Sunday, July 21, 2024

NextRoll VP on Google’s Privacy Sandbox: ‘It’s going to keep on changing,’ so start experimenting now

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Start experimenting with Google’s Privacy Sandbox now, advised Andrew Pascoe, vice president, data science engineering, at NextRoll.

“The Privacy Sandbox is complex,” he said. “You have to dig into the specs. It takes multiple times of reading it before it all clicks together. It’s gonna take time, and the longer you put it off, the more complex it will get and you’re going to make it harder for yourself in the long run.”

Pascoe’s warning comes on the heels of the digital advertising industry sharing feedback on the Privacy Sandbox as individual stakeholders conclude their tests.

  • After an eight-week test, Criteo concluded the Privacy Sandbox falls short of Google’s goal of limiting publisher revenue lost to 5%. Instead, Criteo believes if third-party cookies were deprecated today, publishers would lose an average of 60% of their revenue from Chrome.
  • The Interactive Advertising Bureau (IAB) Tech Lab said that the current Privacy Sandbox would “restrict the digital media industry’s ability to deliver relevant, effective advertising” and “throttle” smaller brands’ ability to compete.

While many believe the current Privacy Sandbox needs tweaks before it can function as an alternative to cookies, Pascoe said that’s not surprising.

“Yes, there’s still work to be done. But that’s normal in software development,” he said. “I’ve been in these Privacy Sandbox meetings for four years. We’ve seen every evolution of the specs, we’ve seen every change. It’s going to keep on changing.”

NextRoll recently completed its eight-week test of the Privacy Sandbox, focusing on the solution’s Protected Audience API (PAAPI), Topics API, and Attribution Reporting API (ARA). Findings include:

  • The Privacy Sandbox campaigns had CPMs three times higher and cost per clicks (CPCs) two times higher than the control group. This might be because NextRoll had to increase its bid prices to purchase more data due to the low volume of PAAPI impressions.
  • Using the Topics API instead of third-party cookies decreased the predictive accuracy of NextRoll’s machine learning models, suggesting the API cannot currently replace the effectiveness of third-party cookies.
  • Across all NextRoll customers, only 75% of page visits that supported third-party cookies also supported Topic’s interest groups, illustrating a decrease in audience size that “likely negatively impacted performance,” Pascoe said.
  • The average bid response time was five times above NextRoll’s upper limit of latency for its third-party based bidder.
  • On a positive note, NextRoll found the Sandbox’s aggregation service to be “scalable and performant” and able to handle reports quickly at a reasonable cost.

What’s next? One of NextRoll’s recommendations for Privacy Sandbox improvement is to drive more publisher adoption of the solution.

“The more publishers that adopt the Sandbox, the more inventory available, which will lower CPMs,” said Pascoe. “And as there’s more uptake in the market, not only will we learn more about the Sandbox, but we’ll see how the market will function [without cookies] as a whole.”

Pascoe believes Google will address any major issues with the Sandbox before moving forward with cookie deprecation. This means adoption of cookieless solutions may be more gradual.

“People have to learn to work with it,” he said. “And we’re willing to help—we want everyone to figure this stuff out.”

  • Since Google has not set a concrete date for cookie deprecation, adoption of cookieless solutions will be driven by competition and regulatory pressure, said Pascoe.
  • “Players like us care about consumer privacy,” he said. “Consumers are starting to demand it. And I think governments are going to start to demand it, too.”

This was originally featured in the EMARKETER Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.

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