In a surprise announcement, Google is reversing years of plans to phase out third-party cookies.
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Google A bold move was announced on Monday that has major implications for advertisers and the future of the web.
The U.S. online giant said late Monday it was reversing a long-planned move to abandon third-party cookies – key text files that track users’ online activity for advertisers.
But what exactly are cookies? What does Google’s decision mean for how you interact with the web (or the advertising industry) in the future?
CNBC breaks down what you need to know.
What are cookies?
Cookies are small pieces of code that a website sends to a visitor’s browser. They still exist when people visit other sites.
These codes silently track our online activities, gathering information about what we are searching for and the types of products we tend to buy. They have become a key way for advertisers to fine-tune their online advertising target audiences.
The use of third-party cookies to track online activity has helped fuel the growth of the digital advertising ecosystem, where advertisers still rely heavily on cookies as a tool to collect customer data.
According to data from Internet technology research company W3Techs, about 40.9% of websites around the world use cookies to collect user information.
But cookies are more than just a way to track users’ browsing habits. They also form a key part of how modern networks operate. They play a key role in keeping users logged in as they browse from one page to another.
One of the reasons for keeping cookies on the Internet is convenience. In short, they make it easier for users to browse the Internet because the ads displayed on shopping devices are more tailored to their interests.
They also help keep the web free to use – many publishers have introduced paywalls and invested in sponsored content in preparation for the anticipated phase-out of cookies.
In some ways, cookies are also an annoyance for many users.
European privacy regulations require websites to display boxes asking users which cookies they wish to have stored on their devices. This results in the now-familiar checkbox asking us to consent to cookies.
What alternatives does Google propose?
Initially, Google attempted to launch a more privacy-focused cookie alternative.
The company launched its “Privacy Sandbox” program in 2019 to find a solution that protects user privacy while still allowing content to be freely available on the open web.
One of the proposals includes so-called “cohort federated learning,” which essentially groups people based on similar browsing behavior, meaning only “group IDs” rather than individual user IDs will be targeted.
Google It had previously said it was “very confident” in the progress of its proposal.
But the company has repeatedly delayed its timetable for phasing out cookies, citing ad industry backlash for implementing the changes, which could mean ad campaigns would be less effective.
This issue is the main reason why Google has now decided to end its third-party cookie depreciation program.
“Essentially, this boils down to Google acknowledging that the marketing industry is not ready for this change,” Cripps law firm partner Matthew Holman told CNBC.
“It also believes a feature can be developed in the Chrome browser to give consumers more choice.”
What is Google launching now—and how will it work?
Google says it now plans to keep cookies. The tech giant is not disparaging them but is “introducing a new experience in Chrome that empowers people to make informed choices throughout their web browsing experience,” the tech giant said in a statement. Blog article.
“We are discussing this new path with regulators and will engage with industry as it is rolled out,” the company said.
Google did not provide specific details of the new approach but said it was discussing the “new path” with regulators and will engage with industry as it rolls out.
For now, Google’s move could mean that the way you interact with the web will look more or less the same. Users will still see a checkbox at the top of the page asking if they want to accept all cookies, or only necessary cookies.
This could have a bigger impact on advertisers, as marketers will continue to gain valuable data by tracking online users.
“The first impact is that the internet will remain free,” Steve Silvers, executive vice president of global creative, media and ecosystems at Kantar, told CNBC in emailed comments on Tuesday.
“Without third-party cookies, it’s difficult for website owners to figure out how to monetize their audiences, which is one of the reasons there has been an increase in gated or paid content in recent years.”
Silvers added that, ironically, some media publishers may even begin to abandon content and put behind paywalls.
Don’t expect “business as usual”
Not everyone is happy with Google’s proposed changes.
On Tuesday, the UK Information Commissioner’s Office said it was “disappointed” that Google had changed its plans.
The regulator, along with the Competition and Markets Authority, is working closely with Google to ensure that cookie replacement proposals adequately protect users’ privacy while not causing too much harm to businesses that rely on cookies for advertising.
The ICO said it would “monitor industry reaction to Google’s decision” and “consider regulatory action against all companies, including Google, where systemic breaches are found”.
However, Vasiliki Makou, a digital strategist at London-based marketing agency Axicom, said Google’s move does not mean it will be “business as usual.”
“While this may seem like a reprieve to some, businesses should not mistake this decision for a return to normal business,” Marku told CNBC via email.
“Efforts to strengthen online privacy protections are not going away,” she added, referring to the impact of privacy laws such as the European Union’s General Data Protection Regulation.
—CNBC’s Jennifer Elias contributed to this article
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