The Interactive Advertising Bureau (IAB) Tech Lab, has identified several stark issues facing media companies, advertisers and the broader industry in adapting Google's Privacy Sandbox, the company's proposed alternative to cookie tracking, and has criticised the significant limitations and lack of transparency on offer with the next-gen technology.

The global digital advertising body's Privacy Sandbox Task Force has undertaken an in-depth analysis on the industry's adoption of Google's Privacy Sandbox. The focus was on exploring the implications of Google's plan to eliminate third-party cookie-based tracking from its Chrome browser and replace it with the Privacy Sandbox.

The analysis found the changes mandated by Privacy Sandbox will require substantial development and infrastructure investment costs for both buy and sell-side technology companies. Additionally, operational, business, financial, and legal processes for brands, agencies, and media companies will need extensive reworking.

Several key issues were identified for media companies, advertisers, and the broader industry face in adapting to the changes mandated by the Privacy Sandbox. These issues include temporary support for essential event-based impression and click counting, brand safety concerns, on-browser computing implications, and a lack of consideration for commercial requirements.

Off this analysis, IAB has detailed 45 specific use-cases, grouped into five programmatic advertising ‘pillars’, with both a technical assessment and potential business impact analysis for each use case.

The analysis was compiled by senior technical, operational, and data science leaders representing a diverse range of entities, including publishers, agencies, Supply-Side Platforms (SSPs), Demand-Side Platforms (DSPs), measurement companies, and other ad tech players across over 65 companies over six months. The evaluation focuses on the Chrome browser's Protected Audience APIs (PAAPI) but also touches on Topics, Private State Tokens, Attribution Reporting, and Fenced Frames.

"Embracing Google’s Privacy Sandbox is a seismic shift in the advertising landscape, departing from the industry’s trajectory over the past 25 years,” said Anthony Katsur, CEO, IAB Tech Lab. “Our findings highlight that the industry isn’t ready yet and identify multiple challenges to implementation due to limitations in accomplishing key advertising objectives. Chrome is focused on providing discrete components that support aspects of use cases, but which ultimately cannot be assembled into a whole that provides a viable business foundation.”

Of great concern to the IAB is that Privacy Sandbox and its associated processes suffer from a lack of transparency for publishers.

"Its aim to replicate the efficacy of third-party cookies has not been realised. This shortfall undermines publishers’ capabilities to execute numerous vital advertising scenarios and support significant first-party use cases,” said General Manager Advertising & E-Commerce, Axel Springer, Robert Blanck.

The IAB Tech Lab is inviting industry stakeholders to participate in a 45-day period for public comments, open until March 22, 2024.

Following up the US report, IAB Tech Lab's Tech Lead for Australia, Jonas Jaanimagi, has published a summary of the in-depth analysis, along with his three key recommendations for local marketers and agencies: Engage, Test & Learn; Resource Adequately; and Collaborate Effectively.

"We continue to recommend that industry take the forthcoming changes seriously and seek to research and test for the portfolio of future-proof approaches that are both currently available and in development," said Jaanimagi. "Ensure that you have the right people in place internally that can understand the changes, ramifications to your business and can review the various options available that best meet your needs. This constructive feedback is the continuation of a process that requires local businesses to have competent people engaging, participating, and contributing.

"Existing in a bubble isn't practical when building for change at this scale. Look to collaborate with your partners, clients and across the industry through events, partner workshops and dedicated industry body councils and/or working groups. At IAB Australia we have several collaborative groups engaged in initiatives related to preparing our members for both the technical and regulatory changes that are forthcoming," he added.