Google kills its cookie-crushing plan because one tweak can shake an entire industry

How the cookie doesn’t crumble… Cookies are the reason that swimsuit you clicked on once is still following you around the internet. They’re little bits of code that track your web-browsing activity. In 2019, Google rocked the ad industry by announcing plans to kill third-party cookies in Chrome (the world’s most used browser). Backlash from the $600B/year digital-ad industry — which relies on Chrome for tracking data — was intense. For over four years, Google worked on ways to transition to a no-cookie browser. This week:

• Google said “nvm,” reversing a long-planned move that had drawn intense pushback from advertisers and regulators.

• New plan: Instead of eliminating cookies, Google will prompt users to decide whether they want them turned on or off, according to the UK’s antitrust regulator. FYI: users can already block cookies in Chrome settings.

• Silicone-chip cookie: About 40% of sites use tracking cookies, and Chrome is the only major browser that still supports them.

Feed your own sweet tooth… While privacy advocates had celebrated Google’s cookie-crushing plan, advertisers railed against it, saying it would only give the search giant even more of an ad-vantage. The argument: if Google eliminated third-party cookies, then advertisers would be forced to move spending to Google’s ad products to get better targeting data. For years, advertisers bracing for the cookie extinction raced to collect more info on their own customers (aka: first-party data).

• That fueled the rise of “retail media,” where companies like Walmart, Kroger, CVS, and Amazon use their troves of customer data to target ads. Even non-retailers like Uber, United Airlines, and Marriott have increasingly leveraged first-party data to sell ads.

• Rally: Since Google’s cookie reversal, the stock index for companies that provide ad services has spiked.