Google takes next steps towards 'privacy-first' web devoid of third-party cookies

US tech giant will release its Federated Learning of Cohorts for developer trials this month and advertiser tests with Google Ads next quarter, during which it hopes to glean insights on how well the alternative to cookie-based ad targeting will work in diverse regions such as Asia.
Written by Eileen Yu, Senior Contributing Editor

Google is opening up its alternative ad-targeting tool for public tests, taking its next steps towards creating a "privacy-first" online world devoid of third-party cookies and with stronger controls over how personal data should be collected and used. It hopes the tests will offer deeper insights on how well the interest-based targeting tool will work in diverse regions such as Asia.

Fuelled by a goal to deliver more relevant ads to consumers, businesses worldwide had been collecting voluminous user data typically via third-party cookies. This had eroded consumer trust, David Temkin, Google's director of product management for ads privacy and trust, said in a blog post Wednesday.

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Citing research from Pew Research Centre, Google said 72% of consumers believed almost everything they did online was tracked by advertisers, tech companies, and other organisations. Another 81% said potential risks they faced due to the data collection outweighed the benefits.

In fact, 40% would stop buying services from a company over privacy concerns and there had been a 50% spike year-on-year in searches for online privacy.

Temkin said: "If digital advertising doesn't evolve to address the growing concerns people have about their privacy and how their personal identity is being used, we risk the future of the free and open web."

This pushed the US tech giant to put together a two-year plan to phase out third-party cookies, which included working with industry players, publishers, and marketers on its Privacy Sandbox initiative to come up with tools that could strike a better balance between user privacy and ad revenue.

Excluded from such efforts was any attempts to build alternative identifiers to track users as they browsed the web, he said, stressing that Google had no plans to use these in its products. 

"Instead, our web products will be powered by privacy-preserving APIs that prevent individual tracking while still delivering results for advertisers and publishers," he added. "People shouldn't have to accept being tracked across the web in order to get the benefits of relevant advertising and advertisers don't need to track individual consumers across the web to get the performance benefits of digital advertising."

In particular, Google believes a technology it built offered a viable alternative to third-party cookies by grouping or "hiding" individuals amongst large crowds of people who shared similar interests.

Called Federated Learning of Cohorts (FLoC), the platform removed the need for individual identifiers whilst still enabling brands to reach people with relevant content and ads by targeting clusters of people with common interests. It would help keep an individual's web history private.

Google said its tests so far indicated that FLoC yielded a conversion rate of at least 95% for every ad dollar, compared to cookie-based advertising. Results varied according to the clustering algorithm the FLoC used and types of audience targeted. 

Asked whether it would work as well in diverse markets such as Asia, Google told ZDNet that this was what it now hoped to determine by opening up the tool for pilots.

The US tech giant said it would release FLoC for developer trials later this month, before extending the tests to include advertisers on Google Ads next quarter.

In addition, it would introduce its first iteration of new user controls next month with simple "on/off" options in its Chrome 90 release, with plans to expand these controls in future releases.

Commenting on scepticism that these efforts simply were attempts to create a walled garden, Google noted that it, too, would be impacted by the change since several of its own products including Google Ads and Display & Video 360 tapped cookies.

It added that Chrome had a responsibility to protect the privacy of its users as they accessed content via the web browser and, at the same time, believed in an ad-supported ecosystem. It said both could be achieved by working with advertisers, brands, and industry players to roll out alternative technology that did not track individuals.

It acknowledged that some organisations could continue to circumvent efforts to do so, for example, by using fingerprinting and other tracking devices to identify individuals.

It urged brands to build on their first-party data as a way to improve their engagement with consumers. Citing its commissioned research with Boston Consulting Group, Google said brands in Asia that used first-party data to create personalised experiences achieved on average 11% higher incremental annual revenue and 18% more cost savings.

It added that organisations could still deliver personalised engagement through contextual-based ads, tapping anonymised and first-party data and without impacting user privacy. 

Temkin said: "Developing strong relationships with customers has always been critical for brands to build a successful business and this becomes even more vital in a privacy-first world. We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers, and we'll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with."

He added that third-party cookies and any technology that tracked individuals should be eradicated to maintain an "open and accessible" internet in which user privacy was safeguarded.  

Temkin said: "There is no need to sacrifice relevant advertising and monetisation in order to deliver a private and secure experience."

Google noted that cookies-based ad delivery would continue to be used on its platforms until next year, after its new tools were fully tested and ready for rollout. When it does, it will follow in the footsteps of Apple's Safari and Mozilla's Firefox, which have blocked third-party cookies by default on their platforms. 


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