Google’s Opt-In Proposal Still Kills Off 3rd-Party Cookies
Anytime I am struggling for an idea, I ask my partner what I should write and she almost always says, “I don’t know, first party data?” It has become a bit of a trope at AMO that we love to write about cookies… and well, here we are again.
But first… don’t forget to register for tomorrow’s webinar all about outsourcing. It’s going to be a great discussion. If you can’t make it, register anyway and I will send the recording after the event.
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Opt-in is probably default opt-out
It was the story that kept on giving. Google was going to deprecate the 3rd-party cookie in Chrome, taking away one of the key means of targeting people on the internet. The goal was to accomplish this in 2022. Then late 2023. Then later this year. And finally, the goal was 2025.
On Monday, Google basically said nevermind. According to an official blog post:
In light of this, we are proposing an updated approach that elevates user choice. Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators, and will engage with the industry as we roll this out.
At the same time that Google is putting a hold on deprecating cookies, it also announced the results of tests on its Privacy Sandbox APIs. This is Google’s proposed initiative that would allow websites to access user information in a privacy-friendly way. According to the results (all without 3rd-party cookies enabled):
- Scale preservation: For advertiser spend—a proxy for scale—we saw an 89% recovery in Google Display Ads and an 86% recovery in Display & Video 360.
- Return on investment (ROI): For campaigns focused on conversions only, we saw a 97% recovery in conversions per dollar (CPD)—a proxy for ROI—in Google Display Ads, and a 95% CPD recovery in Display & Video 360.
- Remarketing recovery: Across campaigns using only remarketing audiences, our experiment showed a 55% advertiser spend recovery in Google Ads and 49% in Display & Video 360.
In a nutshell, Google is saying that the Privacy Sandbox is almost as good as 3rd-party cookies. A few weeks ago, ad-tech vendor Criteo wrote:
Criteo’s first key finding is that if third-party cookies were deprecated today and the Privacy Sandbox released in its current state, we expect publisher revenues to decrease by an average of 60% for those that have fully integrated the Privacy Sandbox. Publisher adoption overall remains below 55%.
Second, the current version of the Privacy Sandbox also creates an advantage for Google’s advertising business. Our testing showed that Google Ad Manager (GAM) captured the majority of spend in the treatment population, an increase in market share of 360%: from 23% to 83%. This demonstrates a significant increase in publisher reliance on Google for ad revenue.
What we’re left with here is a ton of uncertainty about what technology is coming. Is it going to be the privacy sandbox? Will it be cookies? Is something else coming? It’s hard to say and for most publishers, trying to figure it out is a waste of energy. Here’s what will happen. Vendors will play around with various techs. They’ll then make a bunch of lofty promises. Those promises will not be true. Publishers will get burned.
But there are a couple of things I advise.
First, do not take Google’s announcement yesterday as an automatic return to the status quo. Many publishers have been concerned about cookie deprecation and might be breathing a sigh of relief that Google isn’t getting rid of cookies after all. That sigh is premature. Reading between the lines, Google intends on giving users the choice of opting out of cookies. And when given the choice, will they choose anything but opting out?
The numbers are mixed. If we use Apple’s App Tracking Transparency (ATT) rollout back in 2021 as a barometer, things looked dire. Every app would need to get permission to track them and, as you can imagine, most opted out. That has evolved as time has gone on. According to AppsFlyer, “on a global scale, 50% of users of apps now opt-in to tracking.”
This is obviously on a case-by-case basis since you’ve got to explicitly opt-in. What happens when cookies are gone for half of the audience? What if it takes years to reach 50% opt-in? Many of these are unanswerable questions because we simply do not know what Google’s implementation will look like.
Second, publishers should not simply wait to see what Google comes up with. That’s not a good strategy. Instead, take ownership over your own data. When we talk about the deprecation of cookies, we are almost never talking about 1st-party cookies. And so, we should all focus on capturing direct data about our audiences.
Even if Google delivers a “cookie-friendly” approach to users opting in or out, there is nothing more powerful than having your own audience data. This will help inform your direct deals and make you less reliant on ad-tech vendors to power your business. It can seem daunting to get this data, but even having basic contextual data is a big step up for most publishers. Layer in anything you know about the audience—even their geography—and it could introduce good monetization potential.
Since launching AMO, the talk about cookies going away has been front and center. And as with anything that happens in our industry—cookie deprecation, platforms cutting back on traffic, the rise of AI, etc—the most important advice I can give is to focus on what you can control. Understanding your audience and preparing for a world where the vendors and platforms are not helping you is the only thing you can do. You can’t control them. Don’t try.
Microtransactions again?
