We're all invited to the sandbox if we play by Google's rules

On March 3, Google published its position on user-level identifiers, and some likened it to dropping a bomb on the ad-tech community. Google shared that it does not intend to directly use alternative authenticated user-level identifiers after deprecating third-party cookies. And it considers such identifiers non-viable from a privacy perspective.

At first glance, this is good news for consumer privacy. Due to privacy considerations, Google will limit its products to cohort models that group similar individuals together based on browsing behavior within its Privacy Sandbox. (Though some privacy experts feel that Google’s solution is as bad for privacy as the status quo.)

On the flip side, Google seems to be saying that it’s okay for the company to leverage Google-owned user-level identifiers, such as an email-based YouTube login or a Google first-party cookie. But alternative user-level identifiers owned by others, such as an email-based login on a publisher site, are persona non grata on Google’s product stack. This position undercuts the revenue streams of independent publishers and competing ad-tech companies that make up the open web in favor of the walled gardens, including Google.

Most marketers aren’t happy about this industry shift. Research shows that 70% of marketers say digital advertising is headed in the wrong direction, and 63% say they’re disappointed and frustrated by Google and Apple’s moves. At the time of the original announcement back in January 2020, Forrester analyst Joanna O’Connell summed up the industry’s overall reaction by saying, “I don’t think I anticipated that they would do something that feels so obviously beneficial to Google.”

These changes are coming in the name of privacy for consumers, but they also strategically support Google’s ad business, providing Google with all the data insight that the rest of the industry will lack. Are the privacy standards different when an individual logs into YouTube vs. The New York Times? Google is creating a new and smaller “sandbox” for the rest of the internet and setting the rules for anyone who wants to play in it.

A sandbox controlled by one

When an organization like Google has control of so many interdependent steps in the supply chain, there are inherent risks. Not only did Google build its own sandbox, but the company also monitors the whole playground: Google builds the infrastructure, performs the upkeep and determines who is allowed in and out.

For independent publishers and ad-tech companies, this means they’re allowed into the sandbox—but only on the periphery. In the end, it’s the consumer who will suffer. If independent publishers can only sell in the sandbox, many will go out of business and online innovation will slow to a crawl. The overall online experience and marketing impact will deteriorate in the name of improved privacy—which is unlikely to improve.

This also consolidates more power within the walled gardens—Google particularly—where performance transparency continues to be an issue. Marketers need the ability to draw a clear line from their marketing investments to tangible business results. And it is unlikely that Google’s Federated Learning of Cohorts (FLoCs) will deliver the kind of justification that a marketing professional wants to present to their CFO. It amounts to picking audiences based on recent browsing behavior, but where you surf does not typically suggest how interested you are in buying toothpaste. 

The marketing industry has allowed a few players to have an outsized importance in the larger ecosystem, and Google’s latest update further exacerbates the resulting problems. Brands need to take back control by rebalancing their messaging strategies across walled gardens, open-web partners and owned brand interactions.

A reliable cookieless strategy

Google’s announcement only reinforces the need for brands to build first-party relationships with consumers. As Forrester noted in its blog post responding to the news, Google “wants to burnish its reputation as privacy-friendly in the face of much competition from other browsers …” and “… also ‘owns’ millions of direct consumer relationships (read: first-party data, much of it authenticated), which it can continue to benefit from within its own massive ecosystem, à la a classic walled garden.”

While Google’s announcement has left many reeling, its update has little impact for the brands Epsilon works with:

  • Brands buying media outside the Google stack will continue to reach and engage people-based audiences with personalized messaging and performance transparency. 
  • Brands buying media on Google DV360, or any DSP, will still be able to buy against private marketplace (PMP) deals that are established between clients and SSPs (e.g., Pubmatic, Magnite etc.). So, we’ll continue to activate Epsilon PeopleCloud audiences on behalf of our clients via publisher authentication and PMP deals.
  • When Google is in the role of publisher (e.g., YouTube), Epsilon or its clients can push first-party data for activation on these properties.

At Epsilon, we always knew that it would be critical not to focus on any single online identifier, such as third-party cookies or email addresses, to deliver for our clients both now and in the future. Instead, our people-based CORE ID is anchored on deterministic data elements, making it highly reliable and stable. The data is pseudonymized before it enters the digital ecosystem, keeping consumers’ information properly safeguarded and aligned with evolving regulations. It also allows our identity solution to connect with any online identifiers that currently exist or may evolve in the future.

First-party data and privacy are two principles that have always been at the heart of the work we do. But we, along with our partners, also believe in the spirit of the open web. Our cookieless strategy is designed with privacy in mind to evolve with ever-changing regulations and adheres to opt-out and consent best practices as applicable. When an individual opts out of personalized messaging, we don’t just opt out the email or cookie they are using at that moment, we opt out the individual on every identifier within CORE ID. This is an improvement over most solutions that force consumers to opt out one identifier at a time.

Ultimately, Epsilon shares Google’s perspective on the vital importance of consumer privacy and building first-party relationships. But we are committed to achieving those goals through transparent, large-scale, open-web solutions that meet our clients’ needs—unlike limited sandboxes and walled gardens.

This article was originally published on Adweek, March 2021.