A surprising move with significant implications for your future Internet announced the Google. It has decided to abandon its plans to remove third-party cookies – those critical files that track users’ activity across the web to advertisers.
But what exactly are cookies? And what does Google’s decision mean for how you interact online and are “tracked” by the advertising industry?
CNBC breaks down what you need to know.
What are cookies and how do they work?
Cookies are small pieces of code that websites deliver to a visitor’s browser. They remain while the person visits other websites.
These snippets of code silently track our online activities, gathering information about what we search for and the types of products we tend to buy, for example. They have become a key way for advertisers to fine-tune how they target people with online ads.
The practice of using third-party cookies to track web activity helped fuel much of the digital advertising ecosystem, and advertisers still rely heavily on cookies as a tool to collect data about their customers.
Around 40.9% of websites worldwide use cookies to collect data about users, according to data from W3Techs.
The backbone of advertising
“Third-party cookies are the backbone of online behavioral advertising. It’s how your products or brands track you online,” Matthew Holmans, a partner at law firm Cripps, told CNBC.
“If you’ve ever wondered how it’s possible to search for a new pair of shoes online and then see the same shoes advertised on your favorite social media platform, the answer is simple: third-party cookies.”
The user convenience argument
But cookies aren’t just a way to track users’ browsing habits. They’re also a fundamental part of how the modern web works. They play a key role in keeping users logged in as they navigate from one site to another.
One argument for keeping cookies is convenience. Simply put, they can make browsing the web more convenient for users, as the ads displayed on shopping devices are tailored to their interests.
They also help keep the web free to use – many publishers have introduced paywalls and invested in sponsored content in response to the expected phase-out of cookies.
And the uncomfortable counterargument
On the other hand, cookies have also become annoying for many users.
Privacy regulations in Europe require websites to display boxes asking users which cookies they want to store on their devices. This results in the checkboxes we’re all familiar with, asking for our consent to cookies.
What alternatives did Google suggest?
Initially, Google tried to introduce a more privacy-focused alternative to cookies.
The company launched the ‘Privacy Sandbox’ initiative in 2019 to find a solution that protects user privacy while allowing content to remain freely available.
And in 2020, Google said it would end support for these cookies when it found a solution that works for both users and publishers and advertisers. The company had targeted early 2022 as the year this new alternative would launch.
One of the proposals included something called “Federated Cohort Learning,” which would essentially put people into groups based on similar browsing behaviors, meaning only “cohort IDs” would be targeted, not individual user IDs.
However, the company has repeatedly delayed the timetable for phasing out cookies, citing feedback from the advertising industry that implementing these changes would mean potentially less effective advertising campaigns.
This issue is the main reason why Google has now decided to end the planned deletion of third-party cookies.
“Essentially, Google admitted that the marketing industry was not ready for this change,” Holman told CNBC.
“He also believes he can develop a feature in the Chrome browser that will allow consumers more choice.”
What is Google showing now and how will it work?
Google says it now plans to keep cookies. Instead of minimizing them, the tech giant will “introduce a new experience in Chrome that lets people make an informed choice that applies to their web browsing,” it said.
“We are discussing this new path with regulators and will work with industry as we implement it,” he noted. He did not disclose further details of his plans.
For now, Google’s change will likely mean that the way you interact with the web will remain largely the same. Users will still see checkboxes at the top of a web page asking whether they want to accept all cookies or just essential cookies.
The implications will likely be greater for advertisers, as the valuable data marketers receive from tracking users across the web will continue to grow.
“The Internet will remain free”
“The number one impact is that the internet will remain free,” Steve Silvers, executive vice president at Kantar, told CNBC.
“Without third-party cookies, website owners would have a hard time figuring out how to monetize their audience, which is one reason why there has been such a huge increase in paywalled content in recent years,” he added.