Every year or two, someone brings up the idea of letting people pay for content on an article-by-article basis rather than relying exclusively on subscriptions. The argument is, “some people don’t want a subscription, but would absolutely pay to read one article and that payment would generate more revenue than any advertising ever would.”
Then people try it, it doesn’t work, and microtransactions go back into hibernation. Well, the bear has crawled out of its cave and we’ve got a new microtransaction attempt that’ll totally work this time. This time, it’s Toronto Star in partnership with Axate. According to News Media Canada:
“We are the first in the country to try this – and we’re doing it because readers have said they want and are willing to pay for our stories, but they need flexibility,” said Torstar CRO, Brandon Grosvenor.
…
Publishers can set their own rates and parameters on the Axate platform. The Star is launching with a simple pricing structure, where readers can purchase a single article for $0.75 and a daily max-spend of $1.50 will give the user access to the full site for the day. The Star team will also leverage the flexibility of Axate to trigger premium rates for select content like exclusives.
Axate has built a wallet that allows users to fund once and then move around to various Axate-powered sites. Theoretically, if Axate can get on enough sites, it can become something users get comfortable with using because they’ll only have to fund one wallet at a time. Whether that part will work remains to be seen.
The broader question is whether people will actually pay. Readers may be saying they want it, but I suspect when push comes to shove, they won’t. The answer to that is typically, “but they pay for video games.” Good point. But it’s not actually the same. Gabe Duverge of Touro University Worldwide explains why:
The concept of impulse buying may not sound foreign. Free-to-play games truly capitalize on the psychology behind impulse buying. Many of the games place a time limit on opportunities to buy, forcing players to make a decision quickly. Games also use tactics to make players unhappy and suggest that impulse buys can make them happy.
…
Many games use loss aversion to encourage spending. The idea behind loss aversion is that players would rather enjoy the satisfaction of winning rather than losing. This goes a long way toward leading players to impulse buying. The crux of a player’s decision to pull the trigger on a micropayment centers on not wanting to lose the game. The belief that players can continue to win with the item they acquired drives them to pay.
That doesn’t exist in the world of news. If it’s $0.75 for an article, what sort of loss aversion exists? What happens if I don’t read the article? That means, the reader has to decide if it’s worth paying for and that’s a ton of psychological friction. Is the article really worth $0.75? What about $0.50? Will readers start to feel resource scarce because they’re going through articles too quickly?
I’d love to be proven wrong because it would introduce a new business model; however, I’m not optimistic. It’s been tried so many times and has failed at every turn. But hey, maybe it’ll work this time.
I am intrigued by the notion of a time-based offering. Paying $1.50 for access to the entire site for a full day does seem compelling. You’re no longer needing to value an individual piece of content, but instead, you’re assessing the value of the entire ecosystem. And it’s not exactly a foreign concept in media considering newspapers and magazines sell individual issues.
This could be particularly impactful on big news days. For example, I would be shocked if a ton of people wouldn’t pay $1.50 for access to The New York Times on Sunday when President Joe Biden announced that he would not run for re-election. It may not be an everyday purchase, but when news is huge? I could see it moving the needle.
The real value here could be, as Toolkits founder Jack Marshall tweeted, as a decoy.
Yeah agreed. So again – depends what we mean by “works”. Depending on pricing I could see it having some impact as a decoy offer to help drive sub uptake. Even just highlighting unit economics could be interesting from a marketing standpoint.
You can give users the option to pay $0.75 for an article or $1.50 for a day in the same screen that you’re showing them that a 30-day subscription is only $10 (approximate amount for Toronto Star if you pay annually). Putting that side by side might convince some readers to fork over the full subscription fee simply because they see how much cheaper it is than racking up a bunch of single day passes.
The major disadvantage of using a tool like Axate is that the Toronto Star does not have the user’s credit card information. So, if a user is paying $0.75 per article and then decides to upgrade to a subscription, unless Axate is used to power those subscriptions, the user will need to input their credit card information again. That’s friction. But that’s the trade-off of using a 3rd-party wallet that aims to build network effects by being available on other publications as well.
Nevertheless, you’ll get email addresses of people that are paying and that can be good marketing to try and get them to pay again.
Do I think all of this works? No, not really. But I’d be happy if my mind was changed with concrete data. I just don’t see this overcoming the psychology of it.
Thanks for reading today’s AMO. A few things:
- I emailed you all yesterday, but be sure to buy your tickets to the AMO Summit today so you can hear from Nick Thompson, CEO of The Atlantic, plus many more speakers.
- Register for tomorrow’s webinar all about outsourcing. It’s a must for CEOs and media operators.
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Have a great week!
