An announcement today by Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google that it would no longer support individual user tracking has put pressure on other stocks that rely on digital advertising revenue as investors consider the future of targeted advertising.
Back in mid-January, Google announced it would be phasing out support for third-party cookies in its Google Chrome web browser starting in 2022. Today the company released further guidance around those privacy-focused measures, saying it would “not build alternate [ways] to track individuals” nor use them in their products.
That’s a hard hit for other players in the advertising space, previously coalescing around the idea of replacing third-party cookies with hashed email addresses to continue tracking individual users while complying with Google’s new rules.
Today’s update sent those players back to the drawing board while highlighting broad uncertainty about the future of programmatic advertising. These concerns aren’t exactly new; the European Union’s General Data Protection Regulation, implemented in 2018, has already changed the way we interact with cookie tracking in the U.S., even if it’s just hitting “Accept All Cookies” on a popup.
However, this also isn’t the end of targeted ads, but an evolution. Google has said it will be using a “privacy sandbox” to help advertisers target groups of users, rather than specific individuals. Given the wealth of data that can be collected from an individual’s online interactions, group targeting may end up being much more personal than people realize.
Google’s decision to fully end support for individual user tracking is a big deal given the majority of internet users utilize its Chrome browser. The move comes as large tech companies face increasing scrutiny over their handling of user data.
On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.