What is the latest Google news on cookies for top inventory technology?

Analysts rely on Google’s latest guidance on its promise not to use technologies that track people individually on the Internet. Some analysts say their views have not changed. But others at BMO downgraded a stock of advertising technology, noting that “it’s too hot in the kitchen.”

Google said in a blog post on Wednesday that it will use “privacy technologies” based on methods such as anonymizing or aggregating data after it stops accepting cookies. Cookies are small pieces of code that websites deliver to the visitor’s browser and remain with them as that person visits other sites. They were used to track users on multiple sites to target ads and see how it works. Google announced plans in January 2020 to end third-party cookie support, which feeds much of its digital advertising ecosystem, in its Chrome browser within two years.

The blog post raised questions from the industry about the future of advertising technology players’ initiatives, which worked on ways to balance consumer privacy while maintaining personalization in advertising after they can’t use cookies.

Following the announcement, here’s what analysts say about shaking up advertising technology companies, including Google:

Bank of America analysts said Thursday that Google’s comments “suggest that app developers and publishers will need to move away from all individual identification alternatives, which could make Google’s ‘privacy sandbox’ capabilities even more valuable in the industry.”

Analysts cite figures from Jounce Media, estimating that 40% of the money coming back from advertisers to open internet publishers goes through Google’s ad buying tools.

KeyBanc analysts said their real question is whether Google intends to restrict alternative identifiers in Google products. They said such a move would “clearly favor Google over the open internet and be an interesting dilemma for regulators – how should consumer privacy be balanced with market power?”

Google said on Wednesday that its blog post was about how its own advertising products will work and that it will not restrict what can happen on Chrome by third parties. The company said it will not use Unified ID 2.0 or LiveRamp ATS, two tools it says will help target ads in a more privacy-conscious way, but will not specifically talk about any initiatives. Uncertainty still arises as to whether Google will restrict that activity on Chrome in the future.

“In our view, the inherent problem with current efforts to regulate Internet companies is that efforts to provide more privacy simply make the largest companies stronger,” KeyBanc analysts said. “Until the trade-offs between confidentiality and competition are taken into account, we suspect that the regulation risks stifling competition.”

Macquarie analysts said the move “more clearly defines the roles that Google will play in online advertising than the roles of Internet advertising technology companies such as The Trade Desk, LiveRamp and Criteo.”

“It seems to put Google in a different part of its ad targeting business – which it can afford given its size and probably needs to do so given the concern for privacy and increased government control over his methods, “Macquarie analysts said. “But it’s still building walls around its garden, because any advertiser working with Google’s ad serving technology will have to adopt Google’s new API-based protocols – which target consumers in a very different way.”

Shares of Google rose nearly 1% after the market opened on Thursday.

KeyBanc analysts said Trade Trade will challenge changes to Google’s Chrome browser if it restricts the use of alternative identifiers.

Trade Desk led to the formation of Unified ID 2.0, a framework that will be based on email addresses that are encrypted and encrypted from consumers who give their consent. Trade Desk has painted the identifier as a superior alternative to cookies, which better explains to consumers how relevant it is to finance advertising content and the experiences they read or use on the internet. The Trade Desk in February passed control of Unified ID 2.0 to a nonprofit called Prebid.

“In short, Unified ID 2.0 is once again putting privacy in the hands of the consumer, which seems to be in line with the privacy goals and value sharing of the open internet,” KeyBanc analysts said. “If Google is able to restrict alternative IDs, then Google has become even stronger in the advertising industry.”

Macquarie analysts said Wednesday that the ad appears to restrict The Trade Desk’s ability to buy ads using IDs on Google’s exchange or supply platform.

“… But that only encourages TTD to work directly with publishers and in a wide range of others. [supply-side platforms] through private market transactions, “they wrote.” We expect Unified ID 2.0 to continue to grow as an agnostic industry standard for devices and browsers, with [opt-in] and consent between publishers and consumers, and TTD will continue to leverage its position as the largest independent DSP by far to help advertisers reach consumers on the open web beyond Google. ”

A Trade Desk spokesman said in a statement that there was “a significant industry focus on building a new identity solution that would preserve the value of relevant advertising while protecting consumer privacy”.

“Unified ID 2.0 puts the consumer in the driver’s seat, makes sure they are not identifiable, and gives them control over how their data is used,” he said.

Trade Desk stock fell 5% on Thursday morning.

BMO downgraded LiveRamp on Thursday in a note titled “Too Hot in the Kitchen.”

Analysts said they believe Google’s confirmation that it will not integrate “alternative identifiers” could slow the sales cycle of LiveRamp, as players in the ecosystem are re-evaluating the best way forward this year.

In late October, LiveRamp said Unified ID 2.0 will be available to publishers through its platform, which it says helps advertisers target real people instead of profiles or cookie-based devices. LiveRamp has what it calls the “Authenticated Traffic Solution,” which it says allows consumers to choose to take control of their data. On the other hand, brands and publishers can access this data. It is the company’s solution to deal with the depreciation of third-party cookies.

“We believe that more clarity and revenue acceleration are possible in 2022 (when GOOG completes its cookie roadmap, among others), but visibility today is limited,” BMO analysts wrote. They said the industry is still waiting for Google to provide more clarity on how it will handle alternative options.

BMO analysts said they believe the impact of short-term revenue for LiveRamp is likely limited, but warned of a lower likelihood of revising upward estimates.

Macquarie analysts said the type of announcement that came from Google on Wednesday usually determines the volatility of stocks over the perceived risk of the title. “But we believe that while this is yet another twist in the evolving landscape of advertising technology, the outlook for TTD, RAMP and CRTO is more or less unchanged.”

In a blog post responding to the news, LiveRamp said that Google’s ad is in line with what it claimed. LiveRamp claimed that its ATS solution encompasses the ideas of primary consumer relations, transparency and consumer control.

“In short – marketers will be able to continue to buy people-based inventory on the DV360 using LiveRamp,” the post says. DV360 is a Google advertising technology product.

LiveRamp stock fell 7.7% on Thursday morning.

Advertising technology company Criteo said in a statement that Google’s post on Wednesday “does not change or affect Criteo’s plan and roadmap in any way.”

“As I said earlier, we continue to invest in our first-class media network, as well as in contextual and cohort-based advertising, which allows marketers to engage effectively with their customers in a safe and secure manner. consented to confidentiality, ”a company spokesman said. “User permission and consent are at the heart of our solution.”

At the end of October, Criteo announced its involvement in the collaboration with Unified ID 2.0. The company said it will provide the connection solution and help develop a “transparency portal” that gives consumers more control over their advertising experience.

Macquarie analysts said the company’s outlook on Criteo remained unchanged following Google’s announcement, noting that Criteo has actively contributed to Google’s privacy initiatives.

BMO analysts raised their target price from $ 25 to $ 45 and said they were building confidence in Criteo’s change efforts as it repositioned its business with a strong reorientation intensity.

“For CRTO, we expect the core use case for re-targeting to continue to attract questions for investors,” BMO analysts said. “But we continue to believe that CRTO has developed alternative techniques to effectively reach consumers who have previously shown interest in an advertiser’s products.”

BMO analysts said that going further, the changes could require a shift from one-to-one targeting to sending messages to a group of users who have shown similar interests in an advertiser’s product.

“When combined with strong machine learning, we believe that the CRTO can continue to demonstrate improvements in its core business by helping advertisers remarket interested customers,” they wrote.

Criteo shares fell 5.4% on Thursday morning.

CNBC Michael Bloom contributed to the reporting.