Google Won’t Kill The Cookie. Here Are The Winners And Losers

Google’s announcement Monday that it won’t kill the third-party cookie in Chrome rocked the ad industry. In the immediate aftermath, it seemed like the sword of Damocles hanging over the ecosystem had been sheathed. Certainly, marketers no longer have to wring their hands over how their digital ads will perform without cookies to power targeting and measurement.

Many advertisers were already on the journey to move away from cookies. Havas Media Network’s global EVP Jamies Seltzer, who oversees consumer analytics, said that 99% of its clients are already working to run cookieless campaigns.

But Google’s decision to keep cookies around will still have an uneven impact across the industry, according to ad industry experts. That’s already becoming apparent in the mixed reception some public adtech companies got on Wall Street.

Criteo’s stock popped 10%, shortly after Google made its announcement, while LiveRamp’s dipped about 5%. After all, many companies have spent the last four years touting technology and business practices that will subsist without the cookie.

Here are the companies that most stand to benefit and those that are most at risk, according to industry analysts and executives.

Google always wins

Google’s Privacy Sandbox tools, which were meant to replace the ad tracking and measurement functions of the cookie, had been buffeted both by government regulators who worried they were anti-competitive, and by adtech companies who claimed they didn’t work. Even marketers were unconvinced, with 69% of B2C marketers skeptical that the Privacy Sandbox was a viable cookie alternative, according to Forrester’s Q2 CMO Pulse Survey this year.

“Privacy and anti-monopoly law are entirely overlapping issues for it,” said Jason Kint, CEO of the publisher trade association Digital Content Next.

Now, Google has taken its ball out of the sandbox and gone home. In doing so it has, for now at least, silenced the persistent thrum of regulators like the U.K.-based Competition and Markets Authority (CMA), which published a quarterly audit of Google’s Privacy Sandbox efforts. “Given these developments, we will not publish our planned quarterly update report at the end of this month,” the CMA said after Google announced cookies would be staying.

Google’s next move is too vague to elicit any immediate criticism, and its public statements strike a tone that’s conscientious about concerns consumers have about how their data is used. “We now believe user choice is the best path forward there,” said company CEO Sundar Pichai during Tuesday’s second-quarter earnings call.

In ending its plan to stop passing cookies in Chrome, Google has hit the reset button, taking some of the immediate pressure off itself, while still marching the industry towards cookie deprecation by another means.

The Trade Desk, Criteo, and LiveRamp will suffer short-term setbacks

Adtech companies that spent years investing in their cookieless infrastructure, like The Trade Desk, Criteo, and LiveRamp, will see setbacks as immediate demand for those tools declines, said Dan Salmon, a partner at New Street Research.

The Trade Desk had been brandishing an email-based cookie replacement technology called Unified ID 2.0. But widescale adoption, with third-party cookies remaining, is sluggish. If it caught on, it would have given The Trade Desk a real base of authenticated, logged-in users—the holy grail for companies collecting online audiences. But now there’s less urgency for its use, said Salmon. “They could have won share,” he said.

Likewise, the persistence of cookies is a negative for LiveRamp, which had built a new generation of identity tools without cookies, Salmon said, noting that there’s not going to be a lot of urgency to adopt those toolsets in the near term.

“They are short-term losers,” said John Donahue, partner at programmatic consultancy Up and to the Right. However, he and others believe the identity solutions these companies have been developing, which require consumer consent, will be valuable over time as consumers demand more control over how their data is used.

Tom Triscari, CEO of tech research firm Lemonade Projects, still sees a bright future in companies that offer ID solutions. “I’m a glass half full on them,” he said. “The alternative ID is still the future.”

Publishers that invested in cookieless solutions have already lost time and might lose more money

Publishers that have moved away entirely from relying on third-party cookies to power their ads will see a revenue hit and might have to revert back to cookie solutions, as marketers re-focus spend on cookie-based solutions, said Ilhan Zengin, CEO and founder at publisher adtech firm ShowHeroes.

Those publishers are weary with Google’s repeated pivots, said Joe Root, cofounder at adtech platform Permutive. “Google changing its mind again messes with their strategies and makes it harder to run their business,” said Root. “It creates chaos.”

But like alternative ID solutions, cookieless solutions will still ultimately be the most valuable and sustainable way for publishers to drive revenue in the future.

“No one should take a false sense of security at this news,” said founder of consultancy Messer Media. “The only sure way to lose here is by retreating from your diversification plans.”

User privacy is still a big loser

The cookie had problems—it wasn’t the most accurate, it wasn’t particularly privacy safe, but it definitely helped advertisers buy scaled audiences across the open web. There’s value in that for some advertisers, even if it leads to opacity and bad practices.

The continuation of cookies in Chrome will enable that to continue. Anticipating this, U.K. data watchdog The Information Comissioner’s Office is “disappointed” with Google’s move, encouraging the industry to “not to resort to more opaque forms of tracking.”

Many companies are celebrating that they “can completely retarget and arbitrage, which is not really where our industry should be headed,” said Matt Prohaska, CEO and principal of Prohaska Consulting.

Lauren Johnson, Trishla Ostwal, Catherine Perloff and Lucinda Southern contributed to the reporting.