It’s the end of the beginning. Stop mourning the cookie and get building

That moment signaled the end of the beginning. The last four years have represented the first few chapters in what will ultimately be an epic novel - moving the digital ad industry from the unrestricted user data sharing of the past to a much more privacy-preserving ecosystem.

The Privacy Sandbox is often derided as overly complex, missing key features, poorly documented, and anti-competitive. There’s truth to all of those criticisms. I often describe the Privacy Sandbox, with apologies to Winston Churchill, as “the worst possible replacement of third-party cookies, except for all of the others.”

This is our lifeboat, so we better get used to it.

The entire industry needs to rally behind pushing Google to improve the technologies while also accepting that the Sandbox, if it can be implemented fairly to users and sites, is a far better fate than a Chrome that works like Safari.

The stakes are high.

Our early data from testing Chrome’s 1% 3PC deprecation shows a 30% drop in monetization for publishers. While we don’t have advertiser performance data yet, there tends to be a very high correlation between those two metrics. And while much technology still needs to be built, adopted, and deployed to push those numbers in the right direction, performance could easily go in the wrong direction. A 30% drop in advertiser performance might cause many advertisers to move deeper into the walled gardens. And a 30% drop in publisher monetization of Chrome users could be the death knell for many publishers already struggling.

The task is Herculean: rebuilding the infrastructure of the digital ads ecosystem. The existing infrastructure has been developed over nearly 30 years, with massive investments across many industry participants. Thousands of companies execute countless activities on behalf of publishers and advertisers to drive advertiser performance and maximize publisher revenue. Usually.

Some of those processes will work fairly seamlessly in the future. Still, many of them need to be completely re-imagined and rebuilt to meet the requirements of the Privacy Sandbox and, ultimately, the demands of regulators and real people. A system that today relies on the availability of user data on a server will cease to function when the only user data in the Sandbox is available to the browser and protected from others.

Part of the challenge will be rebuilding, but part will be the compromises that need to be made. The Privacy Sandbox allows for some ad ecosystem requirements to be matched nearly one-for-one. However, some of today’s capabilities are incompatible with user privacy promises, and some degradation needs to be accepted. The industry must decide what information is an absolute requirement for business operations and what data is acceptable to restrict.

Google will also need to compromise. Many of the criticisms lobbed at the Sandbox are real. Currently, the reporting from the Sandbox doesn’t meet some key publisher and advertiser requirements and presents brand safety and anti-fraud challenges. The Sandbox needs to support video ads using the standard VAST requirement. Other changes are needed to ensure a competitive marketplace.

All of this will cause disruption and pain. Many companies loathe to throw out the infrastructure they have built and replace it with something that won’t perform as well. But there is precedent: Apple’s App Tracking Transparency transition a few years ago led to parts of the mobile app ecosystem being rebuilt around SKAdNetwork. The Sandbox has much more advertiser functionality and value than SKAdNetwork but requires significantly more work to get those benefits.

However, the disruption may have some positive outcomes besides increased user privacy. My snarky “Usually” earlier in this article refers to the companies in this industry that don’t provide value to publishers or advertisers; they purely extract value for themselves. One possible side outcome of the industry’s adoption of the Sandbox could be putting an end to these extractive companies. I, for one, won’t shed a tear for the failure of some adtech companies that only extract value from the ecosystem.

On the other hand, this epochal change provides opportunities for companies to innovate in previously impossible ways. Companies leaning into the Sandbox and privacy stand to be the next era’s winners. New entrants could thrive in a more level playing field. There are already a number of transformative technologies being tested that are highly novel and could significantly shift power dynamics in the industry.

Significant work has been done in the last few years to aid in this transition; the next few years will require much more work to make this enormous changeover. Assuming 3PCs are deprecated later this year, several transitional elements remain in the Sandbox. Some more onerous Sandbox requirements, such as Fenced Frames and the deprecation of event-level data, aren’t required for several years.

And many potential monkey wrenches could be thrown into the timeline. The UK Competition and Markets Authority could conclude that the Sandbox isn’t ready for deployment because it grants Google new anti-competitive capabilities. Google could decide that some features aren’t ready or clear yet. We shouldn’t rely on any of these events occurring, but even though more delays will cause different problems, more time would be good for everyone’s readiness.

The end of the beginning is here. The time is now for the winners of the future to stop complaining and get building. We can make a more private advertising ecosystem that drives great results for advertisers and provides funding to publishers to support their businesses. It’s time to build.