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It’s been another attention-grabbing week in the weird and wonderful world of Google, as it announced a major change to its plans and also revealed further revenue growth. Affiliate Leaders looks at what it all means.
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There are few companies that are as central to the gambling affiliate ecosystem as Google. There are also very few companies that are as contrary, or as profitable, as the search giant, all of which has been illustrated in the past few days.
For those in the marketing world, the big news was that the ‘Cookiepocalypse’ has been cancelled (well, mitigated anyway), but the company’s quarterly results also provided an interesting hint as to how far AI has disrupted search.
A new solution for cookies
Google, under pressure from privacy campaigners and regulators, has spent the past four years working on a well-publicised plan to deprecate third-party cookies in Chrome. It has now reversed its decision – sort of.
Its Privacy Sandbox program was launched in 2019 with the grand and wordy vision of having “the goal of finding innovative solutions that meaningfully improve online privacy while preserving an ad-supported internet that supports a vibrant ecosystem of publishers, connects businesses with customers, and offers all of us free access to a wide range of content”.
Or to put it more succinctly, to find a way of getting rid of tracking cookies without destroying online businesses.
Having struggled to identify a way to remove cookies and keep the internet working in a fashion that users would recognise, Google has now partially backtracked and announced something it described as a “new path”.
Anthony Chavez, VP – Privacy Sandbox, explained that while Google remains optimistic that the program can deliver enhanced privacy for users, it also accepts that the previously planned transition “requires significant work by many participants and will have an impact on publishers, advertisers, and everyone involved in online advertising”.
“In light of this, we are proposing an updated approach that elevates user choice,” he continued. “Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators, and will engage with the industry as we roll this out.”
For those marketers and ad-tech specialists who have already invested time and money in preparing for the disappearance of cookies, the initial reaction may have been one of intense frustration. However, it appears their hard work may not have been wasted, as the Privacy Sandbox APIs remain available and Chavez advised that “it remains important for developers to have privacy-preserving alternatives”.
Many others would have greeted the announcement with relief and a sense that they may be able to continue with business as usual. That relief is likely to be short-lived though, lasting only until Google rolls out its solution for giving users the choice of opting out of third-party cookies (although in true Google fashion, it has not given a timeline for that).
Giving Chrome users the final say on whether to accept cookies has the potential to cause significant changes to the data available for analysis and modelling. That, in turn, is almost certain to lead to major disruption to advertising strategies.
It is also clear that the direction of travel remains a transition towards enhanced privacy. A cookie-free world – or at the very least, a low-cookie world – is still very much on the horizon.
March of the chatbots
Sundar Pichai, CEO of Google’s parent company Alphabet, was also questioned about the cookie flip-flop during the Q2 earnings call. He, as you would expect, trotted out the company line.
“On third-party cookies, given the implications across the ecosystems and considerations and feedback across so many stakeholders, we now believe user choice is the best path forward there,” he said. ”And we’ll both improve privacy, by giving users choice, and we will continue our investments in privacy-enhancing technologies. But it’s obviously an area we will be taking feedback from the players in the ecosystem. And we are committed to being privacy-first as well.”
Pichai was speaking after Alphabet announced second quarter revenues of $84.7 billion, up 14% year-on-year – which would be a mightily-impressive performance for most businesses, but failed to please the markets and the company’s share price fell by 5% in a day.
Despite Alphabet’s push into cloud services, AI and devices, it was advertising that remained the largest contributor to the company’s growth. Google search ads generated $48.5 billion of the $64.6 billion total ad revenue in the quarter.
Much has been made of the potential for AI chatbots to disrupt Google’s search model. It is hoped that rather than delivering a traditional list-style SERP, they can take users directly to the answer to their query or at least to a more structured and accurate set of suggestions.
Alphabet’s results demonstrated that the disruption certainly has not happened yet, and suggested that a large-scale change to user behaviour from Google Search to chatbots may still be some way off. In the circumstances, the decision to push back the removal of third-party cookies and continue to offer search advertisers – and, as a result, users – the service they are familiar with makes financial sense.
The predicted migration towards AI-generated search has not been helped by the problems with the US rollout of Google’s AI Overviews, which were plagued by inaccurate results – often based on user-generated content or satirical websites – in their early days. And anyone who has attempted to use Google’s Gemini AI-assistant for betting-related searches may well have been left slightly confused and wondering what the hype is about.
Google has no intention of changing course on AI though and Pichai used the earnings call to reveal that AI Overviews would soon be launched in more countries. He also insisted that the company had seen “positive trends” in usage and user satisfaction.
“People who are looking for help with complex topics are engaging more and keep coming back for AI Overviews,” Pichai added. “And we see even higher engagement from younger users, aged 18-24, when they use Search with AI Overviews.
“We’re continuing to prioritise approaches that send traffic to sites across the web. And we’re seeing that ads appearing either above or below AI Overviews continue to provide valuable options for people to take action and connect with businesses.”
With Google fully committed to AI and competition coming in the form of Perplexity and OpenAI’s SearchGPT, there is little doubt that search will undergo major changes in the near future. It just remains to be seen when and which marketers can best adapt to the upheaval.
