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A FLoC of Potential: Understanding Google’s Approach to Cohort-Based Targeting

In recent years, regulatory scrutiny has mounted against big tech players across areas spanning anti-competitive behavior and inadequate consumer privacy protections. However, Google has fast established itself as an advocate for a more “privacy-first” web driven by its Privacy Sandbox initiative that has been in the works since 2019. Given its dominant position in both the browser and digital advertising space, its moves will unavoidably impact how digital marketers are able to target consumers meaningfully. In the US alone, Google accounts for approximately a third of digital ad spend.

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That said, it should come as no surprise that there has been much chatter on Google’s recent trials of cohort-based targeting as part of an effort known as Federated Learning of Cohorts, or FLoC — one of its proposals to help marketers transition towards a cookies-less ecosystem.  FLoC creates cohorts of users who have similar interests, allowing advertisers to target them in groups while protecting the anonymity of each individual user. During its initial phase of testing, Google contended that FLoC could bring at least 95 percent of conversions per dollar spent when compared against cookie-based targeting.

While it sounds promising, Google has hit its fair share of roadblocks as it continues on its journey to make FLoC the new industry standard for the advertising ecosystem. Let’s look at why FLoC is facing so much resistance, how cohort-based targeting mechanisms can be strengthened, and the road ahead for privacy-compliant advertising industry.

Why Other Browsers Said “No Thanks” to FLoC

While accounting for almost 65.3 percent of the browser market, Google has yet to convince other browsers to adopt the open-source FLoC. Responses have been nothing short of critical, with privacy-centric Brave dubbing FLoC “a step in the wrong direction” for many reasons, but most of all citing that it should be opt-in by design. Meanwhile, Vivaldi has argued that the decision to render FLoC as an industry-standard was a “monopolistic” play on Google’s part. Larger players, including  Mozilla and Opera have more or less expressed the same.

As a whole, a running thread of consensus is the way in which FLoC is designed to place mounting responsibilities on the browser that adopts the technology. If not properly implemented and managed, sensitive user information will still be at risk of being leaked to other parties.

Why has a proposal that was looking to build a privacy-first web met with so much criticism? This brings us to the next point.

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FLoC Has Raised Lawmakers’ Eyebrows in the EU

For the majority of privacy advocates, consumer privacy protection directives in the EU have been largely touted as the industry standard with the General Data Protection Regulation (GDPR) serving as an anchor piece of legislation that has informed other privacy frameworks since it was first enacted.

This past March, Google announced that FLoC trials in the EU were delayed following privacy concerns raised by regulators in Germany, France, and Belgium. Though intended to substitute invasive consumer tracking practices, the fact that Google grouped users into cohorts without actually obtaining their content did not sit well with regulators in the bloc. If you’re located outside of Europe, there’s a small chance that you have been selected for FLoC trial as well and you might not even know it. If you’re curious, head to this website by the Electronic Frontier Foundation to check if your Chrome browser has been added to a cohort.

Furthermore, it’s not been determined which entity will act as the data controller or data processor as users browsing activities are added to the cohorts. The lack of clarity in ownership and consent acquisition has put FLoC at odds with the stringent requirements stipulated in the GDPR.

Get Ready for the Age of Data Deprecation

However, until the industry finds a way to seamlessly integrate and record all required instances of consent from users, FLoC is the best shot we have to a cookie-less age of audience targeting. It represents a viable starting point — one that will continue to experience its share of experimentation in the months to come.

From Apple’s newly launched ATT to the imminent death of third-party cookies, the digital advertising industry is entering the age of data deprecation as consumers become more aware of privacy issues and thus, more reluctant to share their data. While the months ahead will be challenging to navigate, our industry has been given a much-needed impetus to shift away from the mindset of data maximization and break free from legacy infrastructure.

In spite of its position in space, the response to Google’s FLoC proposal has shown that rearchitecting the internet is no easy feat. There is and can be no cure-all when it comes to compliant user targeting and data activation. Given the complexity of data management and increasingly stringent regulatory requirements, a holistic and compliant infrastructure requires a good combination of various privacy-centric technologies — and FLoC is only the start.

[To share your insights, please write to us at sghosh@martechseries.com]

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