Google has said it plans to end individual tracking on the open web. Chris Charman considers some next steps for advertisers.

On 3 March 2020, Google dropped another cookie-based announcement, ending speculation that it was privately creating a user ID alternative to cookies, and paving the way for ending individual tracking on the open web.

As well as confirming it isn’t creating its own tracking solution, Google also said it won’t support alternative individual tracking solutions created by non-Google entities in its ad ecosystem either.

I’ve spent the last 24 hours reading and re-reading the announcement, scanning some of the immediate industry responses and talking to my colleagues at LEAD Digital Consulting to interpret what this really means for advertisers.

Understanding what isn’t changing (as it stands)

Google is still allowing the targeting of individuals by using first-party data collected by publishers and websites. When users are logged in with a publisher, they are contributing to their first-party data record, and advertisers will still be able to target on those websites based on usage characteristics.

As it stands, YouTube, Google search and Google in-app advertising aren’t affected by this announcement because they are standalone websites with their own first-party data set.

In addition to accessing publisher/website first-party data for targeting individuals, advertisers will still be able to use their own first-party data to target their customers on Google properties. We wrote in May 2020 that advertisers should start to prepare their first-party data strategy for the demise of cookies, and that advice hasn’t changed.

This isn’t the end of targeting individuals with digital advertising. It’s just the end of doing so across multiple publishers/websites within the Google ad ecosystem.

Understanding FLoCs

Google still wants to enable personalised targeting on the open web, just not at an individual level.

The Federal Learning of Cohorts (FLoCs) are one of the solutions being released as part of the Google Privacy Sandbox initiative and an alternative to cookie-based targeting. Rather than being able to target individuals, advertisers will be able to target groups of individuals with similar browsing behaviours.

Google positions FLoCs as ‘privacy-first’ because the assignment of users into FLoCs happens on their device rather than in the ad tech ecosystem. It expects to release FloCs in Google Ads in Q2 2021, allowing advertisers to begin trialling them far in advance of the changes to cookies and Chrome.

Google has announced results purporting 95% effectiveness when compared with cookie-based solutions, although the effectiveness is likely to vary by advertiser and objective, meaning advertisers must test them out for themselves. Privacy campaigners have already raised concerns about a number of new issues this creates, and advertisers must be aware of these and ensure they’re mitigating for these risks.

Understanding the supply-side

It’s important for advertisers to also look beyond the buy-side of the supply chain and evaluate the sell-side to understand what could change. Advertisers may believe that because they are not buying through Google’s DSP that they are not impacted. However, even when using a non-Google DSP, ads may still pass through the Google SSP (which also won’t support cross-site individual-level targeting).

Publishers/websites with large amounts of quality first-party data will still be able to offer audience-based buys to advertisers, but those who don’t have that first-party data relationship with their audience won’t be able to individually target users in the same way they have been previously.

Since the advent of programmatic, the relationship between advertisers and agencies and publishers has diminished, as advertisers no longer needed direct interaction to purchase a publisher’s audience. This will change as a result of Google’s announcement and restore power to premium publishers with quality first-party data scale.

Advertisers or agencies without strong relationships with publishers will undoubtedly find adapting more difficult.

Stay tuned

There are more solutions on the release roadmap for the Google Privacy Sandbox over the coming months and the layout of Google’s future ad ecosystem will evolve as these changes are announced.

Continuing to rely on persistent ID-based targeting solutions across the web is not a future-proof strategy for advertisers. Given ongoing privacy legislation and industry initiatives, advertisers must accept these changes and, rather than look for workarounds, concentrate on maximising first-party audiences.

Research has shown that customers accept use of their data as long as it is used transparently. Advertisers should explain the value exchange to their customers to increase opt-in, and respect their data when activating it.

One option for advertisers is to look outside the Google ecosystem for advertising platforms that will still support cross-site identity. Yet even if these provide a short-term fix it’s unlikely that they’ll stand the test of time against growing regulatory and public pressure.