Google said on Monday that the new test results show promising signs that the technology it hopes to replace cookie-based ad targeting is working on.
Why it matters: Google and rivals of Web browsers, Apple and Mozilla, recently introduced radical privacy changes that will eliminate cookies, an Internet tracking tool that tracks users’ browsing history.
Update quickly: Cookies are considered third party data or user data collected indirectly from users through browsers or websites. Third party data is often bought and sold on a large scale through online data exchanges.
- For decades, cookies have been the main way for advertisers to target online users, but privacy concerns are making them less viable in the future.
- Finding a replacement for cookies is a big challenge, as the entire $ 330 billion digital ad ecosystem globally was built primarily around cookies.
Details: Google is testing a new API (a software interface) called Federated Learning of Cohorts (FLoC), which acts as an effective replacement signal for third-party cookies. The API exists as a browser extension in Google Chrome.
- The company said on Monday that FLoC tests to reach the public show that advertisers can expect to see at least 95% of conversions per dollar spent on ads, compared to cookie-based advertising.
- FLoC uses machine learning algorithms to analyze user data and then create a group of thousands of people based on the websites that an individual visits. Data collected locally from the browser is never shared. Instead, data from a much larger cohort of thousands is shared and used to target ads.
Be smart: It is a big problem for Google to say that it is close to introducing a technology that will replace cookies, because one of the most difficult parts of eliminating cookies from targeting ads on the Internet is that there was not a great solution to replace them with.
- Many publishers have begun to lean towards using primary data, or data uploaded to a website directly from the user, to target ads.
- But not all publishers have strong enough relationships with customers to collect this data and would have been paralyzed without the ability to use some kind of anatomized data to target people with ads.
- The effort is part of a larger Google initiative called “Privacy Sandbox”, a proposed set of rules for eliminating cookies in a privacy-friendly manner in conjunction with industry consultation.
The big picture: Google’s privacy efforts are taking place alongside radical Apple changes that also make it harder to track individual user data online. These important changes take place amid a calculation of privacy in the United States and Europe in relation to online data.
- Google is trying to implement a more gradual and collaborative approach to its privacy changes than Apple, which has been criticized – mainly by Facebook – for launching radical changes to its “Identifier for Advertisers” (IDFA) user tracking feature without provide advertisers with a better alternative.
- Chetna Bindra, Google’s head of user trust and privacy for advertising, told Axios that a pioneering approach in the industry makes more sense for Google.
- “The way we see it is that there are a lot of technical innovations at the heart of this, and what we’ve been focusing on is not blocking third-party cookies right away,” she said. “Our goal is to engage the entire advertising community and really lean towards the kind of collaboration that is critical to making such a big change.”
What is the next: Google has other proposals to replace cookies in progress, so there is no guarantee that FLoC will be the answer, but the company said it is very encouraged by what it has seen so far.