With the privacy sandbox initiative, Google has initiated conversations around data privacy. Not to mention its announcement to phase out third party cookies. Moreover, the tech giant recently announced the expansion of the privacy sandbox initiative for the android operating system to limit third-party tracking and reliance on cross-app identifiers. As mobile ad spend in India is set to cross $2 billion in 2022, according to a report from IAS, this move will have a significant impact on advertisers in India. For Tejinder Gill, general manager, The Trade Desk, India, this move by Google does not come as a surprise as Android has come under pressure in disabling implicit data sharing. “We believe these moves do not diminish advertiser demand. In fact, demand for advertising that continues to offer access to richer data will only increase. It’s in everyone’s interest to support a transparent approach for the future that offers more explicit choice to consumers,”Gill added.
Along with focussing on privacy, Google is also planning to bring new tools and solutions to the free mobile app ecosystem, without disrupting it. “Privacy Sandbox and the steps within ensure that advertisers are able to target only on the basis of a subset of user’s Interest data with no access to users online action data. The move will increase all the CTA (call to action) optimised ad spends,” Preetham Venkky, President, 22feet Tribal Worldwide and chief digital officer, DDB Mudra Group. This is also a reason why advertisers will now focus on creating first own party data.
However, ad dollars can dip in revenue in the short-mid term. According to Venkky, performance marketing spends usually fetch a premium for media companies, for instance Google, Facebook, among others. The change will dry up or shrink this source of revenue affecting them in the mid and short term. “This will have a greater effect than what Facebook saw with Apple giving users the option not to be tracked,” Venkky added.
On the other hand, advertisers are expected to lose 15-25% of the revenue with post-Identifier for Advertisers (IDFA) changing due to lesser visibility on down funnel activity, and personalisation of users. “Advertisers will lose the ability to attribute revenue and experience the reduction of life-time value (LTV) and the effectiveness of LTV models without deterministic attribution. Moreover, remarketing campaigns to convert non-paying users from the middle funnel will also become challenging, leading to a drop in revenue,” Ishank Joshi, founder and CEO, Mobavenue Media Private Limited, said.
While Google builds and tests the new solutions, it will support existing ads platform features for at least two years. But the industry is not certain if a two-year timeline is enough for brands and advertisers to create a strong pipeline of first-party data. “Advertisers are better aware of the aggregated user segmentation and have built their business intelligence tools, database, and CRM that will help to adapt the changes faster,” Joshi added.
In its announcement blogpost, Google assured that the changes would not be as disruptive as some of its competitors. “While on the face of it, it might seem like it’s less disruptive, it’ll have a greater impact on Google’s revenue. Google and Facebook together control the most attention of users online, this will ensure that in the long term their revenue will return to normal levels as it operates practically as a monopoly,” DDB’s Venkky explained.
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