As the heated discussions between Google and vs. third-party online ad vendors continue, the industry as a whole begins to question whether Privacy Sandbox will destroy the digital video ad ecosystem as we currently know it. 

Since the beginning of 2024, a lot has happened in digital advertising, and yet in the cookie deprecation segment, it seems that nothing has changed much. Google still emphasizes the importance of the market-wide testing and further implementation of its Privacy Sandbox solutions, while preparing to advance with the cookie phase-out. Meanwhile, its opponents continue ringing the alarm bell worrying that Google’s offered alternative can break the entire programmatic ecosystem, instead of providing a viable cookie alternative to online advertising businesses.

Top Newsmakers on the Cookie-Subject from Winter 2024

One of the major newsmakers on the topic in the first two months of 2024 was the release of IAB Tech Lab’s Privacy Sandbox testing results, which unveiled devastating perspectives for the future of the entire programmatic video advertising industry. 

And in the UK, its Competition and Markets Authority early in February 2024 concluded that Google must not proceed with the cookie deprecation until it eliminates the significant downsides of Privacy Sandbox. In particular, as stated in the CMA report, Google has reserved an opportunity to take leverage of End users’ Personal Data while closing competitors’ access to it (and optionally opening it, based on its sole business interests). In addition, the report emphasizes that Privacy Sandbox provides fewer effective measures for filtering invalid traffic and tackling other types of fraudulent activities to advertisers and publishers. 

More importantly, the first stage of cookie phase-out has already demonstrated publishers’ inevitable loss of ad revenue, particularly when it comes to Prebid Demand. Namely, in one of the studies publishers have lost ~30% of revenue opportunities per impression on average, with the estimated highest bidders’ CPM dropping by almost 60% in some cases.   

Non-surprisingly, this recent tide of news couldn’t help but make online ad businesses scratch their heads wondering which share of video ads will stop displaying correctly across platforms sometime at the end of 2024, and whether the industry in its current state, let alone shape, will survive the complete cookie switch-off.

Will Privacy Sandbox Kill VAST Ads? 

The key reason programmatic ad vendors should worry primarily lies in two facts. The first one is, Google’s Protected Audience API (PAAPI) doesn’t support the conventional use of VAST tags, at least to the extent that ensures they’re functioning properly. The second one is, as IAB Tech Lab warns, none of the video ads would be rendered the way they can be now upon the full-scope shift from iframes to the so-to-speak fenced frames in 2026 (or later).  

In particular, according to IAB Tech Lab’s published report, the traditional use of VAST tags is severely limited in the Privacy Sandbox environment due to extra technical implementations and passing of the information back and forth between an iframe and the inventory seller’s parent frame,  required for the programmatic auction to work properly and render video ad creatives correctly, which potentially leads to the added page latency. 

It also remains unclear how VAST error handling will work, making video ad display in a whole a more complex and more challenging task to handle. 

In case with standalone video ads (the inherent outstream video), which imply the launch of video ad creatives without accompanying video content, it looks like the situation is slightly better. Namely, Privacy Sandbox currently allows running video ad creatives using a conventional iframe and communicating it with the parent (outer) frame on a publisher’s website, which enables the timely closing of the video player upon ad completion, among other things. 

However, chances are this implementation won’t work in fenced frames, which are expected to become a required change to iframes sometime in 2026 or later. The trick is, the concept of fenced frames actually implies restricting such communication. 

This also puts limitations on publishers’ independent reporting capabilities, such as their ability to track ad events (i.e. ad start, 1st quartile played, etc.), as well as degrades the support of the full scope of second price auction capabilities, limits competitive ad separation and frequency capping on the individual level.

And on the Bright Side… 

Well, the supposed silver lining is that Privacy Sandbox should support the traditional OpenRTB implementation, but the loss of cookies will definitely have a negative impact on the overall audience addressability

More importantly, the actual silver lining is that despite its publicly unchanged position regarding plans to completely switch off third-party cookies in Chrome in H2 2024, Google will inevitably need to take a step (or two back) with these plans in view of the unprecedented industry backlash it’s currently facing. 

And while it’s unclear whether the deprecation will be eventually postponed once again, the jury on the future of online video advertising as we know it is definitely still out.