Why Google Update on Chrome is Bad for Businesses
Google recently announced that they are banning the use of third-party cookies and individual tracking for advertisers on the Chrome browser. For businesses, and really everybody except Google, this new update is bad news.
In this week’s On The Air segment, Luis Alvarez, CEO of Alvarez Technology Group, discusses what exactly this update means and its implications. Alvarez explains what these changes mean for businesses, customers, and Google itself. He also breaks down why advertisers are understandably frustrated by this update.
What This Google Update Means for Consumers
To explain what a third-party cookie is, Alvarez uses the example of needing a toaster. Searching on Chrome for a toaster and then being followed around by targeted toaster ads for weeks and months after the first search. Even after you buy a toaster, advertisers still think you may want a toaster, so they keep showing you these targeted ads. With this new update, Google is blocking advertisers’ ability to track your searches.
Given how annoying this can be to consumers, this update may initially seem like good news. However, Alvarez points out that this may not actually be the case. Targeted ads following consumers around will likely still happen even with the disabling of third-party cookies. You may not even notice a difference in your browser. The targeted ads will just come from a different source.
Google Holds All the Power
Although Google is banning third-party cookies, this only means that they are stopping other companies from using people’s search data. Google themselves will still be able to use this data. Even worse, Google will now have full control of this data and can still use it however they want to. This action only takes the advertising power away from other businesses. Alvarez explains that Google is monopolizing its power which is not good for consumers or other businesses.
Why Businesses are Rightfully Angry About This Google Update
As an advertiser, this news is alarming. This update means a loss of advertising power in the future, as well as a massive loss from your recent advertising efforts. Alvarez explains that many businesses recently sunk precious time and money into targeted ad campaigns on Google during the pandemic. Companies build whole sales processes that rely on tracking and third-party cookies. With Google’s update, these efforts are made meaningless. Without this resource, advertisers have to rethink their methods or start completely over. Alvarez expresses compassion for the businesses that recently spent millions of dollars on sophisticated tracking systems based on third-party cookies that will soon stop working as Google rolls out these changes.
Alvarez also points out other implications of this Google update. He mentions how the impact of this news is already visible in the stock market as the valuations of companies that are most affected begin to fall. Investors see that this monumental block to advertisers is detrimental to a company’s value.
Companies are expressing valid frustrations with Google. Not only is Google limiting small businesses’ advertising power, but Google is also expanding its own control. The one silver lining may be that alarm bells may start ringing with this act of monopolization by Google. The federal government may rightfully see this as a monopolization effort. Alvarez stresses that although Google claims this action was done for the protection of their users’ data, we know better than to take this at face value. He also worries that other browsers will follow suit and start disabling their third-party cookies.