Online privacy has been a growing concern among consumers since the internet began. In recent years, increased scrutiny has forced tech giants like Facebook and Apple to address how they collect and share the data they have on individual behavior across the web.
The latest major update to user privacy comes from the world’s largest digital advertising company, Google. In March, they announced their plans to completely phase out third-party cookies and any alternate identifiers that track individuals as they browse the internet.
This update comes as the latest development to Google’s Privacy Sandbox initiative, which began as a mission to create a more private experience that allows users to browse securely while still offering advertisers the targeting they need to be successful.
The Elimination of Third-Party Cookies
Third-Party Cookies, or cookies created by a website other than the one a user is visiting, are used by advertisers to track and collect information about a user’s behavior and interests as they navigate from site-to-site. They’re also the vehicle behind many live chat tools.
These cookies allow companies to track users across the web and get in-depth insights into their behavior, such as what products they view or websites they frequent. While they may allow for a more personalized user experience, many feel like they are an invasion of privacy.
The shift by Google to completely phase out third-party cookies on Google Chrome browsers by 2022 comes after similar changes were made recently by other popular web browsers Mozilla Firefox and Safari. The slow rollout results from Google working directly with advertisers to ensure that the change doesn’t completely destroy online advertising. Google Chrome is by far the most popular web browser in the world and any major changes must be handled with care.
What does this mean for advertisers?
While Google says it won’t invest any further in any cross-site tracking technology that monitors users on an individual level, they still plan to collect user data on a broad level. Testing is currently in progress for a new technology called Federated Learned of Cohorts (FloC), which groups individuals into large clusters based on their behavior across the web.
This new technology is part of an effort by Google to ensure that advertisers are still able to serve users with highly relevant content while maintaining the privacy of its users. FloC will allow users to be grouped into large clusters (or cohorts) based on their behavior while still maintaining anonymity.
According to Google, advertisers can expect interest-based advertising with FloC to deliver “at least 95% of the conversions per dollar spent when compared to cookie-based advertising.”
If these numbers hold true, the shift to FloC shouldn’t have much of a negative impact on advertisers.
Although Google plans to eliminate any usage of third-party cookies, it doesn’t have any plans to eliminate first-party cookies for now. That means advertisers are still free to leverage site data like pages a user views, the browser a user is on, and other basic analytics used throughout remarketing campaigns. It’s unlikely that these cookies will go anywhere soon as Google reinforced the importance of first-party relationships between brands and consumers in their latest update.
The Future of Digital Advertising
Since major browsers like Safari and Firefox had already made the shift to eliminate third-party cookies, many saw this move by Google coming. Many advertisers already rely on data from first-party cookies for their campaigns or use other interest-based targeting methods, so the impact of these changes isn’t too harsh.
However, if any of your advertising campaigns utilize third-party data now, you should start considering other options so you’re prepared once the changes are implemented fully next year.
User privacy concerns are only going to grow as technology becomes more and more sophisticated. It’s important that you stay up-to-date on the latest privacy changes made by major platforms like Google, Facebook, and any others you advertise on so you’re aware of any impacts they may have on your campaigns.
Another thing to keep in mind is the amount you should spend on each of these platforms can vary greatly depending on whether you’re a B2B or B2C company, the industry you serve, the size of your company, and so on. For expert guidance on how much you should budget for each digital advertising platform, click the button below.