Google is rolling out new privacy controls in its Chrome browser and plans to eliminate third-party cookies in the next two years, the company wrote in a blog post Jan. 14.

The change will most likely make advertisers resort to less-targeted ads via first-party data or contextual targeting based on what people are reading.

The change comes as Google and other advertising companies face privacy laws like California's Consumer Privacy Act and Europe's General Data Protection Regulation.

With their own first-party data, so-called walled gardens like Google, Facebook, and Amazon could gain more control over ad budgets.

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In the face of growing privacy concerns and regulatory scrutiny, Google plans to crack down on third-party cookies in its Chrome browser, leaving advertisers with lots of questions.

After announcing in 2019 that it would enable people using its Chrome browser to block ads that use third-party cookies, Google said in a blog post Jan. 14 that it would eliminate third-party cookies altogether by 2022. Third-party cookies help advertisers target digital ads, and Google's move has big ramifications for dozens of ad-tech companies that help marketers with that kind of targeting.

"Users are demanding greater privacy — including transparency, choice and control over how their data is used —and it's clear the web ecosystem needs to evolve to meet these increasing demands," Justin Schuh, director of Chrome engineering, wrote in the blog post.

In place of third-party cookies, Schuh wrote that Google is working on its "Privacy Sandbox," which is aimed at developing standards and tests for cookie-less advertising. He also described Google's move as less "blunt" compared to how browsers like Apple's Safari block third-party cookies. Google said it would start testing cookie-less advertising by the end of the year to measure conversion and personalization.

"Some browsers have reacted to these concerns by blocking third-party cookies, but we believe this has unintended consequences that can negatively impact both users and the web ecosystem," Schuh wrote. "By undermining the business model of many ad-supported websites, blunt approaches to cookies encourage the use of opaque techniques such as fingerprinting (an invasive workaround to replace cookies), which can actually reduce user privacy and control. We believe that we as a community can, and must, do better."

How the changes could benefit Google

Google's move may encourage advertisers to use its own first-party data like log-in information or email addresses to target ads along with spending on first-party data measurement, including, of course, Google's technology.

Google may also pitch advertisers its own audience segments that are based on its first-party data collected from search, Gmail, YouTube, app downloads, and visits to publishers that run ads through the Google Display Network.

Marketers say Google's move could cause the same privacy headaches that marketers have with the European Union's General Data Protection Regulation and California's Consumer Privacy Act.

Google's audience segments are based on its own data and are not as expansive as data provided by third parties, Jason Hartley, SVP and national head of search at 360i, told Business Insider back in May.

"It's going to be very difficult to replace the performance for unfettered marketing," Hartley said of Google's 2019 move to let people limit ad targeting in Chrome. "We are going to have to look for additional ways to target."

Mike O'Sullivan, VP of product at Index Exchange, said in May that it was unclear whether publishers' third-party tools that don't run advertising — like analytics and content-management systems — would be affected by the same Chrome change.

Read more: 'That would look like 70% of traffic is gone': Here are the winners and losers of Google's plans to add privacy tools to Chrome

With less targeting, advertisers' Google ads will presumably reach wider audiences, and creative will have to be adjusted accordingly.

"We're going to have to make better creative that's going to have an impact on a broader group of people," Hartley said at the time.

The walled gardens may get higher

Other so-called walled gardens including Facebook and Amazon could also benefit from Google's privacy changes.

"Google and Facebook are effectively immune to all third-party cookie blocking because of their unmatched reach with first-party cookies," Mark Douglas, founder and CEO of the ad-tech firm SteelHouse, told Business Insider in May.

Amazon uses data to place ads on publisher websites, so it could be hurt more than Facebook. But Jay Friedman, the president of Goodway Group, has said Amazon's ad business would be insulated because it already had first-party data.

"If Amazon is restricted from showing one of its customers a product on ESPN.com based on that customer's Amazon behavior, how will Google be able to use its own first party-data for those users?" he told Business Insider in May. "If they can't, this puts Google on the same playing field as Amazon, Facebook, and even The Trade Desk and MediaMath."

'A slow death' for measurement

Zvika Goldstein, the chief product officer at Kenshoo, said Google's move would change how marketers measure their ads using third parties, and without a third-party measuring attribution, Facebook, Google, and Amazon could take credit for driving a sale.

"There's going to be some challenges in getting a deeper look into programs if we don't have the ability to tie events using cookies the way we used to — we're talking about a slow death," he told Business Insider in May.

Google is becoming more performance-focused

Google is also moving further into e-commerce advertising. Last May, Google unveiled a big new push into e-commerce with Google Shopping and ads in Google's new social-media-like feed, Discover.

Both moves suggest that Google is trying to compete with Amazon while clamping down on third-party cookies.

"They're trying to at the same time track people less, but be more present across more of the journey — those are interesting competing goals," 360i's Hartley said.

Speaking in May about Google's curtailing cookies, Joshua Lowcock, the US chief digital and innovation officer and managing partner of UM, said he expected to move more ad dollars to retailers like Walmart and Target that have first-party data.

"There will be more interest in media partners who have a legitimate reason to collect and use first-party data, such as retailers," Lowcock said. "I expect to see publishers in a race to collect some basic user data so that it will be easier for agencies to match our clients' customers to publisher audiences."