By Tim Peterson • February 2, 2024 • 5 min read •
With Google officially starting to deprecate third-party cookies in its Chrome browser last month, advertisers, publishers and ad tech firms have been trying to understand how Google’s Privacy Sandbox will help them mitigate any negative impacts from the cookie’s demise. But they can’t do that work in a silo — which is why the need for end-to-end testing was a major emphasis among the industry executives who attended the Interactive Advertising Bureau’s Annual Leadership Meeting this week.
“Everybody has been testing whether these things are technically possible, whether [Privacy] Sandbox can be used, but not whether they work for the needs of buyers or sellers. There’s a pipeline of new tech, but none of the testing has been done yet. So we could easily find ourselves in a world where the tech works, but it doesn’t work throughout the marketplace,” said one publisher in attendance.
The way for companies to sort out to what extent Privacy Sandbox proposals work throughout the marketplace is to test them throughout the programmatic supply chain.
“Across the entire ecosystem, you need the right supply-side [platform], you need the right ad tech, and you need the agency that’s willing to test holistically,” said Patrick Gut, vp and head of U.S. sales at Adlook, a demand-side platform owned by ad tech firm RTB House.
“I think that’s a big part of what the next six months or whatever needs to be about. Right now there’s a pretty small number of fully lit-up connections from buyer to seller,” said Paul Bannister, chief strategy officer at Raptive, which services publishers’ advertising businesses.
The onus on lighting up those connections and enabling end-to-end Privacy Sandbox testing falls on the ad tech companies sitting in the middle of the programmatic supply chain.
“It’s up to the ad tech vendors to do the work to connect the pipes and enabling testing. Individually, marketers and publishers on their own, it’s not easy for them to just do something. For marketers they have to go to a place that allows them to connect their dollars to supply, and for publishers, [they have to find outside ad tech] that allows them to connect their inventory to dollars,” said Bosko Milekic, co-founder and chief product officer of ad tech firm Optable.
As Digiday has reported, there are challenges facing ad tech companies that need sufficient resources in order to build the tools and capabilities to support Privacy Sandbox. But that work is underway, as is the end-to-end testing.
This week, the publisher said they launched an end-to-end test of Privacy Sandbox. Last week Optable announced an early access program for advertisers to use Privacy Sandbox to run ads across publishers working with Optable. Raptive has run tests to track the early impact of Chrome’s third-party cookie deprecation.
“That’s the stage we’re at where we’ve integrated into all the [Privacy Sandbox] APIs as best we can today,” said Mike McNeeley, svp of product at supply-side platform Index Exchange. “There’s a couple things we’re still improving upon it, but at least enough that a [demand-side platform] could integrate with Index [for Topics and Protected Audience testing]. And we’re starting to get those integrations up and live so that the agencies can bring on their advertisers to actually put money into the pipes to see if it works for them.”
There are some limitations to that end-to-testing, though. The aforementioned technical hurdles are a big one, but another is the constraint around allowing Privacy Sandbox-based advertiser bids to compete against cookie-based bids for ad impressions.
For example, the Protected Audience API’s component auction process is currently limited to the 1% of impressions for which Chrome is testing cookie deprecation, according to Milekic. That constraint has likely been instituted to mitigate any performance hit from sites and ad tech firms triggering Privacy Sandbox auctions for every impression, but it also inhibits the industry’s ability to not only observe and tackle that performance impact on a broader scale but also to see how Protected Audience can compete against the third-party cookie on that bigger playing field.
“When that happens, demand from companies like Optable can start to compete with other bids on the page right away, before third-party cookies are even removed. And that allows the industry to prove value,” said Milekic.
“As that comes online, it will be easier to see what is the performance hit and where are the cases where [Protected Audience API] needs to not run at all because it’s too time-sensitive. What are the cases where we can wait five seconds to get a better bid. Trying to understand those cases,” said Bannister. “They [i.e. Google’s Privacy Sandbox team] need to put that flexibility out there so people can test it fully on all the time to see what’s happening.”
The attention being paid to Protected Audience API’s component auction limitation is representative of the larger emphasis among those interviewed for this article on the need for broader-scaled testing of Privacy Sandbox. And that need for broader-scaled testing boils down to giving the entirety of the programmatic supply chain — and especially advertisers and publishers — clearer insight into how Privacy Sandbox will affect their business results for better and worse and, importantly, what adjustments they can make to make that impact for the better.
With that being said, this emphasis on end-to-end testing and expanding the ability for Privacy Sandbox-based bids to compete in the larger programmatic marketplace seems to be a positive signal for an industry that has been underprepared for the third-party cookie’s demise.
“The biggest takeaway right now is that the positive is more segment ties; what I mean by segment ties is buyer, ad tech, SSP, DSP — all those different segments of our ecosystem are all leaned in,” said Adam Roodman, svp of product strategy and management at Yahoo Advertising. “A year ago — and every [ALM] prior to this [year’s], it might have been some but definitely not all. And so it gives me confidence that we’re all contributing to the exploration of all this.”
Finally.
https://digiday.com/?p=533765
