Insights

FLoC Cohorts And What They Mean For Digital Marketers

By April 8, 2021No Comments

FLoC Cohorts And What They Mean For Digital Marketers

  08/04/2021

FLoC Cohorts And What They Mean For Digital Marketers

08/04/2021

In a world where consumers have become much more careful about what they share online, trust has become a crucial component to maintain a digital ecosystem that works efficiently and effectively. However, today’s advertising practices put the confidence of privacy and security of their users at risk. According to Pew Research Center study, 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits.

Taking this into account, Google Chrome has announced a new Privacy Sandbox that aims to phase out the third-party cookies to help publishers and advertisers succeed while also protecting people’s privacy without tracking them. The Google Chrome products will be empowered by the privacy-preserving support advertising engine called Federated Learning of Cohorts (FLoC), which will perform behavioural targeting without third-party cookies. The new appliance will allow users to be assigned to cohorts, which collects similar browsing behaviours to define clusters. These are homogenous user cohorts that preserve anonymity when applied to any dataset representing users and their interests, so users can be pseudonymously identified for relevant ads as particular groups. 

Melanie Valenzia,

Market Research Analyst Intern
Fact: I try to walk 10,000 steps a day

 

John Michael,

Data Science Intern
Fact: I have a passion for science

ABOUT ONEST  

Melanie Valenzia,

Market Research Analyst Intern
Fact: I try to walk 10,000 steps a day

 

John Michael,

Data Science Intern
Fact: I have a passion for science

ABOUT ONEST  

In a world where consumers have become much more careful about what they share online, trust has become a crucial component to maintain a digital ecosystem that works efficiently and effectively. However, today’s advertising practices put the confidence of privacy and security of their users at risk. According to Pew Research Center study, 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits.

 

Taking this into account, Google Chrome has announced a new Privacy Sandbox that aims to phase out the third-party cookies to help publishers and advertisers succeed while also protecting people’s privacy without tracking them. The Google Chrome products will be empowered by the privacy-preserving support advertising engine called Federated Learning of Cohorts (FLoC), which will perform behavioural targeting without third-party cookies. The new appliance will allow users to be assigned to cohorts, which collects similar browsing behaviours to define clusters. These are homogenous user cohorts that preserve anonymity when applied to any dataset representing users and their interests, so users can be pseudonymously identified for relevant ads as particular groups. 

How will this affect advertisers and digital marketers?

FLoC will replace third-party cookie data on Google Chrome and in turn, may drastically change PPC strategies and the current form of remarketing. Furthermore, it may significantly impact digital marketers in terms of revenue. According to Google Ads, cookie-less traffic yielded an average of 52% less revenue for the ad publisher. Because of this, the use of first-party data will become more critical. Marketers will have to work much harder to analyse first-party data to understand their users’ personalities. This means that they will need to re-think and re-build new customer data platforms, which will assist them in understanding the similarities and differences between the various cohorts.

Conversion tracking is an important element of a PPC strategy and without the ability to track user behaviour, marketers will have less of an opportunity to assess the effectiveness of their campaign or advert. Moreover, using a cohort system may lead users to receive less relevant ads, which in turn would compromise important KPIs like click-through-rates or returning visitors. However, Google has reported that FLoC cohorts will be re-calculated weekly using data from the previous week’s browsing. This would reveal more potent measures of how users behave over a longer period and may allow marketers to build more of a long-term strategy.

Looking Forward 

Google claims that the current test runs of FLoC show that advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising. Although this sounds very promising, we need to await the results of other tools in the Privacy Sandbox to fully understand its efficiency and further capabilities. Furthermore, there is more to be understood about how FLoC will handle direct campaign performance measurements. 

The UK’s Competition and Markets Authority (CMA) are also undergoing an investigation into these changes after it received several complaints about how this new way of handling data could impact competition.

Despite this, Google has stated that they are “more confident than ever that the Privacy Sandbox is the best path forward to improve privacy for web users while ensuring publishers can earn what they need to fund great content and advertisers can reach the right people for their products”.

References:
Google to Stop Selling Ads Based on Your Specific Web Browsing.  
https://www.wsj.com/articles/google-to-stop-selling-ads-based-on-your-specific-web-browsing-11614780021
Google promises to drop personalised ad tracking.  
https://www.bbc.com/news/technology-56267425
WTF is Federated Learning
https://digiday.com/media/what-is-federated-learning/
Building a privacy-first future for web advertising
https://blog.google/products/ads-commerce/2021-01-privacy-sandbox/
Google says it won’t use new ways of tracking you as it phases out browser cookies for ads
https://www.cnbc.com/2021/03/03/google-says-it-wont-track-you-directly-in-the-future-as-it-phases-out-cookies.html
Building a more private web: A path towards making third party cookies obsolete
https://blog.chromium.org/2020/01/building-more-private-web-path-towards.html
Building a more private web
https://www.blog.google/products/chrome/building-a-more-private-web/
Evaluation of Cohort Algorithms for the FLoC API
https://github.com/google/ads-privacy/tree/master/proposals/FLoC
Google’s FLoC Is a Terrible Idea
https://www.eff.org/deeplinks/2021/03/googles-floc-terrible-idea
How Will FLoC Affect Your PPC Strategy When Third-Party Cookies Die?
https://www.adzooma.com/blog/floc-ppc-strategy-third-party-cookies/

Conversion tracking is an important element of a PPC strategy and without the ability to track user behaviour, marketers will have less of an opportunity to assess the effectiveness of their campaign or advert. Moreover, using a cohort system may lead users to receive less relevant ads, which in turn would compromise important KPIs like click-through-rates or returning visitors. However, Google has reported that FLoC cohorts will be re-calculated weekly using data from the previous week’s browsing. This would reveal more potent measures of how users behave over a longer period and may allow marketers to build more of a long-term strategy.

Looking Forward 

Google claims that the current test runs of FLoC show that advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising. Although this sounds very promising, we need to await the results of other tools in the Privacy Sandbox to fully understand its efficiency and further capabilities. Furthermore, there is more to be understood about how FLoC will handle direct campaign performance measurements. 

The UK’s Competition and Markets Authority (CMA) are also undergoing an investigation into these changes after it received several complaints about how this new way of handling data could impact competition.

Despite this, Google has stated that they are “more confident than ever that the Privacy Sandbox is the best path forward to improve privacy for web users while ensuring publishers can earn what they need to fund great content and advertisers can reach the right people for their products”.

FLoC Cohorts And What They Mean For Digital Marketers

| Insights | No Comments
FLoC Cohorts And What They Mean For Digital Marketers   08/04/2021 FLoC Cohorts And What They Mean For Digital Marketers 08/04/2021In a world where consumers have become much more careful…

Ramadan 2021: Implementing social media tools to connect with your customer

| Insights | No Comments
Ramadan 2021: Implementing social media tools to connect with your customer   30/03/2021 Ramadan 2021: Implementing social media tools to connect with your customer 30/03/2021In the UAE, 63% of those…

New COVID-19 Measures

| Insights | No Comments
Local Perception on the New COVID-19 Measures   25/03/2021 The Public's Perception on the New COVID-19 Measures 25/03/2021On March 4th 2021, the Maltese government announced new measures to combat the…

How COVID-19 has shifted consumer behaviour and what this means for Ramadan 2021

| Insights | No Comments
How COVID-19 has shifted consumer behaviour and what this means for Ramadan 2021     18/03/2021 How COVID-19 has shifted consumer behaviour and what this means for Ramadan 2021 18/03/2021The…

Sign up and get groundbreaking insight
into your industry

Leave a Reply