Google’s Privacy Sandbox leaves ad tech in limbo

With the clock ticking on a promised rollout, Google has yet to deliver a critical update to Privacy Sandbox—its overhaul of digital ad targeting—leaving ad tech players in the dark. As the long-delayed project drags on, industry leaders told Ad Age they expect to hear from Google soon, even as the company faces mounting distractions, including a looming antitrust trial. The inconsistent signals from the tech giant have only added to the confusion surrounding the controversial initiative. Eyes are returning to Google in anticipation of its next move, which could come as early as Possible, the ad conference in Miami later this month, according to advertising leaders familiar with the project. Google is expected to debrief partners on how it will launch the tracking message in Chrome and what the message could say. Google declined to comment for this story. “The elephant in the room is still Privacy Sandbox, and what will or won’t move forward there,” said a top executive at a demand-side platform who spoke on condition of anonymity and has worked closely with Google on Privacy Sandbox. Since 2019, Google has been working on the Privacy Sandbox concept, which started as a plan to kill third-party cookies, the internet trackers, on Chrome browsers, which will also come to Android. The proposal has been refined and delayed multiple times. Last year, Google retreated from the idea of deprecating cookies entirely, and instead said it would give users the option to accept tracking or not. Google’s reversal cast doubt over Privacy Sandbox and the investments ad tech partners made to prep for it. Yet, the planned overhaul could have major ramifications for programmatic advertising, as Chrome accounts for 60%-plus of global browser market share, and this could ultimately be the key to reaching internet users there and on Android. Ad Age’s guide to Google’s cookie decision Google still faces challenges with its ad tech aspirations, including regulatory red tape in the U.K., which was one of the main reasons the whole project hit a wall last year. Google’s attention is divided, too, especially with the next phase of its search monopoly trial resuming Monday. Despite delays, Google has made some progress, swapping outdated mechanisms for newer ideas. Here’s where the digital ad overhaul currently stands. What do ad tech companies and advertisers want from Google? Ad tech platforms, as well as the publishers and advertisers they work with, want to know when Google’s tracking prompt is launching and if Privacy Sandbox will even be ready before then. Much depends on the prompt: The wording of the message and how it’s presented to users could determine whether they jump into Privacy Sandbox en masse or hit “decline.” In January, Google gave partners a vague update at IAB’s Annual Leadership Meeting, saying Chrome was leaning toward offering a universal-style opt-in message—meaning the prompt would cover all websites as a one-time choice, not be a piecemeal message on every website. However, Google has not announced how that universal message will read. Either 90% of consumers could opt out or 20% could, depending on the formulation of that message, said Paul Bannister, chief strategy officer at publishing platform Raptive. “People who keep cookies will have Sandbox, also,” Bannister said. “So for those people, it’s sort of an extra [signal for advertisers], which is nice.” “For people who have opted out of cookies, Sandbox is the main thing,” Bannister added. “Either way, it’s a piece of your advertising strategy.” Raptive, which is a platform for thousands of websites to monetize their traffic, pulled back development in Privacy Sandbox, but will ramp up when there is more clarity from Google, Bannister said. “We’ll definitely be plugging in in smart ways and trying to figure out ways we can use the Sandbox creatively,” Bannister said. In the meantime, publishers and advertisers have already set up new mechanisms outside Google to manage post-cookie ads, including using new forms of advertising IDs that don’t rely on cookies, and contextual advertising that matches ads to content, not to personalized profiles of the user. Last month, IAB Tech Lab, which was previously critical of Privacy Sandbox, announced it was developing open-source tools to help publishers manage ad auctions in a post-cookie world. The effort, however, is still in its early stages. Is Google’s new ad tech platform ready for cookie-free advertising? One big concern for Privacy Sandbox players is the timing of Google’s plan. Google said that the cookie dial would turn down on Chrome this year, but ad tech platforms are still testing Privacy Sandbox, and some are concerned it won’t be ready, ad execs told Ad Age. Google could start restricting cookies, but the new ad tech auctions could still be missing important