What's FLoC? And Other Data Privacy Updates

It’s Data Privacy Day! We often talk about what’s next for data privacy regulations and how marketers can (and will) adapt. It seems fitting that we have an update to share about Google’s progress toward creating new ways to target users without using third-party cookies. Take a look.

Last January, Google Chrome announced its plan to phase out third-party cookies within two years. While it was good news for users and all who value privacy, marketers also knew the far-reaching implications the change would have on our strategies and processes. However, when Google shared the information, it also introduced a Privacy Sandbox for Chrome to allow for testing and to explore new ways to glean insights without the use of third-party cookies. 

On Monday, Google shared more about its progress toward eliminating third-party cookies and about its proposed privacy-safe solutions that can help marketers adapt to the upcoming changes. The Privacy Sandbox released last year has helped the company explore technology for interest-based advertising. This Federated Learning of Cohorts (FLoC). proposes a way for marketers to cluster groups of people with similar interests and target them with relevant content. The users aren’t personally identifiable because of on-device processing that keeps their web history private, but they’re still targetable based on their interests. A win-win so far. 

A New Way to Target Users

Wondering how it works? Basically, Chrome has all the signals. As users browse, it will begin to cull them into groups or cohorts and then you can deliver ads based on the groups. You won’t know who each user in the cohort is, but, if the technology is as effective as the current studies show, it’s a viable alternative to cookie-based advertising. 

Google is reporting that when using the FLoC method to reach in-market and affinity audiences, advertisers can expect to see at least 95% of the conversions per dollar spent compared to cookie-based advertising. Google will make FLoC-based cohorts available for public testing with its next release in March and will likely begin advertiser-facing tests for Google Ads customers in Q2. It will also continue to work on measurement solutions, including a Conversion Measurement API, and will explore more ways to prevent ad fraud. 

Google is also digging into new avenues for audience creation with proposals like FLEDGE, which expands on TURTLEDOVE, the previous Chrome proposal. FLEDGE takes into account the need for a trusted, compliant server that can store a campaign's bid and budget information. Google plans to make FLEDGE available for testing later this year.

What This Means for You, Today

We’re excited that Google is working on solutions like FLoC and FLEDGE to help marketers face the new privacy-first future. As this is the first of many potential initiatives from Google (and others) addressing the loss of third-party cookies, we encourage our clients to hang tight and continue to keep an eye on proposed solutions.

If you’re interested in helping to shape these Google proposals or would like the opportunity to test them out, you can complete this Google form to get started. (Heads-up that they're quite technical!)

No matter if you’re a wait-and-see type or if you’re ready to dig in, we encourage you to reflect on what it means to adopt a privacy-first mindset within your organization. If you haven’t already, consider documenting what data you’re collecting about your users and how you share it. You’ll likely need to restructure certain data and metrics operations and rethink existing processes to ensure you’re fully prepared for the loss of third-party cookies. If you have other questions about shifting your organizational mindset, take a look at our privacy Q&A.

Also, consider investing in first-party data. You’ll want to ensure you have accurate, secure data in a scalable data warehouse where you can make the most of it. If you’re interested in learning more, check out our ebook, “Take Your First-Party Data Further with Google Cloud for Marketing.”

While we love the idea of Data Privacy Day, Adswerve doesn’t just honor data privacy once a year. We’ll continue to keep you posted on all the latest privacy-related updates as they happen. In the meantime, we’d love to hear how your organization is preparing for the upcoming changes. And if your team needs, help, we’re here and ready to assist you. Just contact us and we’ll jump right in.