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Google’s next privacy move: What you need to know

Dec 8, 2023 | Ungated Guides

Consumers want privacy

They know the value of their data in the hands of marketers, they want transparency on how their data is used, and they want more control of their data.

In 2021, the privacy movement, initiated years earlier, reached Google’s hightower.
Suddenly, what used to be a secure targeting method turned into an open battleground.

With only one swing of their sword, Google dismantled third-party cookies and changed digital advertisement as we know it.

It hit like a bomb, and panic erupted:

What would replace the so suddenly crumbled cookie?

Why all the changes?

For years, the use of third-party cookies has crossed a boundary for consumers.
While 78% in an american survey stressed a company’s ability to keep their private data safe as “extremely important”, yet 46% experience a loss in control over their data.

Such issues sparked a series of data privacy measures, like the European GDPR, as well as a general preference for browsers that honor privacy.

With a global market share at 63%, the biggest browser on the market had to chime in. And one, powerful move was to get rid of third-party cookies, the most invasive and uncontrollable cookie type, yet one of the most common.

 

%

stressed a company’s ability to keep their private data safe as “extremely important”

%

experience a loss in control over their data.

What now?

The phase-out of third-party cookies means that if you work with online advertisement, you will
soon lose the ability to track visitors’ behavior across domains from the majority of all browsers.
It means you will have to find new ways to attribute conversions.

Soon, tracking your ads’ performance outside your own platforms will become close to impossible.

However, since Google’s declared cookie exit for 2023, new initiatives to target users online have
been proposed by Google. But none have stuck. At this point, the future for replacing the condemned third-party cookie is uncertain.

 

In this mini-guide you get a quick overview of the most recent changes and proposed outcomes – and idea of how to choose the safest path to keeping up performance in the future.

Google Sandbox initiative

GDPR and similar data regulations have sparked a contest between browsers, all peacocking around to show their proud tail of privacy feathers. Google’s Sandbox initiative is one of those feathers.

The Privacy Sandbox project was born to make the seemingly unsecure web more private to users,
while continuing to enable measurement and tracking to the advertisement industry.
In other words, uniting two agendas that struggle fundamentally in co- existing – privacy and
performance.

So far, two solutions to replace cookies have been added to the sandbox.
One has already hit the grave and the other is still up for debate.

What is FLoC?

FLoC? As in how birds travel?
Yes, that’s right, or in this case, how users’ online activities travel: In groups of shared interests.

FLoC stands for Federated Learnings of Cohorts and is Google’s first attempt at bridging the gaps
in targeting and tracking after third-party cookies.

FLoC was meant to keep users’ data in anonymous buckets, or cohorts, based on their similar browsing habits. Unlike third-party cookies, FLoC was built into the browser. The data shared with websites and advertisers would only be cohort identifiers for that user’s browser, and no further information would be shared. At least, that was the plan.

Privacy groups quickly labeled FLoC as invasive and not as secure as intended. For example, Google never outlined if or how they would gather consent to FLoC, and they also announced that testing FLoC would take place outside of Europe due to GDPR concerns (?!).
These are just a few problems surfaced from FLoC.

Google Analytics is already in bad standing when it comes to complying to European privacy
standards. With FLoC, we’re seeing a pattern that suggests they might not be so pro-GDPR after all.

  • As of the 21st of January 2022, Google’s FLoC has already flunked, so don’t spend too much time on research.

What is Topics?

Take two in Google’s fumbling journey towards a future of “targeting-while- not targeting” is Topics.

Some call it a FLoC 2.0 but with some much-needed privacy updates.
Instead of placing people into cohorts, the Topics API assigns five content topics to each user’s
browser. Based on these topics, companies can create semi-personalized ads.

How does it work? In short, the Topics API picks three topics based on each user’s browsing history
and shares them with participating sites for targeting purposes. Each topic is a maximum of three
weeks old, and every three weeks, the topic is deleted

and exchanged with a new topic. This ensures some relevancy while also giving the data a much
shorter lifespan than 3rd party cookies.

Topics provides a much more private alternative to cookies, while also making some space for personalization. Sounds pretty swell, right?
Well, not exactly…

How does Topics influence your intent performance?

It’s impossible to know exactly what effect Topics will have on your intent marketing efforts –
and, like FLoC, it may be scrapped before launch.

However, we have a guess on what consequences the exit of 3rd party cookies will have for targeting and retargeting of ads.

As an estimate,
Marketers will see -70% attribution for ad spend,
Marketing Managers will see a -20% Return on Ad Spending (ROAS),
CMOs will see -10% loss of budget as less money is spent on ads, and the
CEO will see a -15% revenue loss over time.
Pretty significant.

