What Google Privacy Changes May Mean
User privacy has been at the forefront of conversations in the digital marketing world for the past couple years, driven by an increased number of inquiries into tech company practices, new regulations like the GDPR and CCPA, and shifts in the ways popular tech products like social media and browsers operate. In recent months, Google and Apple have both announced multiple changes to their products aimed at reducing – or outright eliminating – online tracking using individual user data. User identifiers like third-party cookies and unique device IDs have long been the standard for the advertising industry.
Why are Major Tech Players Pulling Away from User Identifiers?
A recent survey by Pew Research Center found that 81% of those surveyed felt that “potential risks of collecting data about them outweighs the benefits,” making the practice overwhelmingly detrimental to consumer trust. In their announcement in March 2021, Google revealed that they will not be pursuing a replacement for user-level identifiers once the third-party cookies are retired. Instead, the company has launched a Privacy Sandbox to come up with alternative innovations that can help advertisers and publishers understand the value of online activities while still preserving user privacy. As the largest advertising company in the world, this announcement will be influential in redefining future industry standards.
What Does This Mean for Advertisers?
Two areas of digital marketing will be primarily affected by changes to third-party cookies: measurement and audience targeting. Although Google is one of the largest players across advertising formats, other stacks may not necessarily follow suit exactly (this piece will primarily focus on solutions to advertising within Google’s ecosystem).
- Impacts on Measurement Capabilities
Although we don’t know for sure what will replace third-party cookies, there have been a number of more durable tracking methods that have been adopted by Google and others in the industry. These include tracking via first-party cookies and HTTP cookies, both of which provide more opportunities for users to explicitly consent to tracking and usage of their data. Google indicated that they will be deepening support for advertisers activating their first party data. Advertisers who are able to collect and make use of their first party data via solutions like Offline Conversions API, Google Analytics and Adobe Analytics, or Big Query/Ads Data Hub are likely to have more robust insights and ad activation in the future.
- Impacts on Targeting Capabilities
We anticipate the implications of these changes to range by ad format. Where Search may see a smaller impact given its primary targeting method is keywords rather than audiences, Social and Programmatic may be more heavily affected due to their reliance on audience segments. It is likely that ad serving and analytics products will become more consolidated along the lines of companies who are already large data powerhouses. Companies like Google, Facebook, and Amazon may become even more focused on data and advertising products powered by their own first-party data within their respective networks. Tying consumers across platforms with advertisers' own first-party can play an important role in better resonating with potential customers across platforms. Google and other platforms typically allow advertisers to upload their first-party audience segments via solutions like Customer Match to make them actionable when it comes to ad serving.
- Impacts of New Technology
For both measurement and targeting, it is likely that we will see a proliferation of modelled data that can help advertisers gain an edge in ad serving. Google indicated that a technology called “FLoC” (the Federated Learning of Cohorts) might be at the forefront of its own solution, with the first FLoC-based cohorts available for testing in Google Ads as soon as Q2 2021. Rather than relying on tracking an individual via third-party cookies, this technology would use machine learning to create targeted interest cohorts for particular topics. Modelled conversion data similar to what Google implemented in response to Safari and Firefox privacy changes is expected to expand to cover users on Chrome browsers, as well.
What Should I Do To Prepare?
In the short term, ensure that you are using durable tracking methods. For Google, this includes Google’s universal tag that can help with tracking across Google Ads, Google Analytics, etc. At the same time, expect to see more modelled data within platforms like Google Ads.
Evaluate opportunities to collect and leverage first-party data via tools like Offline Conversion matching and audience building products like Customer Match.
Test into bid automation with Google to supplement advertiser-level data with Google’s proprietary data.
Test into cohort interest audiences in Google’s ad serving platforms once they become available later this year.
Be open to testing and learning about additional solutions across platforms in the upcoming months as more developments come out.
If you have any further questions or concerns about the impact of Google’s privacy changes on your business, reach out to Rise.