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Insights from the industry

Google’s Big Cookies Announcement

Google’s Big Cookies Announcement

Posted on March 24, 2021 by Daniel Farrell

Google first announced in January 2020 that it would limit 3rd party cookies on Chrome. The announcement developed earlier this month (March 2021) when Google announced its commitment to the ‘privacy-first web’, confirming that once third-party cookies are phased out, they will not build alternate identifiers to track individuals as they browse across the web, nor use them in their products. Google’s web products will be powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers.

Why is this news so important?

When Google does remove cookies in 2022, it won’t be the first. Apple’s Safari, the second biggest browser behind Chrome, limited cookie tracking in 2017. Mozilla’s Firefox blocked third-party cookies in 2019. However, any feature implemented by Google will shake up the industry due to its huge market share – Google Chrome for example reportedly accounts for around 65.3% of web browsing activity.

What is the difference between 1st & 3rd party Cookies?
  1. First party cookies are used to improve your user experience with the website you are visiting / Third party cookies are used to create user profiles across the web, cross-site targeting and remarketing
  2. First party cookies are directly created by the website you are using / Third-party cookies on the other hand are generated by websites that are different from the web pages you are currently visiting, usually because they’re linked to ads on that page
  3. First party cookies allow the website you are visiting to store information about your preferences (which is actually a good thing) / Third-party cookies let advertisers or analytics companies track your browsing history across the web on any sites that contain their ads in order to track your overall online behaviour to serve you back more targeted ads (which can be seen as good or bad depending on how you look at it!)
Google’s Alternative?
FLoC (Federated Learning of Cohorts)

FLoC is an AI system which offers anonymized Segments or “Cohorts” organized by interest. The aim is to group individuals based on their common browsing behavior. Unlike third-party cookies, all the data used to determine what group a user will go in will be processed in Chrome rather than broadcast across the web.

Targeting in aggregate, anonymization and on-device processing will effectively hide individuals inside large groups of people with similar interests. Protecting privacy and still delivering results for publishers, advertisers and consumers.

“It all works in a similar way to how Netflix’s algorithm works out what you might like to watch. In essence, your viewing history is similar, but not identical to, plenty of others. If Person A and Person B both like the same four horror films, for example, then chances are Person A will like a fifth horror film that Person B has just watched. Now just expand that out to cover billions of people” (Wired 2021)

Would it work?

For the past couple of months, Google has been actively testing its Privacy Sandbox proposal for interest-based cohorts, and the preliminary results are in:

  • It says it is delivering 95% of the conversions per dollar spent when compared to cookie-based advertising. The effectiveness varies by the strength of the clustering algorithm and the strength of the targeted interest.
  • Google plans to set a minimum number of people that can be shown a particular ad, to avoid microtargeting, this number is not yet defined
  • Google will make FLoC-based cohorts available for the public this month (March) By Q2, advertisers can start testing FLoC-based cohorts in Google Ads.
  • The Chrome 90 release in April will see the first controls for the Privacy Sandbox. For the user, it will be an initial on-off decision, but further customisation is to come later.
Challenges ahead
  • It’s likely that eliminating third-party cookies will push advertisers to rely on logins and user accounts to collect their own first-party data. Or rely on Google and Facebook to collect that data for them.
  • Learn how to use First Party Data: Companies will still be able to target ads based on what they learn about people’s visits to their own websites. That’s first-party tracking data. However, many small businesses don’t even know how to use their own first-party browsing data to help target their ads.
  • Campaign targeting will be different. Teams will need training
  • Marketers will need better analytics tools to model behaviours and a team capable of actually using the information within their power.
  • When it comes to measurement, advertisers will “have to prioritize which conversions are most important for their reporting needs”. There will be noise added, and less data shared from devices – Similar to what Facebook is currently doing.

The UK’s Competition and Markets Authority (CMA) is currently investigating Google’s privacy sandbox. CMA is keen to ensure it “develops proposals in a way that does not distort competition”.

The main concern at the moment is that the removal of cookies will increase Google and Facebook’s power and get rid of smaller publishers. DMP’s are the most affected party and they have been very vocal against the changes Google are implementing

The reality is that Google still collects information on a user’s behaviour based on Google searches, Gmail, Google Analytics, and data from other Google properties that they can continue to use for targeting. It also has a lot of first party access through Google analytics, Google Tag Manager and Google maps. Google doesn’t really need 3rd party cookies and It is also looking to re-gain user trust by leading on privacy first.

If you would like to discuss any of these changes further then please get in touch with us here

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