In a decision that shocked the ad world, Google said Monday it no longer planned to phase out third-party tracking cookies from its Chrome web browser. It will instead introduce a new prompt for users to choose how they want to be tracked across Google's search products.
Why it matters: Google's threat to eliminate cookies sent the ad industry scrambling to find alternatives, prompting anti-competitive concerns from regulators.
U.K. policymakers asked the tech giant in February to pause its planned phase-out of cookies over antitrust concerns.
Shares in rival ad tech firms ticked up following Google's announcement.
Data: Yahoo Finance; Chart: Axios Visuals
Catch up quick: Google first announced plans in 2020 to eliminate support for third-party tracking cookies in Chrome by 2022.
It subsequently pushed the deadline to end support for cookies three times. The latest delay in April pushed the deadline to 2025.
Zoom in: Google tried to test efforts to replace cookies through an initiative called the Privacy Sandbox, which includes a set of proposals created in consultation with the broader ad industry to move away from tracking cookies.
Over the past few years, Google introduced several cookie-replacement experiments for the broader industry to test, but none ever gained full support from industry partners and regulators.
FLoC, Google's initial cookie replacement, was scrapped in 2022 after two years, in part because privacy experts worried it could inadvertently make it easier for advertisers to gather user information.
It later tested a different product, called "Topics" that allowed marketers to place ads via a limited number of topics determined by users' browser activity. Last year it began testing a new "Tracking Protection" feature that limited cross-site tracking on Chrome.
The big picture: Despite several experiments, Google conceded Monday that rallying industry-wide support around a single solution would prove difficult.
A shift away from cookies "requires significant work by many participants and will have an impact on publishers, advertisers, and everyone involved in online advertising," Privacy Sandbox VP Anthony Chavez wrote in the blog post announcing the change.
"Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they'd be able to adjust that choice at any time," Chavez added.
Google's new salvo is reminiscent of an app tracking change that Apple introduced in 2021. Apple argued the change benefited user privacy, while competitors argued it was anti-competitive.
Google said it's discussing its new path forward with regulators, "and will engage with the industry as we roll this out."
Reality check: Google's threat to eliminate cookies may have come up empty, but it did succeed in pushing the industry to become less reliant on cookies, and more focused on privacy-forward ad-tracking solutions.
Because the vast majority of web browsing in the U.S. (66%) happens on Chrome, most marketers, ad tech firms, agencies and publishers felt they had no choice but to find new alternatives to cookies if they wanted to save their businesses.
Some firms worked together to create a solution called Universal IDs that relies on hashed email and phone number data.
Marketers also began prioritizing the collection of first-party data and using so-called "clean rooms" to store and share data.
The bottom line: In a purely practical sense, "what Google does makes almost no difference," Joe Root, CEO of publisher tech firm Permutive, told Axios last month. "70% of the internet doesn't have a third-party cookie. Google can make a change, but like 40% of [Chrome users] have already disabled cookies."
