FLoC, we hardly knew ye.

Google had a change of heart this week for its third-party cookies alternative plans after a year of growing negative industry feedback. It replaced its open-source Privacy Sandbox, known as “Federated Learning of Cohorts,” or FLoC, with Topics, which it calls “a new Privacy Sandbox proposal for interest-based advertising.”  Wait, what?

No FLoC, and now we get Topics? How should marketers and advertisers adapt to this latest news that affects targeting prospects and customers? “In short, they are trying to address the significant pushback and concerns that the industry has provided,” said Yahoo Chief Business Officer Iván Markman.

“It is yet to be seen whether this next iteration is workable, given how high level and short-time-spanned it is. Google’s FLoC received negative policy and industry feedback, and there was concern that FLoC IDs could have been exploited for cross-site user tracking. With the release of Topics API, Google is providing a higher level of user obfuscation and localized browser storage vs. a centralized storage location.”

The first thing is to understand? What exactly Topics is – and what FLoC was.

FLoC Was in a 2021 Trial. What Happened?

Google’s FloC was built on anonymized group-targeting principles vs. individuals. Google called these groups “Federated Learning of Cohorts,” or FLoC, where brands would not be able to determine who they are targeting specifically, but would still get to curate relevant advertisements based on the interests of each FLoC. It was rolled out in 2021 in a developer origin trial in Chrome.

It was received with mixed reviews. Some were positive.Rebecca Rosborough, CMO at MiQ, told us last year that Google was taking privacy very seriously. By rejecting authenticated data/unified IDs within its own advertising products, Google was drawing a clear line in the sand and saying, “We don't want user ID level targeting.”

Many have pushed back on the Google's FloC.Movement For An Open Web (MOW), originally called Marketers For An Open Web, a coalition of marketers and publishers who support an “Open Web,” last year teamed up with U.S. Save Journalism Project and in a joint statement said Google “already possesses more data on more people than any other organization on the planet. In reality it is only stopping the use of third-party cookies to enhance its own commercial interests.”

Related Article: As Google FLoC Trial Rolls Out, What's a Marketer's Next Move?

Google’s Mea Culpa with FLoC

So why the departure from FLoC from Google’s vantage point? In its technical explainer, it listed some reasons that FLoC needed to go:

  • FLoC added too much fingerprinting data to the ecosystem
  • Stakeholders wanted the API to provide more user transparency
  • Stakeholders wanted the API to provide more user controls
  • FLoC cohorts might be sensitive
  • FLoC shouldn’t automatically include browsing activity from sites with ads on them (as FLoC did in its initial experiment)

“The Topics API’s mission is to take a step forward in user privacy, while still providing enough relevant information to advertisers that websites can continue to thrive, but without the need for invasive tracking enabled via existing tracking methods,” according to Google officials.

Topics, Google’s New Cookies Alternative

Here’s Google’s explanation of Topics, via a blog post from Vinay Goel, product director, Privacy Sandbox, Chrome:

Learning Opportunities

  • Browser personalization: Your browser determines a handful of topics that represent your top interests for that week based on your browsing history.
  • Three-week retention: Topics are kept for only three weeks, and old topics are deleted.
  • No external servers: Topics are selected entirely on your device without involving any external servers, including Google servers. When you visit a participating site, Topics picks just three topics, one topic from each of the past three weeks, to share with the site and its advertising partners.
  • Consumer control: Topics enables browsers to give you meaningful transparency and control over this data, and in Chrome, we’re building user controls that let you see the topics, remove any you don’t like or disable the feature completely.

More importantly, Goel said, "Topics are thoughtfully curated to exclude sensitive categories, such as gender or race. Because Topics is powered by the browser, it provides you with a more recognizable way to see and control how your data is shared, compared to tracking mechanisms like third-party cookies. And, by providing websites with your topics of interest, online businesses have an option that doesn’t involve covert tracking techniques, like browser fingerprinting, in order to continue serving relevant ads.”

Google offers a full technical explainer of how exactly the Topics API works.

Related Article: Could Google's Privacy Sandbox Commitments Be a Win for Marketers?

Feedback on Marketing and Advertising Impact

The current conversations around FLoC and Topics highlights one thing: third party (aka advertising) cookies are dead, according to Wayne Coburn, director of product at Iterable. “It is more important than ever for marketers to have and maintain quality first-party data,” Coburn said to CMSWire. “Consumers have to be able to trust the brands they interact with — from the ethics of the brand through to the way it handles personal information — and if a consumer doesn't trust a brand, they aren't going to let their data anywhere near it. That isn't going to change, so the way big tech handles data has to.” 

FLoC provided more granular insights for advertisers, while the Topics API offers greater obfuscation for users, according to Yahoo’s Markman. The Topics API may provide greater interest category transparency into the ad tech ecosystem, but does not deliver greater granularity of interest targeting, he added. “And while it eliminates the need for FLoC IDs, it creates a taxonomy lookup table that will still need to be managed by the third party in the future,” he said.

The evolution of FLoC to Topics API is indicative of the challenge the industry is facing on identity, Markman said, adding: “Respect consumer preferences and create a better value exchange, while mitigating and maintaining advertiser and publisher relevance and reach.”

Krystal Tang, senior manager of solutions at Uberall and a Google Business Profile Gold Product expert, said the move by Google is likely related to the company's broader initiative to phase out third-party cookies, finding new solutions that meet the needs of advertisers, while still protecting user privacy. “It will be interesting to see how this is adapted overtime,” she said. “Will broad topic categorization be enough to create personalized ads? Will Google be able to pinpoint localized topics to a broad site for example?"

Standby. There will surely be more to come...

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