Privacy Sandbox Is Not Working. What Are Your Alternatives?

Published July 5, 2024

Criteo just released some sobering news for publishers and advertisers who hoped that Google Privacy Sandbox would provide a viable alternative to third-party cookie targeting.

After extensive testing, Criteo predicts that publishers will “lose an average of 60% of their revenue from Chrome.” Considering that Google Chrome is the browser of choice for 63.87% of internet users worldwide, this is serious.

As other testers before have found, Criteo also observed substantial increases in latency (more than 100% on average) in displaying ads.

The Criteo report suggested improvements to lessen publisher losses, including expanding data limitations in the Protected Audience AI, more granular data in auction reports, and exclusion targeting. However, Google isn’t close to its goal of 5% or less revenue loss for publishers.

Impact on Advertisers

The report is focused on publishing. But loss of publisher revenue directly translates to challenges for advertisers. If publishers can’t maintain their revenue, it’s because advertisers can’t effectively target their audiences on these sites. This reduction in targeting effectiveness means higher costs for advertisers and lower returns on investment.

Now What?

Criteo isn’t alone in its findings. The UK regulator, the Competition and Markets Authority (CMA), basically said the same thing in its April 2024 report. Sandbox is not working – paradoxically precisely because Google doesn’t track consumers against their will in the privacy sandbox.

So if you are an advertiser or a publisher, what now? You have some options, including: cleanrooms, ID resolution solutions, contextual targeting, and household demographics.

Let’s look at each.

Clean Rooms

Data clean rooms let publishers and advertisers match user-level data without sharing personal information or raw data, enabling privacy-compliant audience targeting. For instance, a publisher can offer granular insights into their audiences without exposing readers’ privacy data.

However, data clean rooms are costly. According to a 2023 IAB report, 62% of users spent at least $200,000 on data clean room technology in 2022; another 23% spent $500,000. They also have significantly less scale and are resource-intensive, with nearly half of companies dedicating at least six people to administer them.

ID Graphs

User ID graphs involve marketers hashing their first-party data and matching them with an identity resolution provider. This method is theoretically more privacy-compliant, as it is based on first-party data. However, its success relies on the provider obtaining similar consent for the IDs it collected and made available.

Contextual Targeting

Modern contextual targeting uses AI and machine learning to analyze page content more deeply, understanding context, sentiment, and semantics beyond just keywords. This method doesn’t rely on personal user data or cookies, making it increasingly important as third-party cookies are phased out.

However, scaling a campaign can be challenging. Marketers face a tradeoff between precision and reach. Highly precise contextual targeting can drive campaign results but makes it difficult to scale the campaign.

Household demographics

Household demographics, in many ways, represent the sweet spot for scalable campaigns that are privacy compliant. This data comes from civic sources — census; tax, building and motor registers — which means it’s vetted and validated. The data also has unmatched reach — matching up to 70% of impressions and events. This means that out of the gate, your client’s campaign can target the right people at scale. 

A key benefit with household demographics is that a single segment — say wealthy families who own their home and have more than one child in school — can be used across all channels, including web, mobile, in-app, CTV and audio. And depending on what your client is advertising, the data can filter out audiences that are not relevant or unable to purchase a product. For instance, if you have a client that is a renewable energy brand selling solar panels to end consumers, you can exclude users who are renters in apartment buildings.

Get in Touch

So while Criteo’s report shows that Google Privacy Sandbox is not quite ready for prime time, both publishers and advertisers still have options. As a publisher, you can attract advertising clients by telling better stories about your audiences, and as an advertiser, you can continue to target effectively by leveraging these audience insights. Get in touch with us to see how household demographics fit into your data strategy. 

To learn more or to ask questions contact our Customer Success Director, Jakub Skwarski – js@digiseg.io

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