Google’s phasing out of third-party cookies is well documented and the entire industry is speculating what this transition will mean for marketers and advertisers, as well as everyday web users.
In March, Google released its first major announcement with details of what its vision for a cookie-free web will involve - and some important points were clarified. Here are the key points marketers and advertisers need to know, along with some ‘reading between the lines’.
‘We will not build alternate identifiers’ to replace cookies
David Temkin, director of product management, ads privacy and trust, at Google published a statement, outlining some of the company’s intentions with its phasing out of third-party cookies.
The point he raised was the issue of using alternative identifiers to replace cookies, such as Unified ID 2.0, which has garnered support from a range of ad tech players including LiveRamp, Nielsen and Criteo.
“Today, we’re making explicit that once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products,” Temkin said in his statement.
Apparently, Google “continues to get questions about whether it will join others in the ad tech industry who plan to replace third-party cookies with alternative user-level identifiers” and the search giant insists it will not simply replace cookies with a similar technology under a different name.
Interestingly, Temkin acknowledges that this may mean other providers can offer superior ad targeting methods than Google but he says the company doesn’t feel these solutions will meet the “rising consumer expectations for privacy” or increasingly stringent privacy measures being brought in by regulators.
Google is confident about tracking users anonymously
Google might be ditching third-party cookies but this doesn’t mean it’s done with tracking users entirely and it’s confident about the effectiveness of its anonymous tracking technology.
“Advances in aggregation, anonymization, on-device processing and other privacy-preserving technologies offer a clear path to replacing individual identifiers,” Temkin insists.
Google’s headline technology is Federated Learning of Cohorts (FLoC), which essentially groups users anonymously into “flocks” with other users who complete the same actions. In his statement, Temkin references Google’s latest tests of FLoC where the solution achieves roughly 95% of the conversion power advertisers are used to with cookies.
“Our tests of FLoC to reach in-market and affinity Google Audiences show that advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising," said Chetna Bindra, group product manager, user trust and privacy at Google.
Temkin says this “points to a future where there is no need to sacrifice relevant advertising and monetization in order to deliver a private and secure experience”.
Not everybody is convinced FLoC is the solution advertisers are looking for, though, while others point to a new set of privacy concerns it raises. It will be interesting to see whether advertisers and publishers buy into Google’s rhetoric or sit back and see how it compares with other options before drawing any conclusions.
Google signals the race for first-party data
Towards the end of Temkin’s statement, he talks about the importance of first-party relationships but what he’s really talking about here is first-party data. Although third-party cookies are on their way out, publishers will continue to sell ads on their own sites using their first-party data and, likewise, marketers and advertisers will still be able to use their first-party data to target ads on third-party sites.
This will inevitably create an arms race for first-party data where smaller publishers and businesses are disadvantaged by having smaller amounts of data to work with.
Google is in an immensely strong position with hoards of data coming in from Google Accounts, Google Search, YouTube, Google Maps and its fleet of data-hungry platforms. This is another point of criticism among skeptics about privacy measures being driven by tech giants – that the likes of Google, Apple and Facebook are simply implementing strategies that enhance their dominance and the subsequent inequality for other players.
Google tells us that it’s “charting a course towards a more privacy-first web” but critics argue the search giant is exploiting privacy concerns to consolidate its grip upon the web.
What are the alternatives for marketers and advertisers?
As things stand, the most viable advertising solutions for a cookie-free web either replace them with similar technologies or anonymous grouping, as seen in Google’s FLoC standard. If Google is right that “advertisers don't need to track individual consumers across the web to get the performance benefits of digital advertising,” then perhaps more alternatives will emerge.
The most obvious example is contextual advertising, which focuses more on contextual relevance with the content users are currently engaging with.
Let’s imagine a small business owner gets home and opens up their favorite recipe website for some idea on what to cook for dinner. Is this the right time to deliver ads for accounting software, using interest targeting options (typical of cookie advertising), or would it make more sense to show ads related to food products/services while accounting is the last thing this hungry business owner is currently interested in?
Either way, Google needs to find the right balance between addressing users’ privacy concerns and keeping advertisers excited about paying for ad placements.