4 min read.Updated: 04 Mar 2021, 04:21 PM ISTThe Wall Street Journal
Companies that gather data on their customers will be in the best position to weather Google’s decision to rein in tracking, executives say
A move by Google to rein in tracking of web users drew mixed reviews in the ad world, with some executives expressing cautious optimism the change will be good for consumers and others worrying it will increase the tech giant’s industry stranglehold.
The Alphabet Inc. company announced Wednesday that its ad tools would no longer support individual tracking of users across websites starting in 2022. Taken with a similar announcement last year that Google plans to stop supporting a key tool for such tracking, called third-party cookies, the moves represent a major shift from the largest player in digital advertising, an industry where many companies rely on tracking and targeting users.
Advertisers use data harvested from people’s browsing across the web to figure out whom to serve an ad to, and whether that person then went on to buy the advertised product. After Google’s change, they won’t be able to get as detailed a picture of either.
“In a way, you are losing the ability to track and measure behavior as we have been accustomed to at this point," said George Popstefanov, chief executive of digital ad agency PMG. However, he supports the change, which he believes is better for consumers. “I think our ability to track and measure is going to change, but I don’t think it’s going to be worse," he said.
Scott Hagedorn, North America chief executive of Omnicom Media Group, a collection of media agencies, said the Google privacy change is part of an inexorable trend the company had long been preparing for. “We’ve been planning for it for 10 years," he said, describing the change as seismic.
In recent years, this preparation meant testing out ways to work directly with large tech platforms such as Google without being able to peek at any personally identifiable data. Google’s latest move will accelerate this kind of dynamic, Mr. Hagedorn said.
Others in the industry saw Google’s move as an anticompetitive power grab. “This is Google unilaterally trying to define the privacy standards for the internet," said John Nardone, CEO of Flashtalking, an ad server company. “It’s not appropriate."
Google is proposing its own technologies that it says will accomplish many of the same things advertisers were trying to achieve by tracking web users down to the individual level, but in a way that better respects consumers’ privacy.
These include tools that promise to group consumers into interest groups, or cohorts, on their devices, and never send their browsing information to a central server. Google has claimed that these tools have performed nearly as well as the existing tools—which track consumers individually—and is beginning to open them to testing by the industry.
Mr. Popstefanov of PMG said it is too soon to determine how well they really work. “Is it going to be as good as what we have? No. It’s too early to tell whether it’s going to give us the insight we need."
Advertisers will have to decide whether they are comfortable with the new Google approach to targeting ads, which will be less precise. “When you’re able to target precisely to individuals your effectiveness is very high," said Raja Rajamannar, chief marketing and communication officer at Mastercard. “When you’re doing it to cohorts it’s bound to be lesser than the individual, but we don’t know how much less at this point in time." He said it would take time to decipher the impact of Google’s plan.
Ad executives said companies that have a lot of first-party data—information they have gathered on their own customers, such as through apps or loyalty card programs—will be in a stronger position to carry out precise digital ad campaigns.
Companies that don’t have a lot of first-party data or whose business models are focused on new customer acquisition versus marketing to existing customers will face challenges, according to John Lee, chief strategy officer at digital marketing agency Merkle.
“You don’t have this crutch anymore," said Mr. Lee. “You’ve got to use first party data."
Because of the potential weakness of Google’s replacement, some advertising executives believed the move created an opening for other industry players who have been working on alternative technology to track users in a privacy-safe manner.
“I see this as a major declaration of opportunity for the rest of the ad ecosystem," said Paul Silver, global chief strategy officer at MiQ Digital, a company that helps agencies with their media buying.
Advertisers who want to target users individually across websites will be able to do so—just not with Google’s ad tools, Mr. Silver said.
The Trade Desk, a company that makes tools for advertisers, put forward a technology that would create identifiers for users based on their emails; the plan is currently being reviewed by the Partnership for Responsible Addressable Media, an advertising industry group.
PRAM has been seeking to work with Google to create privacy-safe identifiers that would work in Google’s Chrome browser after cookies are removed.
Although Google’s announcement on Wednesday seemed to take aim at these types of solutions, Google hasn’t yet weighed in on whether the solutions pursued by PRAM will work in Chrome when cookies go away next year. Google’s Chrome has a dominant share of the web browser market.
“We are disappointed that Google didn’t work more closely with the industry prior to announcing its plan," said Bill Tucker, executive director of the PRAM effort. “But we believe that this presents a critical opportunity for future collaboration."
Other agency executives agreed with Google’s assessment in a blog post announcing the change Wednesday that individualized user tracking isn’t likely to survive future regulatory action on privacy.
“Whether we like it or not, even if you can find ways to supply Band-Aids and keep going, legislation will kill those Band-Aids," said Simon Poulton, vice president of digital intelligence at WPromote.
This story has been published from a wire agency feed without modifications to the text.