Google says it may have found a privacy-friendly substitute to cookies

Google says it may have found a privacy-friendly substitute to cookies

On Monday, Google announced new test results that signal its technology to be able to replace cookie-based ad targeting is working.

• See also “Proposals of Google Privacy Sandbox remains revenue but poor privacy”

Why it matters: Google and web browser rivals Apple and Mozilla have all introduced significant privacy changes recently that will take off cookies - a tool that tracks users' web browsing history.

Catch up quick: Cookies are considered third-party data, or user data that is collected indirectly from users through browsers or websites. Third-party data is often bought and sold at different scales via online data exchanges.

For a long time, cookies have been the primary key that most advertisers use to target users online, but privacy issues are more and more appreciated and make it less possible in the future.

A massive challenge is given to find a replacement for cookies because the entire digital ad ecosystem, worth $330 billion USD globally, has been mostly built around cookies. This is also a reason why to have good online website testing results, improve online website performance testing you need to reduce cookie size. 

Details: Google has been testing Federated Learning of Cohorts (FLoC) which is developed to replace third-party cookies. 

Through the test, the company states that advertisers can expect to see at least 95% of the conversions per dollar spent on ads when compared to cookie-based advertising.

The data gathered locally from the browser is never shared. Instead, the data from the much wider cohort of thousands of people are shared, and that is then used to target ads.

Be smart: It's a big deal that Google needs to face because there has not been a great solution for what to replace them with.

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 in fact, not all publishers have strong enough customer relationships to gather such data and would have been frozen without the ability to use some sort of anatomized data to target people with ads. This is a part of the greater effort of Google to invent Privacy Sandbox," a proposed set of rules to phase out cookies in a privacy-friendly manner

The big picture: Google's privacy efforts are happening alongside sweeping changes from Apple that similarly make it harder to track individual user data online. These major changes come amid a privacy reckoning in the U.S. and in Europe over online data.

Google is trying to conduct its great approach to its privacy changes than Apple, which has been criticized for rolling out huge changes to its "Identifier for Advertisers" (IDFA) user tracking feature without providing advertisers a better alternative.

Chetna Bindra, Google's head of user trust and privacy for advertising, said that an industry-first approach created more significant things for Google.

She said that the way they saw it was that there was a lot of technical innovation at the heart of this, and what they had been focusing on was not blocking 3rd-party cookies right away. They were intent on engaging the entire advertising community and really leaning into the kind of collaboration that was critical to making such a massive change.

What's next: Google gives other proposals to replace cookies, so it is not guaranteed that FLoC will be the best solution, but the company said it's highly encouraged by what it has seen so far.