When Google announced in early 2020 that they were phasing out cookies, I half-expected them to just replace them with an identical tracking solution that just came with fewer negative connotations (“We call them brownies!”).
But privacy is becoming an increasing concern online, and Google is greatly distancing themselves from anything that could make them look remotely like Gryzzl. This week, Google doubled down on their new approach to advertising, which, they say, will better protect user privacy.
“Today, we’re making explicit that once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products,” writes David Temkin, Google’s Director of Product Management, Ads Privacy and Trust.
More than 60% of people on the internet use Google’s web browser, Chrome, which means more than 60% of people will no longer be tracked on the internet. In addition, more than 7 million advertisers use Google Ads—in other words, this is a big deal.
To be clear, Google is not giving up on ads. Advertising comprises more than 80% of their annual revenue, so it’s in their best interest to opt for deep surgery here rather than a Band-Aid. Rather than bank on developing a cookie alternative that is still based on tracking individuals (as other companies are doing), Google is going all in on FLoC (Federated Learning of Cohorts).
In short, FLoC is based on the premise of advertising to groups of people (cohorts) with similar interests, rather than individuals. Instead of tracking your specific browser history, it would only keep track of the types of websites you’ve visited.
Broadly speaking, digital advertising comes in three forms (descriptions stolen from the GitHub FLoC page):
First-party and contextual information (e.g., “put this ad on web pages about motorcycles”)
General information about the interests of the person who is going to see the ad (e.g., “show this ad to Classical Music Lovers”)
Specific previous actions the person has taken (e.g., “offer a discount on some shoes that you left in a shopping cart”).
With FLoC, Google is putting their money behind category #2 as the future of advertising: advertising to groups of people who have similar interests.
Okay, so Google is no longer tracking individual browser history, but they still have to track behavior to place you in a cohort, right? Yep. Understandably, some people still aren’t impressed.
But what are you going to do? Advertisers gotta advertise. Internet gotta revenue. With billions of sites and pages on the world wide web, there has to be some structure to how ads are served.
Advertising to investors is hard work, especially if you’re an RIA. It can be tough competing against Wells Fargo, who has the budget to advertise everywhere.
Ads that used tracking made it easier to find your people on a limited budget.
But this FLoC-based approach is actually great if you’ve taken the time to develop one small but important part of your marketing strategy: personas.
Maybe your personas don’t include their interests, but chances are you know enough about your ideal clients to put together a profile that includes their hobbies, musical tastes, etc. If you’re not sure, take some time to sit down with your top clients and ask them about their interests.
Google isn’t the only advertiser out there, and Chrome isn’t the only browser out there. You can still find routes for third-party tracking advertising.
Facebook is still among the most effective (if not the most effective) advertising channels, largely because they base their targeting on first-party information. Linkedin, Bing, AdRoll, Reddit, the list goes on and on. (We have some ideas to help if you’re wondering where to start.)
Hard truth time: Cookie-free advertising is not as effective. According to Google themselves, advertising traffic that doesn’t leverage cookies is 52% less effective. On top of that, not being able to track specific user behavior means you won’t be able to track conversions (via Google’s avenues), so it will impact your ability to track ad effectiveness.
That doesn’t mean you shouldn’t use them. But you will need to adjust your expectations.