Many were left underwhelmed after this month’s Google I/O conference, which featured no notable hardware announcements and only a brush over ads. But we should consider the lackluster presentation to be a calm before the storm, because there are massive changes coming to the ad sphere.
Google has always been a proponent of privacy and giving the consumer ad choices—no surprises there, with AdChoices and now Google My Ad Center. Given that 80% of the tech giant’s revenue is driven by advertising while it continues to monetize its Moonshot businesses, what is the end objective of letting users remove advertising preferences? Couldn’t doing so cause an “iOS 14.5” moment where 96% of American users chose to opt out of Facebook app tracking?
The Ad World Is Turning Upside Down. Are Marketers Ready?
If cookieless is Google’s mandated way of consumer privacy, then My Ad Center is the user-controlled way of limiting what data is being shared with third-party data aggregators, publishers, and platforms. My Ad Center allows users to limit their search, video, and digital consumer life from leaving key identifiable information such as search results and browsing history. Most important, it warns users when email, phone number, or home address (or all addresses) are being tracked by websites, a regular occurrence given that this information is the backbone of third-party audience segmentation and first-party data refinement.
Marketers should be very worried. Imagine a world where 96% of users opt out of providing their key identifiable advertising information to third-party data providers. How would we know that our audience segmentation is accurate? How do we attribute performance tracking on all platforms?
This has ramifications when it comes to every paid advertising campaign, where precision targeting is key to getting digital and mobile users’ attention. Furthermore, this means that with the difficulty of converting users due to tougher targeting parameters, ROIs will go down and costs to advertise such as CPMs, CPCs, and others will see a drastic uptick. This is no different than what we are seeing now on Meta, where some advertiser categories are reporting CPM increases of 86% as it becomes “harder” for advertisers to convert users. The only option left is to increase advertising spend, creating competition for the same user, thus driving ad prices.
How Advertisers Can Prepare for Google’s Upcoming Changes
Marketers and advertising agencies should already have data science built in rather than relying on a data science team. Advertisers need to start understanding how to refine, onboard, and combine third- and first-party data sources to create custom audiences and push them onto advertising platforms while cookies are still here.
There’s also the other alternative, which Google would prefer: Switch your advertising to DV360 and the GoogleAds platform, where you can still leverage activities and histories of Google users to target them both on- and off-platform. While My Ad Center will be limiting third-party publisher sites from getting access to your history and upcoming cookieless will eliminate the “back door” of continuing to collect that information, Google DV360 and GoogleAds will still allow you to precision target Google users, which at last count was far larger than any user base in the world at 4.3 billion.
Advertisers can also consider ramping up their programmatic, data onboarding, data warehousing, and data clean room infrastructure. Processing and handling PII in a world of tightening privacy laws is the equivalent of peanut-allergic employees working at a peanut processing facility.
Can My Ad Center’s cookieless future be an opportunity rather than a hindrance? As long as data compliant data clean rooms such as Snowflake or data onboarding platforms such as Semcasting or LiveRamp, combined with a programmatic agency or team that works ubiquitously on platforms like the Trade Desk or DV360 and internal data handbooks, are put in place with proper training.
Better put on that data clean room suit.
Humphrey Ho is a managing partner at Hylink Digital U.S.