What does it mean if we decide not to remove third-party cookies?

A surprise move that has major implications for his future. Internet Advertise Google. It has decided to abandon its plans to remove third-party cookies — those important files that track users’ activity on the web for Advertisers.

But what exactly are cookies? And what does Google’s decision mean for how you interact online and how you are “tracked” by the advertising industry?

CNBC explains what you need to know.

What are cookies and how do they work?

Cookies are small pieces of code that websites provide to a visitor’s browser. They remain as the person visits other websites.

These pieces of code silently track our online activities, collecting information about what we search for and what types of products we tend to buy, for example. They have become a key way for advertisers to control how they target people with online ads.

The practice of using third-party cookies to track web activity has helped fuel a large part of the digital advertising ecosystem, and advertisers still rely heavily on cookies as a tool to collect data about their customers.

About 40.9% of websites worldwide use cookies to collect data about users, according to data from W3Techs.

The backbone of advertising

“Third-party cookies are the backbone of online behavioral advertising. They’re how your products or brands track you online,” Matthew Holmans, a partner at law firm Cripps, tells CNBC.

“If you’ve ever wondered how it’s possible to search for a new pair of shoes online and then see the same shoes advertised on your favorite social media platform, the answer is simple: third-party cookies.”

User convenience argument

But cookies aren’t just a way to track users’ browsing habits. They’re also an essential part of how the modern web works. They play a crucial role in keeping users connected as they navigate from one website to another.

One argument for keeping cookies is convenience. Simply put, they can make web browsing more convenient for users, as ads displayed on shopping devices are tailored to their interests.

They also help keep the web free to use — many publishers have introduced paywalls and invested in sponsored content in response to the expected phase-out of cookies.

and the annoying counterargument

On the other hand, cookies have also become annoying for many users.

Privacy rules in Europe require websites to display boxes asking users which cookies they want to store on their devices. This results in the checkboxes we are now familiar with asking us to consent to cookies.

What alternatives does Google suggest?

Initially, Google tried to offer a more privacy-focused alternative to cookies.

The company launched the “Privacy Sandbox” initiative in 2019 to find a solution that protects user privacy while allowing content to remain freely available.

In 2020, Google said it would end support for these cookies when it found a solution that worked for users, publishers, and advertisers. The company had targeted early 2022 as the year this new alternative would be released.

One proposal involved so-called “federated group learning,” which would essentially place people into groups based on similar browsing behaviors, meaning only “group IDs” would be targeted, not individual user IDs.

However, the company has repeatedly delayed the timeline for phasing out cookies, citing feedback from the advertising industry that implementing these changes could mean less effective ad campaigns.

This issue is the main reason why Google has now decided to end the planned deletion of third-party cookies.

“Basically, Google admitted that the marketing industry wasn’t ready for this change,” Holman told CNBC.

“He also believes he can develop a feature in the Chrome browser that will give consumers more options.”

What is Google offering now and how will it work?

Google says it now plans to keep cookies. Rather than downplaying their importance, the tech giant will introduce “a new Chrome experience that lets people make informed choices about their web browsing.”

“We are discussing this new path with regulators and will work with the industry as it rolls out,” he said, without giving further details about his plans.

For now, Google’s move likely means that the way you interact with the web will remain largely the same. Users will still see checkboxes at the top of web pages asking if they want to accept all cookies or just the essential ones.

The implications are likely to be even greater for advertisers as valuable data marketers will continue to receive from tracking users on the web.

“The Internet will remain free”

“The first impact is that the internet will remain free,” Steve Silvers, executive vice president of Kantar, told CNBC.

“Without third-party cookies, website owners would struggle to figure out how to monetize their audience, which is one reason there has been such a rise in paywalled content in recent years,” he added.