Google’s Privacy Sandbox Faces Industry Scrutiny:What Ad-Tech Companies Are Saying

As Google’s Privacy Sandbox initiative starts to take shape, ad-tech companies are voicing their concerns about the digital giant's new approach to online advertising. According to recent reports from both supply and demand side platforms, several issues have emerged, including latency problems and declining ad prices.

Early Findings Highlight Challenges

Three recent reports, reflecting the perspectives of both supply and demand side platforms, indicate that there are still significant hurdles to overcome. These reports build on early data about Privacy Sandbox, which aims to enable online advertising without compromising user privacy. Google is positioning Privacy Sandbox as a replacement for third-party cookies, which are being phased out of its Chrome browser.

In January, Google removed cookies for about 1% of Chrome users (around 30 million people) to test the new system. Publishers quickly reported a 30% drop in monetization for those users. Nearly six months later, new reports from Criteo, Index Exchange, and NextRoll reveal that this revenue dip persists.

Revenue Impact and Industry Reactions

Companies like Raptive are still seeing a significant 30% hit to revenue in Chrome’s cookieless world. Despite the continued use of third-party cookies, this early data shows the challenges ahead.

The most alarming report was from Criteo's June report that highlighted a potential 60% revenue loss for publishers relying on Privacy Sandbox if third-party cookies were eliminated today. The report also suggested that Google's own ad-tech business benefited disproportionately from Privacy Sandbox, capturing a majority of ad spend during tests. This claim is particularly noteworthy as Google faces an antitrust case from the Department of Justice over allegations of monopolizing the digital ad market.

Index Exchange's findings were similar. In tests involving data from 10 demand-side platforms, 100 publishers, and thousands of domains, they found that CPMs (cost per thousand impressions) fell by 33% when using Privacy Sandbox. Without cookies or Sandbox tools, CPMs were 36% lower, indicating Privacy Sandbox performed only marginally better than having no solution at all.

The Road Ahead

The stakes are high, given Chrome’s dominance as the most popular web browser and the significant reliance on cookies in the programmatic ad industry. Early indications of revenue loss are concerning, but the true impact remains uncertain.

Ad-tech companies are urging Google to make several changes. Index Exchange wants Google to support various ad inventory types, while Criteo suggests a phased deprecation of cookies. NextRoll calls for a definitive timeline for the end of third-party cookies to help the industry prepare.

Google is open to feedback and emphasizes that current performance metrics don’t fully represent the future marketplace. “We expect performance numbers to evolve as adoption expands,” said Google spokesperson Scott Westover. The company continues to work on refining Privacy Sandbox, aiming to balance user privacy with effective online advertising.

The problem is bigger than this

Firstly, this is a Chrome-only solution, and in most markets, Chrome accounts for only a portion of the traffic you receive. SimilarWeb and StatCounter report similar browser market shares:

• Global: 63% Chrome, 20% Safari,     5% Edge
• US: 48% Chrome, 38% Safari,     8% Edge
• Australia: 49% Chrome, 38% Safari,     7% Edge

By focusing solely on Chrome, you’re missing out on approximately half of your potential visibility. Our experience with several clients has shown that Chrome traffic is not representative of traffic from other browsers, particularly Safari mobile traffic. Safari users interact and behave very differently with your brand compared to mobile Chrome users.

Secondly, this solution relies on an ID that you do not own and cannot integrate into your internal systems. You cannot capture, store, or pass this anonymous ID into your Customer Data Platform (CDP) or data lake for further analysis.

Thirdly, since you don’t own this ID and cannot store it, you cannot activate it outside the Google environment.

We are seeing a strong trendi n brands taking control of persistent cross-browser first-party identifiers and using them in second-party data exchanges as well as with leading publishers to develop deeper data-driven relationships.

The result is better-performing campaigns that deliver results for advertisers, enhance performance on publishers’ ad servers, and provide true attribution across campaigns.

In summary, advertisers gain greater performance for their spend and clearer insights into the performance and ROI of their campaigns. Publishers achieve better results and attract more spend, as advertising dollars tend to follow performance.

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