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How will Google Privacy Sandbox Affect Your PPC Advertising? (And what can you do about it?)

Google Privacy Sandbox logo

Most businesses will be aware of the Google Privacy Sandbox Initiative, not least because of the recent news that third party cookie deprecation in the Chrome browser – one of its key proposals – has been postponed by Google for the third time. Full deprecation is now planned for early 2025, subject to regulatory approval.

Google Privacy Sandbox Initiative has been in planning since 2019 and it is currently in testing. Though its eventual form is not yet finalised, it proposes a range of changes to the mechanisms underlying user interactions online. Privacy Sandbox’s measures are intended as broader web standards, and Chrome’s dominance in the browser and analytics arena certainly makes it more likely that it will influence standards in the broader online ecosystem. So while, at browser level, the changes will initially only apply to Google’s own Chrome browser, it is certainly possible, if not likely, that they will be adopted by other browsers in future.

Google states that the focus of the Privacy Sandbox changes is to enhance user privacy. Some critics, however, claim that they will also give Google a monopoly on user data, enhancing the dominant position it already holds and making it the provider of choice for online advertising.

Privacy Sandbox’s proposals are of key importance to advertisers as they will make it much harder for them to analyse and group website visitors in order to target them with advertising. Since both Chrome browser and Google Analytics are the market leaders in their areas the measures, if introduced, will necessitate a widespread shift away from analysis methods which have been central to marketers for many years. Here, we will focus on the implications of the proposed IP protection and third party cookie deprecation.

Why Are IP addresses A Threat To User Privacy?

Keeping our lives private is important to most of us. The net curtain industry relies on our wish to keep prying eyes away from our activities at home,and while we want to feel safe when out and about, there is huge debate over privacy violation by CCTV monitoring on our streets. So it’s no surprise that the online world is a third domain – of rapidly increasing importance for most – where many wish to keep their activities private, even when they are merely Internet browsing. It is surprising, then, that many users are unaware of the threat to their online privacy posed by an unprotected IP address. A February 2023 survey by Nano Interactive found that only 12% of respondents over age 16 use a VPN daily to hide their IP address while browsing, while 35% never do. And that means that a wealth of IP address-derived information is currently collected and is available to interested parties. This data can be used to find what websites a user has visited, ascertain their interests, analyse their behaviour, and locate them geographically. It can then be used to target them in various ways, some less innocuous than others.

Woman browses the Internet
Accept or reject cookies screen on a website

What Is The Threat To User Privacy From Third Party Cookies?

People’s behaviour with cookies is strangely similar to that with VPNs.  Some users block every last cookie they can while at the other extreme many unthinkingly click “Accept All” on every site. 

Once again, that second group are arguably opening themselves up to privacy issues.  Their blanket acceptance of cookies allows not just first party cookies to be written to their browser by the website they visit, but also gives permission for “third party” cookies, created by “partners” of that website, often data collection companies and advertisers. While the former usually contain useful items such as the visitor’s username and basket status, the latter are often created without the user’s direct awareness and have the primary purpose of tracking their online activity and profiling them.

Third party cookies do not usually store an IP address or lead directly to a user’s identity, so the threat to privacy is nuanced. It partly depends on people’s attitude to being tracked and targeted with advertising. Many, however, find this “spying” on their online activity intrusive.

The Use Of IP Addresses And Cookies In Marketing

Historically, the unwariness of Internet users has been good news for marketers, who have built advertising strategies around the data collected about their online activity. At its launch in 2005, Google Analytics stored IP addresses, likely in their entirety, and used them to group website users by geographical area. This meant that website owners could see exactly where their customers were coming from and find regional patterns of behaviour. They could then create area-based content, localised promotions, and tailor their marketing strategies to individual regions. However, with the passage of time and increasing privacy concerns, access to identifying IP address data has been increasingly restricted. IP addresses were anonymised in Google Analytics from around 2013 with only generalised location data stored. And 2023’s updated Analytics, GA4, makes only temporary use of anonymised IP addresses to roughly geolocate website visitors before deleting the IP address data.

Third party cookies have also been a mainstay of online advertising for many years. By tracking users across websites, they have allowed a further level of profiling which has been used by advertisers to target them with particular ad campaigns, and retarget them when they visit other websites in the same network. The cookies also allow the advertiser to see how often a user has seen an ad so that they can apply a cap and maximise advertising reach.

However, cookies have suffered a similar fate to exposed IP addresses. As privacy concerns have grown, some browsers have introduced measures which allow users to block cookies while others have focused on inbuilt privacy measures. And notably, the General Data Protection Regulation (GDPR) implemented in Europe in 2018 gave users more direct, website-by-website control over their data, including the ability to reject third party tracking cookies.

What Is The Google Privacy Sandbox Initiative? – A Brief Outline

In its announcement of the Privacy Sandbox Initiative in 2019, Google stated that it wishes to find a solution which “protects user privacy and also helps content remain freely accessible on the web”. The proposals are still under development, and some previous proposals, such as Federated Learning of Cohorts (FLoC) and browser Privacy Budget are no longer being actively pursued by Google. At time of writing, key features include :  

Topics API: Temporary browsing topics (like “fitness” or “finance”) will be assigned to users based on their recent browsing history. Websites can then target ads based on these broad topics. This offers some personalisation while protecting user privacy by not revealing specific websites visited.