Marketer

%

Attribution for ad spend when traffic without third-party cookies drop

Marketing Manager

%

Return on Ad Spending (ROAS) will fall as KPIs fail to be met

CMO

%

Loss of budget over time as less is spent on ads

CEO

%

Revenue loss over time

Topics is supposed to cover some of the damage.
Well, will it?
Yes and no.

 

Sure, some user data is better than no user data. But it’s a far-cry from the opportunities offered
by 3rd party cookies. And that’s the point.

The premise of Topics is that only five topics of interest are attached to each user at a time.
However, creating a unique and individual user experience based on only a handful of topics will be virtually impossible.

Think of a normal week in your life.
Maybe you use Google to search for:

  • A recipe for tonight’s dinner
  • Public transport options for a weekend out of town
  • The best brunch spot in town
  • Reviews of a show you’re watching
  • A new sweater

 

There – you have already touched on five different topics. And the recommendations you receive
based on them are unlikely to be very personal and catered to you. To ad, each of these topics
stick to your browser for three weeks, by which time they may no longer be relevant to you.

The counts roughly 350 proposed topics. And a niche interest like /Autos & Vehicles/Motor Vehicles (By Type)/Pickup Trucks sounds pretty specific. But it’s simply not detailed enough to create the nuance that marketers need to succeed in their campaigns and through their ad spend.

But while it’s a step back for intent in marketing, it’s a step forward for data privacy.
At least at first glance.

So, what about privacy?

The users demand privacy, and that’s what they get with Topics.
Or at least as much as possible while still creating space for semi-personalized ads.

In its current form, Topics helps consumers understand how their data is being used. The idea of
Topics is tangible and specific, and users can see which topics stick to their browser at any given
time. The privacy-starved consumer can delete certain topics as they wish. Or they might disable Topics altogether. It’s a great privacy perk. In order to prevent fingerprinting, a random sixth topic is also added to each user’s top five weekly topics – to create “noise” around each user’s personal interest.

However, some still question how private Topics actually is. Because while Google might delete its
information after three weeks, advertisers might not. According to Avast, there seems to be nothing stopping advertisers from collecting and sharing the data they receive from Topics.

 

This means that there are two central concerns surrounding the API – one concerning privacy, another concerning marketing performance:

  • Topics provides data that can be collected and shared by companies, just like what is common practice with third-party cookies. If this issue isn’t addressed, Topics could suffer the same fate as cookies thanks to poor protection of privacy.
  • Topics is unlikely to provide categories that are detailed enough for marketing purposes. It gives something to target ads towards, but calling it true personalization would be a stretch.

 

So, if Topics isn’t the answer, what is? In short, collecting your own data to keep up with
performance marketing in the future.

First-party data
– the key to getting to know your customers

At this point, Google’s solution is still being molded, so we encourage you to keep up to date on
the Topics API. But there is one, obvious way to combat the third-party debacle that is unaffected by Google’s moves: Collecting your own data. First-party data, that is.

A “first-party data first” strategy calls for collecting the data that exists within the realm of
your own organization – visitors on your website, members of your customer club or newsletter, customers in your physical store, and the like. It’s about organizing the data you have, learning about your customers, and activating this data in your channels for a personalized customer experience.

In fact, by renewing your digital marketing strategies in the direction of first-party data, your
business may end up performing better overall – both in terms of engagement, ROI, and consumer trust (Dept).

The demand for more data privacy has nothing to do with not wanting personalization – in fact, 71% of customers expect it. It’s about treating the data needed for personalization with respect, only taking what you need, and not sharing it with anyone else.

First-party data is the happy medium between the invasive 3rd party data and the lackluster Topics. It lets you deliver the personalized experiences customers want while respecting GDPR and other privacy initiatives.
So, how do you get the most out of your firstparty data? Here, getting a Customer Data Platform is
best practice.

Customer Data Platform

A Customer Data Platform is a single operational platform that empowers you to unify your customer touchpoints from every data source and make it available to all activation channels in your tech stack.

Instead of mindlessly shooting out ads based on topics that will never be specific enough to resonate, you need to take full advantage of all the data you have available in your own realm.

From newsletters to customer service calls. Your organization is full of data that can be organized and activated across your different channels through a CDP – and the personalization it creates will likely feel appropriately relevant and pleasant for your customers.

If you manage your data correctly, you can find the right balance between your customer’s privacy requirements and your marketing needs. And it will ultimately lead to the trust that long- term customer relationships are made of.

Don’t rely on tech giants to come up with solutions that might not come to fruition. Take control of your own data instead. The sooner you start collecting and organizing your 1st party data, the better your arsenal will be for when cookies disappear. Ready to collect?

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