BEWARE! The Impact of Google's 3rd Party Cookie Removal
What Are Cookies?
For over 15 years, websites have been using cookies to track website visitors, collect data and improve the user experience. The collection of data via tracking cookies has allowed marketers to target ads to audiences. These cookies are used to learn what users are checking out on different websites.
Not All Cookies Are The Same!
Cookies are managed differently depending on the browser (Chrome, Safari, Firefox) and have different permissions default and editable settings. Essentially, cookies are pieces of code by a website that works with a user's web browser.
Apple Safari and Mozilla Firefox started implementing a phaseout in 2013 and have since blocked all third-party cookies.
Google announced in January 2020 that Chrome would no longer support third-party cookies, and a complete phaseout is expected by 2022. The browser held 64.9% of the mobile browser share. Consequently, Chrome's removal of third-party cookies will have the most substantial impact on the advertising industry to date.
The New Google FLoC Non-Cookie
Google plans to target ads against people's general interests using an AI system called Federated Learning of Cohorts (FLoC). The machine learning system takes your web history, among other things, and puts you into a particular group based on your interests. Google hasn't defined what these groups will be yet, but they will include thousands of people with similar interests. Advertisers will then be able to put ads in front of people based on the group they're in rather than the specific site they visited. If Google's AI works out if you like crystals, for example, then you'll be aggregated into a group with other similarly-minded Crystal fans.
While FLoC means less personal data is being sent to third parties, as with the current cookie setup, there are concerns about how people will be grouped together and whether the automated process that does this will discriminate against certain groups.
Google will start beta testing FloC in March but will only use websites that have tracking enabled or are already serving display advertising.
Chrome intends to make FLoC-based colleagues available for public testing through trials with its next release in March and to begin testing FLoC-based advertising in Google Ads in Q2.
Some Outcomes
Publishers have adapted to relying less on third-party cookies within their targeting suite. They've done so by sharpening the strength of their first-party data (subscribe requests), built from site visitors, and amplifying their ability target.
Ultimately, this non-third party option hurts the little advertiser and helps platforms such as Facebook, TikTok, and YouTube, where the customer data is own with the customers' approval (called first-party data).
Under the Privacy banner (blocking third-party cookies) there becomes a wider gap between walled gardens (Facebook / TikTok) and what they can do versus the open internet.
Eliminating third-party cookies will likely push advertisers to rely on logins and user accounts to collect their first-party data on their own. The result centralizes control of the data with a smaller and smaller group of huge companies, who are more likely to misuse the data and harm people in the process.
The Take-Away
When third-party cookies are removed, companies that collect first-party data (Google, Youtube, Facebook) might target advertisements better. For instance, when logged into a news website, that site will be able to collect data about what you read and understand your interests. That means it can show advertising that may be more relevant to you as an individual – the more relevant an ad, the more money it can make.