What did Google announce?
- Google recently announced it was ditching the highly-invasive and controversial third-party cookies which allow companies to track a user as they surf the web.
- They also shared that they would be replacing third-party cookies with other, more privacy-centric tools, including one called FLoC (Federated Learning of Cohorts)
Why did they announce this?
- Google claims FLoC offers more privacy than third-party cookies because it monitors activity at a group level rather than an individual level.
- By phasing out third-party cookies, it could strengthen their advertising dominance. While they may lose out on website cookie data, they will still have its user data on individuals that it collects through its many widely used products.
What is the role/importance of cookies today?
- A cookie is a small bit of data stored as a text file in a browser that allows websites to keep track of users and help them to customize the experience.
- There are essentially two types of cookies:
- First-party cookies will not be phased out and are used by websites to keep track of visits and activity. .
- Third-party cookies are being phased out due to being controversial and seen as an invasion of people’s privacy. They are used for ad retargeting and behavioral advertising so advertisers can track a user across the web as they visit different websites and build a profile.
What does the removal of third-party cookies mean for:
- Browsers? While Chrome has a massive audience, we can't rule out others such as Apple’s Safari (primarily on mobile). With more than a billion active devices this means Safari users on mobile are about to have all tracking off by default. Other privacy-focused browsers such as Brave, Vivaldi, DuckDuckGo have stated their concerns on using FLoC and have gone as far as saying that they will block it. They believe the worst aspect of FLoC is that it materially harms user privacy based on implying to be privacy-friendly. Google’s approach to determining whether a FLoC cohort is sensitive requires (in most cases) Google to record and collect that sensitive cohort in the first place.
- Web Content Management Systems?
- "WordPress" hasn't made any decisions or changes yet with regards to #FLoC. There is a rumor that they may include code that will have all sites by default disable support for or block FLoC as a security threat.
- Marketers? Many over the years have moved away from reliance on third-party cookies due to the negative public perception, years of abuse, and based on them being increasingly inefficient and ineffective for advertisers to target users and track performance.
- Brands that have developed a reliance on third-party cookies need to revisit the first-party cookies. Users that visit a site and agree to first-party cookies, are saying that they find that content useful and of value, with an increased intent to buy or engage with the site when presented with a retargeting action like an ad. Even though there will be less people to send a message to, the data gathered from users that accept first-party cookies will be much more valuable for businesses. It will allow marketers to create users’ profiles with more detail and design tailored retargeting campaigns to reach them.
- Brands need to optimize existing marketing channels - Focus on more personalized and comprehensive use of other traditional and diverse marketing channels that don’t require third-party cookies, such as web push notifications, emails, SMS, content marketing and contextual advertisement.
- The consumer? The elimination of third-party cookies will make customers feel they have more control over their experience online and how their personal data is handled and exchanged. This will translate into them being more open-minded to allowing first party cookies and this will benefit marketers in the long run.
What are the pros/cons of FLoC?
- It will provide a solution to brands/marketers as an alternative to Google and Chrome’s blocking third-party cookies by giving them access to Google’s first-party data.
- It gives a little more privacy to users by less actors involved, but users will be known within Google.
- It will likely force brands/marketers to switch to their own independent first-party solution tied to a GUID to deliver a better customer experience.
- It will increase dependence on Google
- It will likely give users a false sense of privacy when Google is able to use its own product ecosystem to identify and build profiles based.
- The industry will have to find a way to cope with this major change. For those companies that do not embrace their own first-party GUID until a Universal ID is established, they can expect a lot of volatility in targeting users and fluctuations in CPMs and revenue.
- The ad reach is likely to go down while the prices will go up. Because of the way things will change, tracking attribution will likely be a problem.
What are the alternatives to Third Party Cookies other than FLoC?
- Device fingerprinting: This is a technique marketers use to follow potential customers around the internet. It is a technique for identifying a computing device right down to the individual.
- Pixel Syncing and Universal IDs: Since each player creates its own cookie ID, if companies want to share data, they need to be matched to the other providers. This sync is the way to follow users across the web and ensure they are targeted with the correct ads but it isn’t foolproof and very often there can be mistakes.
- DigiTrust: Looks to improve this bloated web cookie syncing by creating a universal user token which stores the conventional cookie data within it and allowing members to share this data without the need for syncing.
- ID5 Universal ID Solution via Prebid: This independent identity solution for digital advertising released its Universal ID which is available to publishers and ad tech platforms globally. Publishers can retrieve the ID5 ID, store it on a first party cookie and pass it to their demand partners via a simple on-page configuration.
That said, our recommendation for what clients should be doing today is:
- Focus on First-Party cookies and get deeper into your analytics environment using ‘the GUID’ (Globally Unique Identifier). Pass your GUID a unique variable with key events and store on premise or in a cloud hosted relational database. With this GUID you can begin to stitch together systems and build a rich and valuable customer profile.
Update June 27, 2021: