A proposed alternative to third party cookies may provide insights into the future of targeted ads.
Modern digital advertising targeting is determined by private and individual information. An online retailer, for example, can use networks such as Google or Facebook to target prospective clients. Some trade companies — omnichannel retailers, ecommerce merchants, wholesalers — have become dependent on these sorts of ads.
But, cookie-based targeting creates privacy problems. Imagine you have seen a web page that included a Facebook”such as” button. That button probably placed a third party cookie from your browser so that Facebook could track your movements.
Knowing exactly which sites you visited would be great for advertisers, but it might be somewhat disconcerting to know that Facebook now possessed all your surfing history.
End of Third-party Cookies
Privacy issues have led to new laws such as the European Union’s General Data Protection Legislation, the California Consumer Privacy Act, Virginia’s Consumer Data Protection Act, and similar.
These laws and expanding customer privacy concerns have led the producers of popular internet browsers such as Apple Safari, Mozilla Firefox, Brave, and Google Chrome to disallow third-party cookies today or in the not too distant future.
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The conclusion of third-party cookies could end personally targeted ads.
What is FLoC?
Google has proposed several new standards that would work together to provide effective ad targeting and deal with some privacy problems. Included in these proposals is something called Federated Learning of Cohorts, or FLoC.
Federated learning is an artificial intelligence technique that transmits data across a system of decentralized apparatus without sharing that data beyond the device. Google has explained FLoC in detail in articles and papers, such as:
- “Assessment of Cohort Algorithms for the FLoC API,”
- “Federated Learning of Cohorts (FLoC),”
- “Building a Privacy-first Future for Internet Marketing .”
Basically, FLoC would function in a web browser. Google is now testing it in a couple million instances of Chrome. (You can examine your Chrome browser to find out if FLoC is current ).
The FLoC algorithm would monitor someone’s browser behavior and sort that individual into large groups or cohorts of individuals with similar interests. 1 person might be related to many cohorts.
While an individual’s personal background would not leave the browser, Chrome would share cohort tags with advertisers and sites for targeting.
Targeted Ads Live
FLoC and the discussion around it may offer some insights into the future of targeted advertisements. And that future could be important for ecommerce retailers and wholesalers.
The first penetration could be that targeted ads will most likely exist following the conclusion of third-party tracking cookies.
Google generated $146 billion in advertising revenue in 2020. Ad targeting almost certainly played a role. Google doesn’t have to stop earning advertising revenue, based on FLoC.
“It’s tough to conceive of the net we know today — with information on every subject, in each language, in the hands of millions of people — with no commercials as its economic foundation,” wrote David Temkin, Google’s director of product management, advertisements solitude, and confidence, in a March 2021 post.
But”people shouldn’t have to accept being tracked throughout the internet to discover the benefits of relevant advertising. And advertisers don’t need to track individual consumers throughout the internet to obtain the performance benefits of digital advertisements,” Temkin wrote.
With FLoC alongside other proposals, targeted and relevant ads will outlive tracking cookies.
FLoC and similar proposals, however, have not ended the debate. That’s the second insight.
In a post titled”Google’s FLoC Is a Bad Idea,” Bennett Cyphers, a staff technologist at the Electronic Frontier Foundation, a nonprofit privacy group, wrote:
“FLoC is supposed to be a new approach to make your browser do the profiling that third party trackers used to perform themselvesIn this circumstance, boiling down your current browsing activity to a behavioral label, and then sharing it with advertisers and sites. The technology will avoid the privacy risks of third party cookies, but it will create new ones in the process. It might also exacerbate many of the worst non-privacy problems with behavioral ads, including discrimination and predatory targeting.”
One possible issue with FLoC is that there are not any cohorts to begin with. Rather the algorithm could create cohorts around behavior. Thus FLoC could make and talk cohorts with disconcerting labels. Cyphers continued:
“Ideally (for advertisers), FLoC will create courses that have purposeful behaviours and interests in common. But online behavior is related to all kinds of sensitive characteristics — demographics such as gender, ethnicity, age, and income;’big 5′ personality traits; even emotional wellbeing. It is highly possible that FLoC will place users along some of those axes also. FLoC groupings can also directly reflect visits to websites connected with chemical abuse, financial hardship, or support for survivors of trauma.”
Certainly, some people are concerned about FLoC. Actually, DuckDuckGo, the search engine, has declared that its Chrome expansion will obstruct FLoC.
Thus the talks of FLoC show the battle surrounding tracking cookies will continue.
Advertisement Targeting Alternatives
The takeaway for advertisers may be to prepare for changes in marketing efficiency and search for targeting options.