Explained: How Google plans to serve ads once cookies are dead
FILE PHOTO: A Google sign is pictured on a Google building in the Manhattan borough of New York City, New York, U.S., October 20, 2020. REUTERS/Carlo Allegri/File Photo
In January 2021, Google announced plans to phase out support for third-party cookies on its Chrome browser. Now, the company has said it will not be building new technology to support user tracking on its browser, once the cookies are phased out.
The decision will have a significant impact on digital advertising given that Chrome is the most popular browser across the world. It also heralds a shift in Google’s approach, which is pitching itself as more privacy-centric. But what is the significance of Google’s latest announcement? We explain below:
Why is Google phasing third-party cookies?
In January, Justin Schuh, Director at Chrome Engineering, wrote that the company planned to stop support for third-party cookies on the Chrome browser over the next two years.
In a new blog post on March 3, David Temkin, Director of Product Management, Ads Privacy and Trust has clarified that Google will “not build alternate identifiers to track individuals as they browse across the web, nor will it use them in its products”. This means once third-party cookies are phased out, Google won’t have other tools for user tracking.
It should be noted that Apple’s Safari browser and Mozilla’s Firefox are already blocking all third-party cookies.
Third-party cookies help websites and advertisers track user behaviour on the web. For instance, if you browse for some products on a website, and later find advertisements for those same products appear on a social media platform, it is due to the third-party cookies, which are being used to track your behaviour. Once Google phases them out, it will become harder to push targeted ads and this will impact both the effectiveness and pricing of ads.
Why will Google not replace third-party cookie tracking with another form of user tracking?
Temkin’s blog post says many users are now convinced they are being tracked all the time and are not sure about their privacy. So any other alternative tracker will also not “meet rising consumer expectations for privacy.”
More importantly, Google is not sure whether these alternatives will withstand scrutiny from “rapidly evolving regulatory restrictions” and hence does not consider this as a “sustainable long-term investment”.
Given Google is facing anti-trust investigations in the US and in other countries, a new tech which can help track user behaviour will likely cause more problems and comes under the scanner of regulators.
So, how will Google offer effective ads?
In the new regime, Google’s web products will be “powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers”.
According to the post, advertisers will retain their success rates while now tracking individual users. Google is proposing a new approach called Federated Learning of Cohorts or FLoC which aims to track clusters of people with similar interests, instead of individuals. So the targeting will simply shift to collective habits of users.
According to Google, their latest tests for FLoC have shown promise for advertisers. While the advertising industry will also need to accept this as a method, that won’t be tough given that Google is the largest player in this industry across the world.
Google will make FLoC-based cohorts available for public testing through origin trials with Chrome’s next release this month. It also expects to begin testing FLoC-based cohorts with advertisers in Google Ads in the second quarter of 2021.
Google says it will continue to support first-party relationships on its ad platforms for partners, in which they have direct connections with their own customers.