Criteo: Privacy Sandbox isn't ready yet, but it could be if Google makes certain changes soon.

Criteo has some good and bad news about the Chrome Privacy Sandbox, based on their latest testing.

First the bad news: if Google were to block third-party cookies today and implement the current version of its Privacy Sandbox, publishers would see their ad revenue on Chrome fall by roughly 60%, on average.

But the good news, or at least the not-so-bad news, is that the Privacy Sandbox could become a viable alternative to third-party cookies for advertising purposes if Google agrees to make significant changes, said Todd Parsons, chief product officer at Criteos.

“We went through some very rigorous testing and made specific requests to Google to improve the composition of their APIs,” Parsons says. So instead of building something entirely new, we're just working with the product as it was designed and tweaking it in a way that doesn't break it, which gets us pretty close to a minimum viable product.

That's a stark difference from the IAB Tech Lab's take on the Privacy Sandbox in an analysis of APIs released in February. At the time, Tech Lab CEO Tony Katulle said the Privacy Sandbox was ineffective, not robust enough to support most basic digital advertising needs and, in some cases, simply broken.

Stress testing

But Parsons said Criteo wouldn't have dedicated so much time and engineering resources to testing the Privacy Sandbox if it didn't think the concept had value.

Otherwise, we would have stopped investing a long time ago, he said.

Criteo was one of the earliest Privacy Sandbox testers, dating back to 2021 when APIs were still named after birds.

The latest sandbox test, which the company announced on Thursday, took place between mid-March and mid-May and involved roughly 18,000 advertisers, 1,200 publishers and 100 million ad impressions per week.

Criteo analyzed three groups: one that removed third-party cookies and used the Privacy Sandbox in combination with contextual targeting and publisher first-party data, a control group that used third-party cookies without the Privacy Sandbox, and a third control group that only used contextual targeting and first-party data.

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What did Criteo discover?

Let's roll slowly

At first glance, the results are alarming.

Criteo revealed that publishers without access to third-party cookies saw a massive 60% drop in revenue on Chrome, and also saw load times increase by over 100% for ads rendered in sandbox traffic.

Furthermore, in its information to the CMA, Criteo found that the Privacy Sandbox could create significant benefits for Google’s advertising business, potentially increasing Google Ad Manager’s market share from 23% to 83%.

(Criteo, of course, shared the report with the UK Competition and Markets Authority, which is tasked with assessing whether the Privacy Sandbox API creates a competitive risk.)

But Parsons said getting everyone in the online advertising ecosystem, including publishers and other ad tech vendors, to participate in more rigorous testing would help level the playing field, at least to some extent.

He said many ad tech vendors have only done light testing of the feature, and adoption of the Privacy Sandbox by publishers remains below 55 percent.

But given the multiple delays to Google's third-party cookie phaseout, the lack of a detailed roadmap, and the need for companies to adapt their entire ad infrastructure to a complex new developer toolkit, it's not surprising that testing has been only intermittent across the industry.

“We rebuilt our entire performance pipeline, not just the auction and bidding component, but the targeting component, the product recommendation component, the creative, the measurement,” Parsons says. In other words, they literally rebuilt the pipeline from end to end.

Please give me a little something in return

We hope that Google will respond to this effort by rebuilding the Privacy Sandbox API based on feedback.

And there's precedent for this: Parsons said Google has implemented Criteos' ideas for changes to the Privacy Sandbox in the past, including adding a server-side component to the Privacy Sandbox and other tweaks that ultimately led to replacing FLoC with the Topics API.

Criteo's latest offerings fall into four main categories: performance features, ways to create more valuable audiences, what Criteo calls key features to prevent fraud and ensure transparency, and governance-related calls to make the rollout more efficient and organized.

[Click here for a full list of Criteos proposed changes.]

All of the changes proposed by Criteos, such as changes to the PAAPI auction integrity to prevent bid tampering and clarifying the connection between the deprecation of third-party cookies and the adoption of the Android Privacy Sandbox, are in the spirit of helping Google release a version of its product that doesn't completely disrupt the online advertising ecosystem.

Parsons said that Privacy Sandbox, which is arguably the biggest product rollout in the history of ad tech, isn't ready for release in its current form.

“For example, we've never shipped a product that was running at a 60% deficit compared to the alternative. If we had, we wouldn't have a job here,” he said.

Updated June 27, 2024, 3:15 p.m.

A Google spokesperson issued a statement in response to Criteo's report.

We're pleased to see more companies taking advantage of Privacy Sandbox and other privacy-enhancing technologies. However, publishers typically work with dozens of demand sources, so we can't predict a publisher's performance based on the effectiveness of a single buying platform. Additionally, while we expect performance numbers to evolve, they currently don't reflect how the entire ecosystem will perform in a real market, which won't exist until adoption grows along with third-party cookie-less traffic. We hope the ecosystem continues to share valuable insights and feature requests for Chrome and the industry.

Sources 1/ https://Google.com/ 2/ https://www.adexchanger.com/privacy/criteo-the-privacy-sandbox-is-not-ready-yet-but-could-be-if-google-makes-certain-changes-soon/ The mention sources can contact us to remove/changing this article

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