The new Google timeline for phasing out 3rd-party cookies -the first four months of 2025- is unrealistic as well. There are just too many issues that are still unresolved.
I’ve written before about the IAB Tech Lab stating that many functionalities the Privacy Sandbox is supposed to support don’t work. None of these items have been resolved as far as I know, and there generally seems to be a lack of communication between Google and the Tech Lab.
In testing the Sandbox with 1% of Chrome users, CPMs were 30% lower compared to cookie-based auctions. It is unclear by how much ad effectiveness in the Sandbox environment can be increased, and by how much that would lift CPMs again. But very likely, publishers will suffer at least a 20% CPM decline for unauthenticated traffic even after an improvement in ad effectiveness. Advertisers will be less willing to pay top dollars for less effective inventory and will give more business to Google, Amazon and Meta.
Latency is a huge issue as well because Sandbox auctions happen within the Chrome browser on the user side. This is great for privacy protection – the only problem is that users’ machines are not as powerful as is cloud computing, creating delays.
The only solution for this would be to run auctions server-side in what’s called a trusted execution environment (TEE). This would protect users’ privacy and take care of the latency issues. The fly in the soup is that Google currently only allows TEEs on Amazon’s AWS and on Google Cloud – which disadvantages smaller vendors who have their own TEE, such as @IndexExchange.
Currently, the industry is flying blind as to how auction dynamics will change in the Sandbox environment. The 1% Chrome test audience is big enough to test the Sandbox software – but too small to see how auction dynamics change downstream.
The UK’s Competition and Markets Authority (CMA) is concerned that the Sandbox potentially favors Google products over those of other vendors in auctions. This is a bit of a wildcard. If the CMA digs in its heels, it will be impossible for Google to roll out the Sandbox without making major competitive concessions.
All in all, nothing much will happen this year anymore in terms of practical outcomes. Third-party cookie deprecation will remain at 1% of Chrome users. Whether Google will manage to phase-out third-party cookies for all users in early 2025 is doubtful.
The biggest practical risk right now is that some players may feel a reduced sense of urgency for preparing for the twilight of the cookie. It will eventually happen, if not sooner, then later. Be ready.
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