This article has been updated to reflect changes in 2024

Recent Developments in Digital Advertising and Privacy

Google announced a significant shift in its approach to tracking users on the web, moving away from third-party cookies towards a more privacy-focused strategy. Initially, Google proposed FLoC as part of its Privacy Sandbox initiative, aimed at creating a more private web while still allowing for personalized advertising. FLoC intended to group users into cohorts based on browsing habits, thereby preserving anonymity while still providing valuable data for advertisers. However, the reception to FLoC has been mixed, with concerns about privacy and effectiveness leading to adjustments in Google’s strategy.

As of my last update in April 2023, Google decided to move away from FLoC and introduced a new framework called Topics API. This new approach aims to address some of the concerns raised by FLoC’s critics. Topics API selects a handful of topics, based on the user’s browsing history, that represent the user’s interests. These topics are stored locally on the user’s device, and only a small number of topics are shared with websites and advertisers, providing a more privacy-preserving method of interest-based advertising.  The transition from third-party cookies to privacy-centric models like Topics API signals a shift towards “zero-party data collection,” where marketers are encouraged to directly engage with consumers to gather data. This approach aligns with growing privacy concerns and regulations, urging marketers to foster trust by transparently collecting and using data.

Marketers now have opportunities to innovate in how they collect and utilize consumer data. Direct engagement methods, such as surveys, newsletters sign-ups, and loyalty programs, can provide valuable first-party data. Marketers can leverage this data to personalize advertising and content, enhancing the user experience while respecting privacy.

Challenges and Opportunities

While these changes pose challenges, such as adapting to new technologies and potentially having access to less granular data, they also offer opportunities for brands to differentiate themselves by prioritizing consumer privacy and building trust. Companies that successfully navigate this transition can gain a competitive edge by demonstrating their commitment to respecting user privacy. Furthermore, the shift towards first-party data collection encourages marketers to develop more meaningful interactions with their audiences, leading to deeper insights and more effective marketing strategies. By focusing on quality over quantity in data collection, marketers can achieve more targeted and relevant advertising, ultimately improving ROI.  The digital landscape continues to trasform, driven by evolving privacy standards and changing consumer expectations. Google’s pivot from FLoC to Topics API and the broader industry move away from third-party cookies reflect a shift towards more privacy-conscious advertising practices. For digital marketers, this represents both a challenge and an opportunity to embrace privacy-first strategies, engage directly with their audience, and build trust through transparency. As the industry adapts to these changes, flexibility, innovation, and a focus on ethical data practices will be key to success.

Editors Note, the below article was published on March 30, 2021

Online advertisers have been using cookies for years to track user data, including sites they visit and other performance benefits, in order to serve them relevant ads. But Google is putting a stop to this by 2022, stating that this has led to an “erosion of trust and a growing concern” about privacy, personal identity.

According to Wikipedia, Chrome currently has almost 64% of usage share across all browsers. It will be joining Safari and Firefox and companies like Apple who have already phased out third party cookies. Building trust amongst target audiences will be of greater importance to digital marketers as they try to respect the privacy of their customers who are feeling “out of control” according to a recent Pew Research study.

In an article entitled Americans and Privacy: Concerned, Confused and Feeling Lack of Control Over Their Personal Information 81% of those polled said that the “potential risks they face because of data collection by companies outweigh the benefits”. The concerns lie mainly with those organizations (government and companies) that “collect, store and use their personal information”.

How Will The End of Third Party Cookies Impact Digital Marketers

In this new era of “zero party data collection” are we truly looking at the death of Remarketing? According to Preference Choice zero data collection actually provides fresh opportunities as marketers can now collect data directly and transparently from the customer. “No longer are you purchasing data from a third party who may or may not keep that data clean. Hard bounces, poor targeting, and money flushed down the toilet can be a thing of the past. And since you’re asking your customers for it directly, you are able to ask for more data than you might have through purchasing it. Want their t-shirt size? Just ask. Want to know their favorite color? Again, just ask.”

And Then There’s FLoC

Google’s alternative to third party cookies, called Federated Learning of Cohorts (FLoC) is a Privacy Sandbox API, that will act as alternative application for browsers to enable interest-based advertising. Democratizing access to user data, information will be kept locally within the browser and will only expose the cohort ID. A user’s FLoC will be updated over time so that it will still provide “advertising utility”. According to Search Engine Land FLoC works by “gathering data about a user’s browsing habits and then clustering groups of users with similar interests into cohorts. The algorithm used to develop those cohorts may look at the URLs of sites that the user visited and the content of those pages, among other factors…information about the cohort is then shared for advertising purposes.” As of March 30th, Google has begun testing an “developer origin trial” of FLoC across 5% of Chrome users worldwide, according to their blog. The trial will allow Google to track both cookies and FLoC “cohort” IDs.

Is FLoC Really Secure?

Some big tech organizations feel that FLoC is still not secure enough and there are a number of potential “abuse scenarios” including “browser fingerprinting” to extract individual user data. According to GitHub “it should be clear that FLoC will never be able to prevent all misuse. There will be categories that are sensitive in contexts that weren’t predicted. Beyond FLoC’s technical means of preventing abuse, sites that use cohorts will need to ensure that people are treated fairly, just as they must with algorithmic decisions made based on any other data today.”

The Final on FLoC

In a recent blog Search Engine Land used Apple as an example to suggest that at least 60% of users will decline data by clicking “Don’t Allow” when Apple’s new app tracking transparency prompt pops up. If this is an indicator of upcoming user behavior will marketers have enough data to accurately target campaigns? Singular’s IDFA survey seems to think so. According to the author of the survey John Koetsier, 40% of users simply don’t care if their data is collected, although they may not fully understand the implications of data collection. This 40% may be sufficient enough data for marketers to make intelligent decisions in their campaigns. “If 40% of iOS users do actually allow marketers to track advertising effectiveness by clicking OK in the ATT pop-up, that’s not insignificant. In fact, you could argue that 40% is a big enough percentage to make aggregate judgments about the other 60%, at least in some things.