (EU) enacted the General Data Protection Regulation (GDPR) in May 2018, which requires companies and organizations to protect the data and personal information of EU citizens in relation to transactions taking place within EU member states. It was also announced.

For this reason, browser developers have been attempting to block third-party cookies for several years. Mozilla completely blocked third-party cookies in Firefox in 2019, and Apple has blocked cookies in Safari since 2020. Starting with this test, Google plans to completely block cookie collection for all Chrome users by the end of this year. The industry believes that cookies will be completely eliminated from the web browser market in the future, considering that cookie collection is blocked in browsers with high market share such as Firefox, Safari, and Chrome.

‘Third-party cookies’, a key element of online advertising

Cookies are largely classified into first-party cookies and third-party cookies. First-party cookies are used by the website operator, and third-party cookies are used by external companies. The largest user of third-party cookies is the advertising industry. Marketers are identifying individual device environments, user behavior, and content consumption tendencies through third-party data, and are actively utilizing this in marketing and sales. For example, when a web browser user searches for content related to ‘diet’ and then visits another site, advertisements for diet supplements, exercise equipment, and Pilates are displayed on that site. In the industry, this is called ‘retargeting’.

Currently, most marketing in the advertising industry is conducted based on retargeting. As a result, if Google restricts third-party cookies, the advertising industry will not be able to use existing retargeting techniques, making it inevitable to completely revise its marketing strategy. This is why there is so much backlash from the advertising industry. Moreover, Chrome is receiving strong criticism because its market share is overwhelmingly higher than that of Safari or Firefox. According to a recent survey by market research firm StatCounter, Chrome accounted for 65% of global Internet traffic, more than three times more than Safari, which ranked second. Regarding this, Anthony Catser, CEO of IAB Tech Lab, an interest group for the U.S. online advertising industry, said, “Google needs to give the advertising industry more time to test alternative technologies before removing cookies.” The advertising industry is completely unprepared right now. “If this continues, the fourth quarter, when Google announced a complete ban on cookie provision, will be a cruel time for the advertising industry,” he pointed out. He then strongly criticized Google’s decision, saying, “This decision is ‘horrible.’”

Google has no intention of giving up, and the advertising industry is preparing measures

Despite this controversy, Google’s stance is that it will not change its policy to stop collecting and providing cookies by the end of the year. “There are thousands of companies in the online advertising industry, and they will eventually adapt and optimize to this trend,” said Google Vice President Anthony Chavez after announcing the suspension of cookie collection. “I am confident that the online advertising industry is fully capable of adapting to change.” said.

The advertising industry, which has entered the post-cookie era, appears to be busy coming up with alternatives. Some ad tech companies are working hard to introduce new advertising techniques, such as creating unique identifier (ID) information to maximize the use of first-party data. First-party data refers to the highest quality data collected through direct interactions between customers and potential customers and a company.

Google is also exploring alternatives. Currently, Google is introducing a ‘Privacy Sandbox’ beta program that restricts sharing of user data with third parties and cross-verification of IDs between sites to protect users’ personal information. The program’s advertising-related API verification is in progress by market experts, and its official launch is scheduled for the end of 2024. In addition, Google has developed ‘Performance Max (PMax)’, which scans advertisers’ websites with AI and automatically generates product keywords, headlines, descriptions, images, etc.