functions. Tests are ongoing; for instance, demand-side platform NextRoll and data tech platform Audigent released a case study regarding one application called Protected Audience API, or application programming interface. Privacy Sandbox is based on APIs that allow the tech platforms to plug into the browser to run ad auctions without leaking data and then to measure the campaigns. “Audigent took the initiative to build a basic, in-house bidding infrastructure, establishing a proof of concept,” Audigent stated in its analysis. “They successfully activated over 1,100 interest groups across more than 1.5 billion Chrome browsers.” Still, ad tech partners are running into limitations that would be good to iron out before the cookie change, according to Andrew Pascoe, VP of data science engineering at NextRoll. “We still think that giving users the choice means that the bulk of users will pick to turn off third-party cookies,” Pascoe told Ad Age, adding that “there’s plenty of work to do on Privacy Sandbox.” The basic concept of Privacy Sandbox is that the internet ad auctions run inside the browser on people’s devices—that way, no personal data is transmitted. The process also blinds the buyers and sellers, which use APIs to recreate the benefits cookies used to provide, such as targeting and measurement. One problem with on-device auctions in the browser is that they can slow down the web. Also, supply-side platforms can’t “shape traffic,” which is when they only offer bidding opportunities to buyers that would most likely be interested in an ad slot. Since the system is so private, the supply-side has no way to tell which buyers are interested, so they wind up sending all the impressions to cast the widest net, according to Pascoe. All that incoming traffic overwhelms the buy-side. Google has developed an alternative called “bidding and auction services,” which takes the auction process into secure servers known as “trusted execution environments.” Google and Amazon’s cloud services are so far the only two trusted execution environments. The idea is sound, Pascoe said, offering more ways to play with data securely and improve programmatic advertising, but it still hasn’t been tested widely across the industry. Some critics have also protested that Google has only allowed a limited number of trusted execution partners, one of them being its own cloud. Another design quirk is that Google is still working on different creative formats, not all of which are ready. For instance, serving video ads is still an issue, according to ad leaders. How are Google’s ad tech plans affected by the antitrust case and regulators? In August, Google was found to run a monopoly in the consumer search market and in text-based advertising within search. On Monday, the remedy phase of that case is set to start, and the U.S. Department of Justice is calling for Google to divest from Chrome. The DOJ claimed that 30% of search activity comes from Chrome browsers, making Google’s ownership of the browser a conflict. Google could appeal the monopoly case all the way to the U.S. Supreme Court, so it could drag on. Last month, some pressure was pulled off Google as the government backed down from a demand calling for the tech giant to unwind any AI startup investments. AI is a crucial component to search and ad tech. Also, the government is not asking Google to divest from Android, the other platform that will also have Privacy Sandbox. The DOJ said it would keep an eye on Android though, leaving the door open that it could request that Google disentangle itself from the mobile software ecosystem. In the EU and U.K., Google is getting mixed messages. Last month, France’s antitrust enforcers hit Apple with a $162 million fine over its App Tracking Transparency policy. That case raised some of the same issues Google has faced with U.K. regulators over Privacy Sandbox. The countries claim Google, and now Apple, harm businesses that rely on the internet for commerce when they hoard consumer data on their platforms and don’t share. The privacy-versus-competition dilemma is tough for Google to navigate. On one end, the U.K.’s Competition and Markets Authority is scrutinizing Privacy Sandbox’s effects on business, while the U.K.’s Information Commissioner’s Office is pressuring it on the privacy front. Google is in negotiations with U.K. regulators to gain approval for its cookie plans, while also fine-tuning the overall design of its ad system. A person close to the Google Privacy Sandbox team, who spoke on condition of anonymity, said that they are still eager to release the cookie message. “Google seems eager to get to the point where user choice is out there,” this person said. Data-Driven Marketing Playbook—everything to know about the May 22 event

Google’s Privacy Sandbox leaves ad tech in limbo

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