🌯 IAB Report Reveals Privacy Sandbox Challenges, But Google Addresses Critics

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This Week
February 12, 2024
Should Google Postpone Cookie Deprecation...Again?
Disney Set To Launch ESPN Streaming Service
Publishers Still Lose Referrals With Google's Gemini
Google Antitrust Trial Set for September
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Is the cookiepocalypse over before its inception? Many critics spoke out against Google's Privacy Sandbox and the company's true motives for deprecating third-party cookies. Now, Chrome's cookie annihilation may be put on pause.

Google must address concerns that the UK's Competition and Markets Authority (CMA) first raised in 2021 before proceeding with third-party cookie deprecation. Failure to adequately resolve issues related to proposed Privacy Sandbox changes may postpone Chrome's third-party cookie deprecation, scheduled for the latter half of 2024.

If the CMA’s concerns lead Google to postpone deprecation, publishers may have additional time to explore third-party cookie alternatives. However, publishers should not assume a delay, as Google is working with the CMA and still has an opportunity to address these issues. Here are the CMA's concerns:

  • Google might retain access to user activity data while restricting competitors' access.
  • Google's control over including ad tech rivals could benefit its ad tech services.
  • Publishers and advertisers may struggle to detect fraudulent activity effectively.

Regarding the most recent CMA report, Google said, "We continue to move forward with our plans to phase out third-party cookies in H2 2024, subject to addressing any remaining competition concerns from the UK CMA. We are confident the industry can make the transition in 2024 based on all the tremendous progress we’ve seen from leading companies.”

In addition, the IAB Tech Lab released a report analyzing the Privacy Sandbox that revealed some significant challenges. According to IAB Tech Lab CEO Anthony Katsur, "Our findings highlight that the industry isn't ready yet and identify multiple challenges to implementation due to limitations in accomplishing key advertising objectives."

The report pinpointed several key issues, such as essential event-based metrics, brand safety concerns, on-browser computing complications, and a lack of consideration for commercial requirements.

Google responded to the IAB asserting they always welcome criticism from the industry, but that their reports include dozens of inaccuracies, fundamental errors, and instances of incomplete information. Furthermore, a Google spokesperson said, "While we’re disappointed that IAB Tech Lab released the report in this state, we’re encouraged by the many IAB members who are actively building solutions using the Privacy Sandbox APIs. And we look forward to partnering with the IAB Tech Lab in transitioning the industry toward more private solutions." 

The IAB Tech Lab has a 45-day open period for industry stakeholders to comment on the report, and they are taking notice. Katie Cladis, VP of Product, Digital Remedy, acknowledges that the report is concerning, but she does not believe this is the end of third-party cookie deprecation. This report is an effort to highlight the elements that Chrome must address before actual cookie deprecation.

"My biggest concern is the retooling that might be required for the ad rendering process and bidding capabilities - the heart of programmatic. The industry may require innovation if these issues aren't addressed," said Cladis. "However, there's still time to address these concerns and ensure an effective, transparent ad ecosystem that respects consumer privacy and advertisers' ability to reach and influence their consumers." – AB

An earlier version of this story included the headline, "The UK's Competition and Markets Authority Urges Chrome to Halt Cookie Deprecation Plans." This version also includes feedback from Google. We want to make it clear that the CMA did not direct Google to completely stop cookie deprecation. Google and the CMA are working together to address the concerns they first raised in 2021 to make sure their timeline is feasible. 

Coming Fall 2025: A Disney Standalone ESPN Streaming Service
Sports fans, the long-awaited standalone ESPN streaming service now has a launch date! Fall 2025 (or maybe sooner, as CEO Bob Iger told investors on a call). The service promises an immersive experience for sports fans, offering e-commerce and features like integrated betting and fantasy sports. The announcement came one day after Disney, Warners, and Fox announced a new sports streaming service that will combine coverage from other channels, including ESPN, FS1, ABC, Fox, TNT, and TBS.

Still, Disney wants its standalone ESPN service to be the preeminent digital sports band in TV, and it will offer access to multiple linear feeds of ESPN networks. Disney is reportedly seeking strategic partners, including potential discussions with the NFL regarding a possible equity stake in the service. According to Yahoo! Finance, Disney is seeking partnerships and is discussing an equity stake with the NFL. For sports fans, this is looking like a golden age of streaming in that they no longer need to subscribe to multiple services to watch, say, all of the NFL playoffs and no longer need to worry about missing important games because key games are aired on one service only. For streaming publishers seeking to build audiences, bundles are a subscriber-friendly way to do just that. – SS
Google Rebrands AI Service Bard, Publishers Still Lose Referral Traffic
The AI chat wars continue, with Google announcing a new and improved Bard, now called Gemini. (Note the warning that human reviewers process conversations.) Google is so convinced that Gemini is better than ChatGPT and other tools that it’s betting the farm on it. CEO Sundar Pichai told Wired that while the goal of Gemini isn’t to replace search per se, and if it does, so be it.

No doubt Gemini sounds great. Google hopes to see it act as an AI assistant that is conversational, multimodal, and more helpful than ever before.

The challenge for publishers remains the same: loss of referral traffic. Google’s current AI-powered search summarizes content, sparing the user the need to visit the publisher’s website and squandering that publisher’s chance to earn revenue on that traffic. And if Google charges for Gemini, should publishers get a cut of that revenue that feeds the summaries they see? It seems that technologists can add new features faster than they can resolve thorny copyright issues. – SS
Another Year Around the Sun, Another Google Antitrust Trial
A federal judge has scheduled the trial of the US government's significant lawsuit against Google's ad business for September. In court documents filed Monday in the US District Court for the Eastern District of Virginia, District Judge Leonie Brinkema set the trial to commence on Sept. 9.

This lawsuit directly challenges the core of Google's business, as advertising contributed approximately $66 billion to Alphabet's recent quarterly revenue of $86 billion. It marks the first antitrust suit by the Biden administration against a Big Tech firm.

The Department of Justice and several states allege that Google engaged in anti-competitive behavior by acquiring rivals through mergers and pressuring publishers and advertisers to use its ad tech. Google contends that the advertising technology market is competitive and vibrant, arguing that the government's case would stifle innovation and harm small businesses and publishers.

Walled-Gardens Who? The industry has been throwing stones at Big Tech's walled gardens for quite some time. Is it time for the walls to come tumbling down? In one of our 2024 predictions pieces, we already predicted that the EU's Digital Markets Act (DMA) would be coming for ad tech's "gatekeepers" who traditionally monopolize the ad space. Ad tech regulators from the US and the EU are chomping at Big Tech's heels. – AB
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