Shares of Trade Desk (TTD) and LiveRamp (RAMP) moved higher in morning trading after Google (GOOGL) delayed a plan to phase out third-party cookies.
COOKIE DELAY: Vinay Goel, the Privacy Engineering Director at Google's Chrome unit, said in a blog post on Thursday that the company will delay Chrome’s plan to phase out support for third-party cookies. "While there’s considerable progress with this initiative, it's become clear that more time is needed across the ecosystem to get this right," Goel said in the blog post. The executive continued by saying that "Today, Chrome and others have offered more than 30 proposals, and four of those proposals are available in origin trials. For Chrome, specifically, our goal is to have the key technologies deployed by late 2022 for the developer community to start adopting them. Subject to our engagement with the United Kingdom's Competition and Markets Authority and in line with the commitments we have offered, Chrome could then phase out third-party cookies over a three month period, starting in mid-2023 and ending in late 2023." He said that "After this public development process, and subject to our engagement with the CMA, our plan for Chrome is to phase out support for third party cookies in two stages," with the first stage beginning in late 2022 and the second stage commencing in mid-2023.
Chrome now plans to phase out support for third-party cookies over a three month period finishing in late 2023, Goel said. The company plans to provide a more detailed schedule "soon," with Goel adding that it will be updated regularly "to provide greater clarity and ensure that developers and publishers can plan their testing and migration schedules."
Goel concluded the post by saying: "We believe that the Privacy Sandbox will provide the best privacy protections for everyone. By ensuring that the ecosystem can support their businesses without tracking individuals across the web, we can all ensure that free access to content continues. And because of the importance of this mission, we must take time to evaluate the new technologies, gather feedback and iterate to ensure they meet our goals for both privacy and performance, and give all developers time to follow the best path for privacy."
Google previously announced in January 2020 that it planned to end support for third-party cookies within two years.
WHAT'S NOTABLE: Earlier this month, the Competition and Markets Authority, the U.K.'s competition regulator, secured commitments from Google to address concerns about Google's proposal to remove third-party cookies on Chrome. The development followed an investigation opened by the CMA into Google’s self-styled “Privacy Sandbox” earlier this year. The CMA could also reopen a fuller investigation if it’s not happy with how things are looking at the point it orders any standstill to stop Google tracking cookies.
Commenting in a statement, Andrea Coscelli, the CMA's CEO, said that "The emergence of tech giants such as Google has presented competition authorities around the world with new challenges that require a new approach... If accepted, the commitments we have obtained from Google become legally binding, promoting competition in digital markets, helping to protect the ability of online publishers to raise money through advertising and safeguarding users’ privacy."
DEPENDENCY ON COOKIES: In March, Oppenheimer analyst Jason Helfstein noted that Google's Chrome policy changes would have most impact on independent Supply Side Platforms, or SSPs and publishers, with more modest impact on Demand Side Platforms, or DSPs. Helfstein argued that while the alterations are broadly negative for those reliant on the open web, they are bullish for walled gardens -- Facebook (FB)/Google/Twitter (TWTR)/Snap (SNAP)/Amazon (AMZN)/Roku (ROKU) -- which become increasingly attractive to advertisers seeking deeper audience targeting. While Trade Desk's UID 2.0 will be blocked in the Google ecosystem, it is unclear if Chrome can block this data if user permission is granted through 3P platforms, he added. The analyst believes it is too soon to tell the impact ad policy changes will have on e-commerce.
Meanwhile, KeyBanc said at the time that Trade Desk stands to benefit from share gains as UID 2.0 adoption increases and traction with connected TV and retailer partnerships further reduce the dependency on cookies.
PRICE ACTION: In morning trading, shares of Trade Desk gained almost 11% to $72.62, while LiveRamp rose about 6% to $47.58. Other companies that may be impacted by the news include PubMatic (PUBM), Criteo (CRTO) and TechTarget (TTGT).
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