The current ecosystem of programmatic advertising is unsustainable, according to the APAC MD of multinational adtech Index Exchange, who has welcomed Google’s decision earlier this month to phase out third party cookies.

Adele Wieser, Index Exchange’s regional managing director APAC says privacy was the catalyst for Google’s decision to effectively kill off the online tracking tool, with consumers increasingly curious about their “digital footprint” and what they trade away for services online. Regulators around the world have also sharpened their attention to data collection with strict new regulations in the EU, US, and changes in Australia on the horizon.

“The current programmatic ecosystem is unsustainable and the announcement from Google shows that there is a conscious effort to build a more trusted and sustainable web environment,” Wieser told Which-50.

“The two year timeline provides the industry with an opportunity to build a solution that is focused around consumer trust and privacy.”

Adele Wieser, Index Exchange’s regional managing director APAC. Supplied.

Adtechs, the middlemen connecting publishers’ online inventory with brands and advertisers, have traditionally had a tense relationship with consumer privacy because they often rely on detailed consumer profiles to sell more lucrative targeted advertising. To construct–and then sell–those audiences adtechs need to collect information on consumers and their online habits. 

Third party cookies allowed some to collect that information covertly, a practice many in the industry knew was untenable, Wieser says.

“While the adtech community has discussed the demise of the third party cookies for some time, there is now a defined timeline. It’s important to note that third party cookies were not effective to begin with and the biggest change is the ability to track users across domains.”

But for publishers and platforms to offer content and services for “free” online, targeted or personalised advertising is a prerequisite, industry advocates argue, and something to replace third party cookies is needed within two years, according to Google’s own timeline.

The tech giant says it will work with stakeholders through its “Privacy Sandbox” to develop an alternative.

What now?

According to Tim Whitfield, director, Rex White Consulting, and a local adtech veteran, Google’s announcement means large performance-based brands which rely on cost per acquisition (CPA) should be checking that their providers are working within Google Privacy Sandbox.

“If they’re not then suddenly you could find a very big negative adjustment to your CPAs as they may not work,” Whitfield told Which-50.

For those in the industry working across platforms and domains rather than within a single one environment like Facebook, for example, Whitfield says the risk is higher.

“If you’re … a [Data Management Platform] or a [Demand Side Platform] and you’ve got a ton of data and it’s cookie-based data then you may seriously be affected by this moving forwards.”

Weiser says any solution to replace the data provided by third party cookies must be “people based” and “rooted in consent and consumer trust”, and adtechs should be able to adapt.

“The industry will need to invest in solutions that prioritise consumer trust first in order to consent,” she says. “We are confident moving forward that the two-year timeline is going to allow us as an entire ecosystem to work closely to build identity-based solutions that work for everyone in the industry.” 

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