Google Chrome’s announcement that it would significantly alter its previous plan for depreciating support for third-party cookies, the very lifeblood of online advertising, upended the narrative of the ad tech sector in the last three weeks.
Amid the subsequent handwringing and efforts to maintain calm came the latest bout of earnings disclosures, the sector’s leading lights when executives attempted to amplify messages of assurance to Wall Street.
In summary, there’s been a collective shrug of the shoulders among the CEOs of Silicon Alley — a historic moniker reflecting how many in the sector are in the thrall of Silicon Valley’s Big Tech — with many deferring to their earlier sales pitches and some backing publisher-powered alternatives.
Speaking on The Trade Desk’s August 8 earnings call, during which the company announced a 26% year-on-year revenue increase in Q2 revenue to hit $585 million, CEO Jeff Green underlined his earlier 2020 prediction (the same year the Chrome team claimed it would depreciate cookies within two years) that Google would not follow through with its earlier plan.
Green further outlined how The Trade Desk-sponsored offerings for a post-cookie world, i.e. its “premium internet” pairing of OpenPass and UID2.
“We, along with many others, have created the new identity fabric of the open internet, one that is so much more fit for purpose than cookies could ever be,” he told equity analysts, claiming UID2 continues to gain traction among media owners such as FOX, Roku, and Tubi.
In the days after Google’s July 22 announcement, Green also took to LinkedIn to more comprehensively explain his point of view on Google’s wranglings. “It is a good thing for the open internet,” he wrote in a post where he went on to accuse Google of a “bait and switch” — perhaps this was chagrin over The Trade Desk’s own Privacy Sandbox investments — but underlined the need for forward-looking experimentation.
“Some advertisers and publishers will use the extra time wisely, and some will not,” he wrote, adding that faith that Google will stick to any publicly stated plan regarding the fate of third-party cookies would be folly, especially given its ongoing antitrust woes.
“If you were implementing alternative identity strategies, stay the course,” he went on to add in a post underlining how The Trade Desk continues to promote UID 2, its cookie alternative that has received mixed reviews from some publishers in recent years.
Elsewhere on this week’s earnings calls, PubMatic boasted of a 6% year-on-year increase in Q2 revenue to $67.3 million and that its full-year revenue would grow 9% to between $288 and $292 million. The phrase “cookies” only received one minor mention in its prepared statement.
‘Missing the point’
Meanwhile, on August 7, LiveRamp’s chief executive assessed his outlook comprehensively, commenting that much of the last three weeks postulations have “missed the meta point.” In particular, he noted how Chrome is on course to introduce IP protection, which prevents covert tracking by websites (another move whereby Google would ape Apple).
The future is bright for identity powered by sellers better positioned to obtain user data and consent
Michael Barrett, Magnite CEO
He underlined his company’s efforts to offset the decline of third-party cookies with its Authenticated Traffic Solution and RampID. “We have long viewed the industry’s move to authenticated addressability, including Chrome’s transition from cookies, as a catalyst for our data collaboration platform,” he added.
On the same day, Magnite made its quarterly disclosure, repeating its recent mantra that the company formerly known as Rubicon Project is now a CTV player, a transformation that means cookies are of increasingly little importance to its forward trajectory. Speaking to analysts, Magnite CEO Michael Barrett echoed Green’s assessment, noting, “Frankly, we’re not surprised with their decision given some of the challenges that they’ve acknowledged with the rollout.”
He went on to add, “The future is bright for an identity model powered by sellers who are better positioned to obtain user data and consent for implementing first-party identifiers.”
Compare and contrast
Meanwhile, on its August 1 earnings call, Criteo’s leadership made much of its close relationship with Google decision-makers to assuage investors’ concerns over how the Chrome team plans to communicate the option to delete or maintain third-party cookies to internet browser users. According to Criteo’s chief product officer, Todd Parsons, the years of experimentation in the Privacy Sandbox have not been futile; he claimed such lessons could be used to enhance “compare and contrast” differing tactics.
During the same week, Zeta — a company that positions itself as an “AI-powered marketing cloud” powered by an “opted-in database” — raised its full-year 2024 outlook by $25 million to $925 million and shrugged off Google’s recent U-turn. On the company’s subsequent earnings call, Zeta CEO David Steinberg was quizzed on how the turnaround had influenced its advertisers’ queries and the likely impact on their subsequent spending decisions. He went on to echo the earlier sentiments of The Trade Desk’s Green, maintaining that Google was never likely to follow through with cookie deprecation.
According to a transcript of proceedings from The Motley Fool, he added, “I do think we’re going to see a dissipation of cookies over the next few years.” Steinberg further questioned cookies’ ability to help marketers achieve their desired aims. He added, “Almost all third-party cookies are what I call last touch attribution… we’re really looking at is every touch point by utilizing the Zeta ID and being able to deliver a true return on investment versus a last click or last touch attribution.”
Elsewhere, the leading content verification and measurement companies DoubleVerify and Integral Ad Science brushed off the change, with financial analysts more eager to query their efforts to capitalize on the “Oracle opportunity,” Olympic tailwinds, and CTV opportunities.
DoubleVerify’s chief executive, Mark Zagorsky, spun the U-turn as an opportunity to expand its open web measurement (as well as its walled garden offering) when commenting on his company’s results, held a week after Google made its announcement. He further forecast that the verification outfit’s revenue would increase 17% in 2024, ranging between $667 million and $675 million.
According to The Motley Fool’s transcript of the July 30 earnings call, he said, “We believe that Google’s announcement to step back from blocking third-party cookies by default on Chrome will instill confidence in buyers to spread across programmatic channels and create additional growth opportunities for our advertiser, platform, and publisher customers.”
More from Google in Q4?
Similarly, IAS, which also helps advertisers measure ad performance on the open web and walled gardens, struck an optimistic tone during its subsequent Q2 earnings disclosure, hosted on August 1; it raised its 2024 financial outlook with revenues in the region of $538 million to $544 million.
Of course, Google made the bombshell announcement a day ahead of its July 23 quarterly earnings disclosure when, according to a transcript from The Motley Fool, Wall Street analysts that rate the stock price of the internet giant only raised the issue once with executives–arguably an indictment on the long-term role of cookies for senior executives at parent company Alphabet.
“It’s obviously an area we will be taking feedback from the players in the ecosystem, and we are committed to being privacy first as well,” commented Alphabet CEO Sundar Pichai, underlining its efforts to engage with executives at third-party ad tech companies, some of whom believe will reach fruition by the close of 2024.
