Google may have a cookie substitute

Sara Fischer

WASHINGTON DC: Google on Monday said new test results show promising signs that the technology it hopes will replace cookie-based ad targeting is working, Axios’ Sara Fischer reports.

Why it matters: Google and web browser rivals Apple and Mozilla have all introduced sweeping privacy changes recently that will collectively phase out cookies, an internet tracking tool that tracks users’ web browsing history.

Catch up quick: For decades, cookies have been the primary way most adv-ertisers target users online, but privacy concerns are sending Silicon Valley in search of a replacement.

That’s a massive challenge, given that the entire digital ad ecosystem, worth $330 billion globally, is mostly built around cookies.

Details: Google has been testing what it’s calling Federated Learning of Cohorts (FLoC), an alternative to the individualized tracking and targeting functions of cookies. FLoC will run as a browser extension within Google Chrome.

FLoC is an application programming interface (API) that uses machine-learning algorithms to analyze the sites people visit and then create groups of thousands of users based on shared interests.

Ads can then be targeted to those groups. The data gathered locally from each user’s browser is never shared. In tests, Google found that FLoC came just shy of matching the revenue potential of cookies.

Be smart: An effective replacement for cookies has proven elusive. It’s a big deal if Google is close to delivering one.

Many publishers have started to lean into using first-party data, or data uploaded to a site directly from the user, to target ads instead.

But not all publishers have strong enough customer relationships to gather such data.

The big picture: Google’s privacy efforts join sweeping changes from Apple similarly aimed at making it harder to track individual user data online. The backdrop of all this is a growing global call for online privacy rights.

Facebook has slammed Apple for abruptly rolling out big changes to its user-tracking functions.

Chetna Bindra, Google’s head of user trust and privacy for advertising, told Axios that Google is looking to work with online advertisers to ease them into a cookie alternative. Google is intent on “really leaning into the kind of collaboration that’s critical to make such massive change,” she said.

What’s next: Google has other proposals to replace cookies in the works, so it’s not guaranteed that FLoC will be the answer, but the company said it’s highly encouraged by what it has seen so far. (Axios)

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