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What Google’s Privacy Sandbox means for ad tech

By district m
January 27, 2020

Google Chrome has delivered the final blow to the third-party tracking cookie, or at least it will within the next two years. This is no time to panic—you will only drown faster that way. 

 Let’s take a look through some of the hoopla to draw some conclusions as to what Privacy Sandbox will mean for the industry and its many stakeholders. The actual impact of Privacy Sandbox is uncertain but there is plenty of speculation on both the buyer and seller sides of programmatic.

Will this give walled gardens an even greater advantage?

 Privacy Sandbox is positioned to set standards for all industry stakeholders to leverage a-privacy-by-design paradigm but could end up skewing the industry in Google’s favour. The company does have a history of making moves that structure ad tech to their own benefit.

 

In addition to this, in uncertain times, people tend to flock to incumbents that can bring results without creating additional concerns. For this reason, walled gardens that already manage privacy—by keeping their platforms exempt from personal data leakage—will set out to gain from the situation. 

 

While this initially challenges an open and independent internet, there is hope that Google’s approach of seeking outside input to build Privacy Sandbox as an open standard will help resolve these challenges. The currently proposed list of features sure does address a lot of the issues in interesting ways. 

 

Marketers are the most on-edge

Losing the third-party cookie changes the fundamental workflow of ad tech, but it doesn’t destroy the rationale behind addressability and measurement. For instance, with the proposed changes, marketers may lose the ability to target an individual but could still target a cohort of similar individuals. For years, marketers have been promised “the right person, at the right place, at the right time”, but that doesn’t have to be a specific person. Instead of targeting Steve, who wants to buy a Tesla, they can target some person or group interested in buying a new Tesla.  Frequency capping and attribution methods will also have to change but will not become impossible.

New opportunities for publishers

With third-party cookies becoming a thing of the past, the value of first-party data increases dramatically. This shift could bring new opportunities for publishers willing to invest in the right initiatives and integrate with the right technology partners.

Here are some approaches publishers could profit from if they start thinking about them early and often:

  • New solutions to focus on addressability rather than identity
  • Deployment of better real-time decisioning at the edge rather than in the supply chain
  • Building strong partnerships with equally innovative partners 

 

Opportunity for a new breed of ad tech

After a few decades of wild growth, the ad tech industry is maturing and embracing privacy as an essential component of its future. For innovators, these changes could prove incredibly beneficial. They are likely to create new targeting methods, attribution models, and whole new approaches by leveraging data and machine learning—paving the way to a new breed of ad tech.

What’s next?

At district m, we’ve always worked to bridge the realities of the industry with best-in-class tech and existing open standards—which we’re strong believers of. This new set of rules is no different and we’re optimistic about what these changes will bring to the table for both our publishers and advertising partners. This is why we’re going to keep an eye on all the developments around Privacy Sandbox and maintain an open mind to how it can suit our platforms.

In proceeding posts, we will take a deeper dive on the main propositions of Privacy Sandbox and give our take on how these could be leveraged to address some of the challenges ahead.

The good news is that we all have 2 years ahead of us to figure this out together. We’re excited to see how these years unfold.

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