Third-party cookies will disappear from Chrome in 2020 and may be replaced by FLoC and Fledge. Let’s dive into this product news.
FLoC, Federated Learning of Cohorts, the alternative to third-party cookies
FLoC is a technology that should allow advertisers to continue targeted advertising campaigns based on user interests. However, instead of targeting an individual, FLoC will target a cohort of users with similar interests. According to Google, the results are promising.
What is FLoC?
Google triggered a real upheaval by announcing its intention to end third-party cross-site tracking cookies. To allow the advertising ecosystem to survive, Google is working on replacement technologies based on a “Privacy-first” approach.
The goal is to provide advertisers with cohorts of thousands of users, meaning that they will not target a specific user but rather a group of people who share the same interests.
How does it work? A Chrome extension, the FLoC API, retrieves and utilizes the data. The browsing history will be stored and exploited locally on the user’s browser.
The API uses machine learning to create cohorts of thousands of users based on browsing behavior. Advertisers will not receive individual browsing history but cohort data.
Does it work?
- In October 2020, Google announced the first results of tests. It claimed to have achieved over 70% accuracy in conversion predictions compared to non-targeted segments. The market still needs to be convinced…
- Google will compare this with third-party cookies in a more recent blog post. FLoC would reach equivalent market audience typologies as those addressed via cookies. Advertisers can expect to generate at least 95% of the conversions per dollar spent compared to what they would have achieved with targeting via cookies.
Is it worth rushing into FLoC?
So, is it a winning formula or just hype?
Be careful that FLoC is not a flop. This new methodology raises many questions.
- Google is working to enable advertisers to address specific audiences sufficiently. However, as with third-party cookies, reaching a niche audience this way will still be too expensive.
- Is it a Privacy-first device? FLoC requires potentially intrusive data collection. Will end users’ acceptability of the new device need Google to be less data-hungry?
- When it is challenging to anonymize data, can cohort data be considered non-personal data? Or will each advertiser still be subject to the GDPR for their campaigns?
In conclusion, while we have seen some progress, many questions remain.
What are the next steps?
- Google has shared a white paper to provide more information and enable initial experiments.
- The cohort targeting method will be available for public testing in March 2021.
- Advertisers using Google Ads can test the method within the tool from the second quarter of 2021.
- The discontinuation of third-party cookies is scheduled for 2022; this technology will potentially replace them.
Fledge, the solution for exploiting first-party data
Google’s Privacy Sandbox is expected to include another solution allowing advertisers to control their first-party databases without using third-party cookies. This will enable them to continue remarketing but in a different way.
- Google’s first proposal on this subject was called Turtledove and was met with mixed reviews from the advertising industry. Google has therefore revised it.
- The second version is called Fledge and includes a third-party trust server. Information on auctions and campaign budgets will be stored there.
Tests should be made available later in the year. Google plans to allow techs to use their servers.
FLoC, Fledge, there are still many questions.
As we have seen, only some things are resolved, and there are still many unknowns regarding the methods used. For example:
- Will Google’s APIs become a standard on these issues? Are they based on a consensus among the stakeholders participating in the W3C’s work?
- What will be the consequences of the investigation opened by the UK regulatory authority (Competition and Market Authority – CMA) on the end of third-party cookies? What impact will it have on the Privacy Sandbox?
- The European Commission has sent a detailed questionnaire to Google’s competitors, which includes passages related to the Privacy Sandbox. The responses to the questionnaire were expected by January 22nd. Will Google have to face a procedure on these aspects? Can this impact FLoC or Fledge?
- Will advertisers have an interest in using these technologies to continue personalized advertising? Or is it time to rediscover the benefits of contextual advertising? Especially since some products are particularly suited to it.
Conclusion: FLoC, Fledge, to be continued
The GDPR compliance of websites and integrating a cookie management module such as Axeptio’s are already pushing publishers to have a more respectful approach to privacy.
Google’s projects are a real breakthrough for the protection of personal data. Only some things are perfect, but the planned progress should be noted.
The confidentiality of personal data is reinforced while leaving Google in control of the data.
FloC and Fledge will not be enough to end third-party cookies. That is why Google is also working on other areas:
- Ad performance measurement
- Fighting against fraud
- An anti-fingerprinting policy
This is a story to be continued, as all these technologies will likely evolve further, either in response to market feedback or investigations by control authorities.
