Google ads: are third-party ‘cookies’ still needed?

11 FEBRUARY 2020

A Charles Sturt University expert explains some of the issues around Google’s intention to stop supporting third-party cookies in its Chrome browser.

Associate Professor in Information Technology in the Charles Sturt University School of Computing and Mathematics, Yeslam Al-Saggaf, explains some of the issues around Google’s plan to stop supporting third-party cookies in its Chrome browser over the next two years.

Advertising and revenue

Professor Yeslam Al-Saggaf says tech giant Google’s main source of revenue is advertising, and Google serves ads in two ways in order for its users to use its services for free.

“Firstly, Google positions ads in search results, which is where most of the revenue for Google comes from,” he said.

“These ads appear at the top of a user’s search result, and have labels such as ‘ad’ or ‘sponsored’, and when a user clicks on an ad at the top of a search result, the advertiser pays Google.

“Secondly, Google also makes money from serving ads on web publishers’ websites who ask Google to place ads on their websites in order for these publishers to also make money from advertising.

“In this case if a user clicks on an ad on the publishers’ websites, Google only gets a small portion of the money from this ad.”

Ads and ‘cookies’

Professor Al-Saggaf explained the more relevant the ads are to users, the more revenue the ads can generate, which is why Google collects various types of personal information about its users.

“There are numerous ways Google collects various personal information from users of their services, including users’ search keywords, their social media posts, and other engagements; that is, likes, group membership, and subscriptions, the videos they search and watch, and the sites they visit,” he said.

But one effective way to collect data about users is via what is known as ‘cookies’, a small piece of text that your browser sends to a website you visited in order to improve your browsing experience the next time you visit that site.

“A ‘cookie’ contains information such as how much time a user spent on a website they visited, which language they used, and which other settings they have configured when they use that website,” he said.

“There are two types of cookies; first-party cookies travel back and forth between your browser and the site you are visiting, but third-party cookies travel between your browser and the website of a company (third-party advertiser) that serves an ad on the website you are visiting.

“It is these third-party types of cookies that Google will no longer support.”  

Google and third-party cookies

Professor Al-Saggaf says Google placement of ads on web publishers’ websites affects only a portion of Google ad revenue, because, as mentioned above, Google makes more money from serving ads in search results.

“If third-party cookies are no longer supported, it is not only third-party advertisers, including Google partners (that is, those companies that serve ads on behalf of web publishers), that will be impacted.

“More importantly, it will also impact web publishers who will have to use first-party cookies to serve ads on their websites,” he said.

“However, as first-party cookies do not lead to relevant ads or ads that follow users across devices, the revenue from such ads will be limited.

“In this case, web publishers’ only option may be to ask Google to serve their ads in Google search results.

“However, it is not clear if this is what Google wants to achieve from discontinuing support for third-party cookies, in an attempt to force web publishers to use the more profitable (for Google) search ads.

“While forcing web publishers to use search ads may mean more money going to Google than they would have received had web publishers served the ads on their websites, web publishers will see a drop in funding by up to 52 per cent.”

Cross-device tracking, machine learning and targeted advertising

Professor Al-Saggaf suggests it is also possible that Google has given up on third-party cookies, under the pretence of protecting people’s privacy, because third-party cookies have run their course, or that advertising companies have adopted a new targeted advertising technology.

“Targeted advertising is now possible through digital fingerprinting, which uniquely identifies your device based on information trackers collected about the type of device (PC, laptop, smartphone, iPad, etc.), operating system used (iOS, Android etc.), installed browser extensions and plugins, time zone, screen resolution, installed fonts and text encoding, etc.,” he said.

“Using your location, your IP addresses and your smartphone wi-fi movements along the road to your home or workplace, they can also pinpoint your various device identities to you, thereby tracking you across your various devices.

“However, cross-device tracking based on digital fingerprinting is only ‘probabilistic’ – that is, not 100 per cent accurate because it involves guess-work.

“If you log on to the same service from your various devices using the same username, then in this case cross-device tracking becomes ‘deterministic’.

“But, the best game in town when it comes to targeted advertising is now machine learning, which enables the extraction of patterns about people’s behaviours and characteristics and their previous purchases from historical data.

“These patterns can then be applied to new people who match these behaviours and characteristics.

“With machine learning targeted advertising, you will now receive ads for products and services that even you don’t know at the time that you desperately need.” 
Media Note:

To arrange interviews with Associate Professor Yeslam Al-Saggaf contact Bruce Andrews at Charles Sturt Media on mobile 0418 669 362 or news@csu.edu.au

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