Google is expected to deprecate third-party cookies, but what cookieless alternatives will take their place? That’s what the ad tech industry is hammering out now and why the road to the post-cookie future keeps twisting and turning. The latest twist? Google announced in January it was doing away with FLoC (Federated Learning of Cohorts) in favor of Google Topics.
Google Topics, a New Cookieless Advertising Alternative
Google Topics is a proposed cookieless alternative that incorporates FLoC insights and feedback and takes a broader approach to interest-based advertising, and it’s one of several Google proposals in its Privacy Sandbox, hoping to fill the void soon to be left by the deprecation of third-party cookies.
Topics is a way audience targeting continues to exist in a more privacy-safe world because it offers a lagging or semi-persistent contextual signal: Consumers see relevant ads without having to share who they are or the sites they’ve visited.
According to Google, the Topics API will be a transparent tracking mechanism. Consumers will be able to see the information that’s being shared about them, and it will be generic enough that it shouldn’t raise concerns like some of the details third-party cookies attribute to an individual. However, Topics alone will not alleviate consumers’ concerns about ad frequency in terms of being inundated with the same messaging.
Yet Google isn’t trying to create one single API that will solve all when it comes to the consumer experience. Instead, that will come from the combination of Privacy Sandbox proposals and how well they work together. While this doesn’t make things easier, it’ll offer better privacy and better infrastructure, where consumers have hopefully more control than they do today. Combining Topics, FLEDGE and the Measurement API will give us a better assessment of what the consumer experience will look like.
How Google Topics Works
1) Participating websites will be assigned a topic label from a Google Topics list, which is being compiled now (but will exclude sensitive categories such as race, gender, religion, etc.).
2) Using your device’s browser history, your browser will determine your top interests for the week based on the Topics list and will store this info on your device for three weeks before deleting it.
3) When you visit a participating site, Topics will select your top three topics (one from each of the last three weeks based on the most frequent topics from all the websites you’ve visited) to share with both the site and its advertisers. The good news is you’ll be able to see and remove your topics from the browser or even delete the feature entirely.
How Google Topics Will Affect the Digital Media Industry
Independent ad tech is the most impacted. Will buyers and publishers have to reassess their role in their buying practice and the value proposition they bring with or without signals? Likely yes. This isn’t due to Google announcing Topics; this is because we’re deprecating the third-party cookie.
From the buy side, Google Topics is a signal, and it’s a signal we have that we can react to, but how well it works remains to be seen. The testing phase has yet to begin.
On the other side, publishers have to adopt Topics for it to scale, and there’s far less information being shared. So the value proposition compared to say FLoC or to third-party cookies is definitely more limited for now.
I would put two publisher lenses on this – a long-tail publisher lens and a top-tier publisher lens, and I don’t think the two are the same. Long-tail publishers are more likely to adopt a Topics-like API. But I think top publishers will need to see Topics, FLEDGE and Measurement come together to truly assess its value proposition. One stand-alone API is potentially not going to pass muster. Top publishers can pull their weight for direct buys. They have relationships with top brands, can curate their own segments and may have a more addressable market. Yet not every publisher has the resources to provide these capabilities.
The tug of war is, can this alternative appease all industry players in order to get scalability? Time will tell.
Advertisers and Brands in a Post-Cookie World
When third-party cookies go away, it’s unlikely there will be the ad tech collaboration and alignment we need to take a unified cookieless alternative approach or stance, especially across browsers. Ultimately, we’re going to have to navigate in a world where – depending on where you are, how you market, and how you target and measure – advertising will not be similar.
We’ll end up having Safari and Apple with their app SDK (software developer kit) and Google with Chrome’s APIs in the Privacy Sandbox. Then individual browsers may build something similar to Google tools or take their own approach or another creative path. It’s going to be a collection of different alternatives that advertisers and brands will have to choose from to strike a successful path forward.
There’s going to be an addressable market – a smaller but valuable one. Alternatively, there’s going to be a large less addressable market that relied on third-party signals for value, and that value will need to be reinvented with new cookieless advertising alternatives.
We have advertising mediums where we don’t have the same level of assumed measurement we have in digital. We trade on economies of scale there, and we determine measurement effectiveness in different capacities. For me, targeting is less the leading measure. Measurement and attribution are truly what will determine what approaches and alternative solutions are or aren’t effective. Those will be done through incrementality effectiveness studies, far more informative or directional approaches added onto great addressable measurement solutions where you do have one-to-one measurement. It’s going to be a combination of art and science. From the advertising and brand side, we’re prioritizing measurement and attribution that will show us directionally how to target.
How To Be Ready for Third-Party Cookie Deprecation
5 Steps Advertisers and Brands Can Take Now
1) Examine Your Reporting Foundation.
Ensure your reporting foundation is intact to provide clear benchmarks with these new targeting solutions. Account for seasonal trends and external factors to prepare for a post-cookie world.
2) Understand Available Targeting Topics.
Understand the topic labels available that will be used for targeting and how they map to your customer personas, attributes and consumer journey.
3) Test Proven Targeting Solutions.
Test proven targeting solutions now, especially contextual.
4) Partner With Publishers.
Consider testing publisher-direct deals now and gain access to publishers’ research based not only on content but also on core users’ demographics. Furthermore, understand the granularity in placement.
5) Expand Your Media Horizons.
Think about testing or expanding into advertising mediums such as connected TV (CTV), which doesn’t rely on cookies or any of the traditional web-based targeting tactics.
What else can you do to prepare for the future of identity – to ensure your targeting and measurement strategies are strong? Contact us for a free assessment. Or visit our identity hub to view our latest guides to POVs to blogs to infographics – all made to fuel and accelerate your digital media knowledge and understanding now.
No matter how cookieless advertising shapes up, I feel confident the ad tech industry will adapt and reinvent as it always has. I believe our industry will build solid methodology and figure out how to adjust to the new normal.
Amanda Martin is SVP, Corporate Development & Strategic Partnerships at Goodway Group. She works with programmatic leaders worldwide to translate complex digital products into solutions that help advertisers bridge the gap between successful digital media and real business results. With an ever-watchful eye on emerging trends in the digital landscape, Amanda is known for empowering others with the insights and tactical tools that catapult companies and careers to the next level.