The internet as it is today can be identified by its heavy reliance on advertising at its core. Using personally identifiable information, companies can track individuals and serve them ads based on their interests. However, this has led to major privacy issues and now, the era of the third-party cookie will eventually come to an end. Google is seeking to “build a more trustworthy and sustainable web”, and has recently proposed the Privacy Sandbox to build innovations that protect anonymity while simultaneously trying to find ways to make sure publishers don’t go broke in the process.
Their solution is currently something called FLoC, or Federated Learning of Cohorts, which will try to cluster large groups of people together with similar interests and serve ads based on a number of factors that are non-specific to individuals. Many publishers have done the math and are unsure of how FLoC and the Privacy Sandbox will keep money in their pockets while respecting persons, but Google continues to claim that this is the best way forward – more on this later.
In addition to refusing device fingerprinting measures as an alternative to third-party cookies, the company today stated that it would not create alternative identifiers to track individuals after the aforementioned third-party cookies have crumbled.
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.
Many companies in the Ad Tech industry are already looking for new ways to track users post-cookie (i.e. PII graphs based on email addresses) but Google has refused to join them, claiming that any attempts to breach a user’s privacy would not be sustainable in the face of increasingly strict regulatory restrictions.
Moreover, some 72% of people feel that “almost all of what they do is being tracked online by advertisers, technology firms and other companies, and 81% say that the potential risks they face because of data collection outweighs the benefits,” according to a Pew Research Center study that Google referenced. Such erosion of trust is simply non-beneficial to the tech giant long-term.
Instead, its web products will be powered by privacy-preserving APIs, such as FLoC. Google says that “People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.” As a company that’s built its entire empire on tracking users and trading personal information for services, Google now claims that users and advertisers can live together in harmony – we’ll see.
FLoC has apparently shown itself to be fairly successful with in-market and affinity audiences. Advertisers can expect “at least 95% of the conversions per dollar spent when compared to cookie-based advertising,” though the specific results depend on the strength of the clustering algorithm that FLoC uses and the type of audience being reached.
As Google inches closer to its 2023 Department of Justice court hearing which will attack its advertising lifeblood over claims of monopolistic behavior, the company has been seeking alternative revenue streams, including loads of paid features and services across its ecosystem. Its sudden change of heart on advertising is no good Samaritan act – it’s being done out of necessity. However, despite this reality, it will certainly be good for the open web and the privacy of its users.
Chrome intends for FLoC-based cohorts to be available for public testing through origin trials this month, and expects to begin testing them with advertisers in Google Ads in Q2 of this year. Some people feel that this is all just a façade for Google to harm competitors, and Google itself doesn’t rely on third-party cookies to power its ad business, but what do you think? Can we truly build a privacy-first web that respects users while simultaneously creating a digital economy for the little guys? Let’s discuss this in the comments!