Reduced Fingerprinting: Privacy Sandbox features aim to limit how websites can uniquely identify users through browser configurations. This reduces the ability to track users across websites and hinders tools that rely on fingerprinting for data collection.

Third-Party Cookie Deprecation: A core objective of Privacy Sandbox is phasing out third-party cookies entirely. These cookies have traditionally been widely used for ad tracking across websites and their removal will significantly impact how user data is collected and analysed online.

IP masking. Google is actively exploring ways to limit a website’s access to a user’s exact IP address, using a 2-hop proxy system to hide user IP addresses from destination websites. This feature is still under development and testing with no confirmed launch date before 2025, but if introduced, it will have an important impact on how marketers can analyse and group website users in analytics tools.

How Will Google Privacy Sandbox Impact PPC Advertising?

Google Privacy Sandbox will undoubtedly present a challenge to some traditional marketing methods by cutting off sources of consumer data which have previously been used. By blocking real IP address data, IP Protection will further limit the precision with which businesses can geolocate website users using GA4.

Without this information, advertisers will find it more difficult to create advertising campaigns targeting consumers based on their geographic region. GA4 will have to depend instead on features such as language, time zone, currency and the nature of the query to try to guess user location giving a result which is at best approximate and at worst incorrect. IP address masking might also make it more difficult for marketers to distinguish between genuine website traffic and bot traffic for website behaviour profiling, removing another data source which has been used to guide campaigns. In addition, advertisers will only be able to target regions designated by Google, which will lack the precision which was available previously.

Deprecation of third party cookies and limits on other tracking methods such as device fingerprinting, meanwhile, will cut off a wealth of user profiling data, bringing about changes in how targeting, retargeting, and campaign measurement are carried out. Advertisers may struggle to reach such specific audiences as they did previously. It will be more challenging to retarget website visitors with ads due to limited tracking across sites. And it will become trickier to attribute conversions to specific ad clicks.

A door slams in front of a private detective, representing the blocking of trackers in Google's Privacy Sandbox proposals

When Will Google Privacy Sandbox’s Measures Be Introduced?

Timings for the release of Google Privacy Sandbox are uncertain, with no single launch date for all features. While third party cookie deprecation in Chrome has been underway since Q4 2023, Topics API is still under development and IP Protection is in testing.

The recent postponement of the final deprecation of third party cookies until a possible early 2025 slot is likely to have knock-on effect for Topics API, which will probably follow after it. And the Wall Street Journal has reported on a draft report from the UK Information Commissioner’s Office which expresses concern that Google’s new measures leave gaps that can be exploited to deny privacy and track people online. Google itself has stated that the 2025 date for cookie deprecation, at least, will be “subject to addressing any remaining competition concerns of the UK’s Competition and Markets Authority (CMA)”. So as regards release dates for the different elements, there’s going to be a bit of “wait and see”. However current information suggests that IP Protection, like third party cookie deprecation, might be introduced in 2025, so businesses will need to prepare for the changes sooner rather than later.

How Can Marketers Overcome The Challenges To PPC Advertising Posed By Google Privacy Sandbox?

When (and currently, if) the proposals of Privacy Sandbox go live, advertisers will need to adopt different strategies to target their PPC advertising. A much greater emphasis will need to be placed on first party data, making customer relationship building and direct customer data gathering of much higher importance than previously for some marketers. Data collection methods might include analysis of user subscriptions and app interactions, information provided on sign-up forms, social media monitoring, and custom surveys and forms. A well-crafted CRM database can be an invaluable way for marketers to better understand their audience and create more accurate buyer personas. We will talk more about these methods of data gathering in upcoming posts.

It will also be increasingly important to use alternative insights from Google Analytics, such as page views, time spent and navigation paths. There is the option, of course, to move to an alternative reporting tool. Many are available, from free tools such as Fathom Analytics and Clicky to the big names in the paid analytics world such as Semrush and Adobe Analytics. And many marketers already use these tools alongside Google Analytics to provide deeper insights into campaign performance and user behaviours. However, given the pre-eminence of Google Chrome in the browser market, the privacy enhancements introduced by Privacy Sandbox will affect data available to these alternative analytics tools as well.

Advertisers can also consider focusing on larger affinity, in-market, and custom audiences to mitigate the risks associated with broad match targeting. This allows for brand exposure to the right audience, even if the search queries are not perfectly matched. By using these alternative methods, marketers can create targeted campaigns without relying on IP-based geolocation.

Final Thoughts

If introduced as proposed, Google Privacy Sandbox initiative will undoubtedly necessitate change to some long-established marketing techniques. Marketers will no longer be able to rely on current tracking methods or geolocation of website visitors using their IP address. Instead, other data-gathering methods will grow in importance, and there will be a stronger focus on first-party data collection to assist customer profiling for ad campaigns.

Many businesses have already been working to adapt their practices to fit with the proposed changes. By adjusting to the new measures and employing creative strategies, advertisers will still be able to effectively reach their target audience despite the challenges posed by Google Privacy Sandbox, while users will benefit from enhanced online privacy. Surely a win-win situation.

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