Is Google’s Cookie-Based Tracking Solution the Real Deal? Here’s Our Take.
According to a recent statement by Google, their new Federated Learning of Cohorts (FloC) software may be an effective replacement to third-party cookies, which have been collectively phasing-out over the last year. Learn what Ovative’s take is on FloC and what you can do in the meantime while cookie replacement solutions continue to evolve.
Why is Google Replacing Third-Party Cookies?
Due to sweeping privacy concerns and regulations, browsers have been collectively phasing out cookie-based tracking, which marketers have used for decades to analyze users’ individual browsing behavior to make informed targeting decisions. This shift has forced advertisers to find new solutions in order to view their customers’ path to purchase and measure the impact of marketing. For more information on what this means for the modern-day marketer, check out Alex Meyers’ article Death of the Cookie.
What is FLoC and How is it Different Than Cookie-Based Tracking?
Still in the testing phase, Google’s API software would exist as an extension of Chrome and use machine learning algorithms to group users into cohorts based on their browsing behavior. Theoretically, this would hide an individual user in the larger crowd, therefore protecting the user’s privacy. A potential effective replacement for cookies, simulations show that advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based tracking.
What is Ovative’s Take On This?
Though a replacement for third-party cookies will undoubtedly play a large role in personalized marketing and measurement of marketing at the individual level, wide adoption of any one solution will take some time. While Google’s potential solution is in the early stages, find out what the experts at Ovative are thinking about FloC based on information released to date.
1. Limited Individual Targeting
FLoC relies on probabilistic identifiers, which aggregates large groups based on anonymous data points, rather than deterministic identifiers which are based on identifiable data about a specific user. Because there is no finite way to determine who the data points belong to with probabilistic identifiers, this solution does not solve for measurement at the individual level. Privacy changes will continue to create holes in multi-touch attribution data that will need be filled with additional measurement tools like media mix modeling.
2. Limited Responsive Ad Granularity
FLoC’s non-user level targeting may limit the granularity at which responsive ads are tailored to specific users.
3. Incrementality Testing Challenges
Without the ability to target specific users, it may be more difficult to run incrementality tests through Google and other platforms that previously relied on cookies. This will likely increase the popularity of Geo-based incrementality testing, which relies less on cookies but is also less than perfect depending on granularity.
Since this is a Chrome extension, this would push marketers to be more Google-centric with their media spend, which could impact browsers like Safari and Firefox.
What Should You Do in the Meantime?
This limbo period is an opportunity for marketers to leverage other tools available to them. For now, we advise grounding your media strategy with first and zero-party-data, to avoid any disturbances with the cookie phase-out. Using data your customers have chosen to provide you is more likely to be persistent, accurate, and privacy protected.
For more insights, keep an eye out for Google and industry updates on FLoC and for updates from Ovative on evolving cookie-based tracking solutions.
Ovative is a digital-first media and measurement firm seeking to transform the measure of marketing success. At Ovative, we help brands move the needle. We are curious. We value your brand. We want to see you succeed. Connect with us to learn more!
SOURCES: Death of the Cookie, Axios, AP News, admonsters