Cookie Crumbles Again Part 2: Privacy Sandbox - Pandora’s Ad Box? User Control Unboxed

In the ongoing debate around online privacy, Google’s Privacy Sandbox stands as a proposed solution for a future where targeted advertising coexists with user control. But is it enough? Users will be demanding more transparency and control over their data, and the question lingers: Does the Privacy Sandbox offer a true path towards that goal, or is it a walled garden where control remains elusive? The second part of this series dives into the heart of the Privacy Sandbox, exploring its functionalities and mechanisms to determine if it empowers.

Also read:

Cookie Crumbles Again: A Sandbox for Innovation or a Walled Garden? - Part 1

Mathieu Roche, CEO and Co-Founder, ID5, says that Privacy Sandbox does not offer enough transparency, and this has been “one of the biggest complaints surrounding the initiative”. “Essentially, it is not the Privacy Sandbox, it's the Privacy Blackbox; Google decides what information is shared, undermining brands’ ability to access data they need to support crucial use cases such as measurement and attribution outside of the Sandbox fence. It’s another example of how cookie deprecation has become an opportunity for Google to tilt the playing field in its favour while hiding behind the guise of privacy conscientiousness,” says Roche.

The level of user control in the Privacy Sandbox is still being debated, says Russhabh R Thakkar, Founder and CEO, Frodoh World. “While users might be able to choose broad categories like "sports" or "travel" for ad targeting, the specifics of how that data is used remain unclear. This lack of transparency could leave users feeling uneasy about their privacy. However, some argue that any control over ad targeting is better than none, and the Sandbox could ultimately be a step towards a more user-centric online advertising experience,” he adds.

The Privacy Sandbox aims to strike a balance between user privacy and targeted advertising. However, there are concerns about how transparent and straightforward the process is for users when it comes to their data, observes Apurv Modi, Managing Director & Co-Founder, ATechnos Group.

“Even though Google says the data will be anonymized, they won't track individuals. But let's be honest; there will still be some level of data collection and user profiling going on behind the curtain. Users might not fully grasp how their data is being used or know how much control they have over it. On top of that, the Privacy Sandbox is an incredibly complex technical system from an outsider's perspective. Google needs to work on clear communication regarding data use so that users can truly understand how their data is used and make educated decisions about their privacy preferences,” says Modi.

Advertisers are starting to substitute the audience data with contextual data and attention metrics, says Laura Quigley, SVP APAC at Integral Ad Science (IAS).

“Rather than supporting all the data management and privacy regulations, many marketers will switch to advertising in contextually relevant environments and optimise for higher attention using that as a proxy for the audience. With governments worldwide limiting data collection practices, consumers still look to brands to ensure the relevancy and quality of digital ad experiences. Our case study observed that targeting contextually relevant content without third-party cookies has helped improve overall ROI, CPC, and CPA. OMG was able to achieve:

73% Improvement in CPC compared to the alternative targeting solution
74% Improvement in CPA compared to alternative targeting solution.”

Quigley is certain that the cookie phase-out will eventually happen and herald a more privacy-conscious and user-centric future in digital advertising.

Revenue streams of online publishers

For years, third-party cookies have been the bread and butter of online advertising, fueling the revenue streams of countless publishers. But with privacy concerns rising, new initiatives like Privacy Sandbox threaten to crumble this established system. What is the potential impact of the Privacy Sandbox on online publishers? Will it leave them with a shrunken bottom line, or can they adapt and find new ways to monetize their content in a privacy-focused future?

This revenue part is a huge concern, especially for smaller online publishers who rely heavily on that ad revenue to keep the lights on, points out Apurv Modi.

“Third-party cookies have been the backbone of the advertising economy for years now. They've allowed publishers to monetize their content by having targeted ads served to readers based on browsing history. The Privacy Sandbox proposes alternative solutions for targeted advertising, but it is still being determined whether these solutions will be as effective or lucrative for publishers. Suppose the Privacy Sandbox fails to deliver comparable levels of ad revenue. In that case, publishers may face significant financial challenges, potentially leading to a decline in the quality and variety of online content. And we can't forget about the transition period, too. As the entire industry attempts this shift from cookies to the Privacy Sandbox, publishers will inevitably suffer disruptions and temporary revenue losses until advertisers and tech vendors adapt to the new ecosystem. This could particularly impact smaller publishers who may need more resources or expertise to adapt quickly to the changing landscape,” Modi explains.

Cookies have been a key tool for publishers to serve highly relevant ads and secure good revenue, says Russhabh R Thakkar. “The Sandbox's privacy focus could disrupt this model, potentially leading to less targeted ads and a dip in ad income. However, there's also a sense of cautious optimism. The Sandbox is evolving, and who knows, it might even lead to innovative ways to target ads effectively while respecting user privacy. The coming months will likely see publishers adapt and explore alternative revenue streams to ensure their long-term financial health,” Thakkar concludes.

Mathieu Roche believes that the shift away from third-party cookies and towards the Privacy Sandbox can negatively impact the revenue streams of online publishers.

“Yes, it potentially could. However, since Google’s initial announcement we’ve seen publishers lead the charge when it comes to adopting third-party cookie alternatives. The most prepared publishers have taken the time out to test cookieless solutions, like the ID5 ID, in browsers like Safari and Firefox, to future-proof their strategies. We’ve even seen an uplift in Chrome. When testing ID5, a leading publisher monetization platform, Insticator measured a 17% uplift in fill rate in Chrome when compared to cookies.”

“The official narrative from Google is that there will be an option to re-enable cookies in case some websites just don't allow you to work without tracking. However, after the hurdles, advertisers will figure their way around what seems to be a momentous move by one of the biggest tech giants,” says Suchana Sarkar, CBO, Makani Creatives.