Six months after launching the process of phasing out third-party cookies in Google Chrome, one thing is clear: in its current implementation, this will lead to a financial collapse for publishers and an increase in Google’s advertising dominance. The evidence continues to mount.

Adtech company leaders may be tempted to give up. However, many continue to fight. They have invested too much time, money, and effort into developing alternative solutions to Google’s advertising technologies. Moreover, Google, at least seemingly, is making a small step forward.

Here’s the proof: Google hired an experienced adtech specialist to help organize partnerships around its Privacy Sandbox (PS) in the same month it delayed the phase-out of cookies for the third time in four years. Additionally, Google is working with the industry to establish clearer timelines for the gradual phase-out of cookies. Finally, adtech executives can now talk to Google engineers about all things related to PS.

“We organized a two-day workshop with Google engineers and continue collaborating to create a roadmap that considers the interests of all parties,” said Todd Parsons, Chief Product Officer at Criteo.

Today, even small adtech companies are receiving help from Google.

“In recent weeks, they [Google] have been actively engaging with clients,” notes Mark McIcran, Vice President of Product at Yieldmo. “I even spoke with three or four of them at the TechLab summit two weeks ago.”

It’s not just that Google has become more active in communication: several adtech executives report that the PS team now responds to emails in days instead of weeks.

As encouraging as this sounds, no one in the advertising industry is rushing to celebrate yet. Everyone understands that these actions guarantee nothing. A difficult path lies ahead to make the solution work for themselves, Google, and regulators. However, they now have more grounds to claim: the Privacy Sandbox in its current form is simply not suitable.

The most significant confirmation comes from Criteo, a key Google adtech partner stuck in the process of implementing alternatives to third-party cookies.

After eight weeks of testing from March 18 to May 12, Criteo concluded that PS would do more harm than good. Publishers will lose 60% of their advertising revenue, and worse, Google will gain this revenue. As a result, Google’s market share will surge from 24% to an impressive 83%.

In the end, PS will make publishers and the entire industry more dependent on Google than ever before.

This is if PS works correctly. Criteo’s tests also showed that PS will slow down publishers’ websites by more than 100%, leading to a drop in ad impressions, loss of revenue, and deteriorating user experience.

It’s no surprise that publishers view PS as a complicated platform for everyone except Google. According to Criteo, PS usage is less than 55%, and it is unlikely to change soon. They need effective solutions, not additional challenges.

“We decided not to test PS at this stage,” said one publisher. “Most of our traffic comes from Safari, and the tools in Google Ads Manager are insufficient for comprehensive testing. So we consider testing a waste of time.”

These sentiments have intensified over the past six months, especially in the last three months as PS began a new phase of testing.

Look at Criteo’s tests. They covered nearly 18,000 advertisers and 1,200 publishers, gathering over 100 million ad impressions per week. That’s too large a sample to ignore. It becomes even more compelling when compared to the analysis from IAB Tech Lab.

IABTL stated that in its current form, PS could limit the industry’s ability to provide relevant and effective advertising, putting small media companies and brands at a disadvantage. Stringent requirements could restrict their ability to compete, ultimately affecting industry growth.

“When IABTL presented its report, Google tried to refute it, claiming the report contained ‘many misunderstandings and inaccuracies,’” said James Rosewell, founder of the Movement for an Open Web (MOW), a coalition of anonymous companies and industry participants. “Four months later, after a reassessment conducted by Tech Lab jointly with Google, the conclusions have hardly changed.”

Audigent’s management also feels frustrated. The adtech company developed Component Buyer—a demand-side platform equivalent in PS—to implement Google’s concept of cookieless advertising. However, they faced obstacles.

“Nothing is clear,” said Drew Stein, founder and CEO of Audigent.

This is a significant statement from a company that spent nine months, millions of dollars, and a lot of effort to secure its clients’ purchases in Google Chrome.

“During testing, we identified significant flaws in PS,” Stein notes. “Even in PAAPI, one of the most promising PS components, the issues are too significant for industry scaling. Google has yet to announce necessary changes for PS implementation and has not provided timelines for industry interaction on these matters.”

But to say faith in PS is lost is incorrect. Rather, it shows why PS cannot exist in its current form. There are serious flaws in its design, and the premises raise questions, but these problems can be resolved if Google takes action. The industry has already suggested enough ways Google can fix the situation.

These recommendations fall into four categories:

• Performance: improving machine learning performance to increase spending in the Open Internet and boost CPMs for publishers.
• Audience: collecting more detailed audience information to increase its value and publishers’ revenue.
• Functionality: providing tools for transparency, fraud prevention, and sustainable competitiveness.
• Management: enhancing decision-making processes, accountability, and efficiency to boost publishers’ performance.

In other words, the industry has a plan to fix PS—if Google is willing to listen.

“The results of our test and subsequent recommendations do not mean that PS doesn’t work,” says Parsons of Criteo. “PS is an evolving product that needs improvements and changes to achieve its goals. It’s simple.”

Experts at MiQ agree with their colleagues at Criteo. Their current tests of the API Attribution Reporting (ARA) in PS Google Chrome show mixed results: there are promising achievements but also significant concerns.

According to MiQ’s chief strategist John Goulding, who monitors the performance of several clients participating in the testing, contrary to popular belief, this part of PS solves the problem of privacy-aware optimization. In his observations, the API is as effective as mechanisms based on third-party cookies, which is a positive result compared to typical match rates when using primary data. However, the attribution API does not provide a full set of data for measurement, as data is lost between conversion events and report generation, and it is present in only 25% of all ad impressions.

This means that advertisers will need to analyze data to understand ROI accurately.

Additionally, the attribution API changes campaign optimization approaches as it requires decisions on reporting to be made in advance. Advertisers and agencies will need to balance speed, accuracy, and detail in settings.

Despite these issues, the attribution API is not hopeless, according to MiQ.

This is the essence of the story around PS and, consequently, the phase-out of third-party cookies in Chrome. It oscillates between extremes, whereas it needs nuance. Sure, it’s not an ideal scenario, but it’s far from a disaster. Remember the 60% drop in publishers’ revenue noted by Criteo? That can happen only in a world where there is no alternative to third-party cookies or PS.

Fortunately for publishers, such a world does not exist. There are many alternatives—probabilistic, authenticated, and contextual—that aim to prove they can make ad inventory addressable, measurable, and, importantly, maintain CPMs.

Other materials on this topic:

• Apple’s Web Eraser is going to be a big problem for publishers
• Programmatic—key revenue for publishers in 2024
• Skepticism around the Privacy Sandbox
• The Google cookie saga: theories, opinions, and revelations
• Advertisers waste too much money on alternative audience identifiers
• Advanced Matching: how to adapt to a cookieless world
• Criteo prepares for cookieless and lays off 140 employees