Google’s FLoC 2.0, Topics, Trade Effectiveness for Privacy Compliance

Google’s latest solution for audience targeting without third-party cookies might scale the regulatory hurdles that are coming. But in diluting targeting capabilities, it’s in danger of being less useful for marketers. In a deviation from bird-themed proposals, on Tuesday Google announced Topics, its latest version of federated learning of cohorts (FLoCs), based on feedback from the industry and U.K. watchdog the Competition and Markets Authority. With Topics, your browsing history for that week is based on a handful of—you guessed it—topics, like travel and transportation or fitness. When you visit a site, Topics picks just three, one topic from each of the past three weeks, to share with the site and its advertising partners. It's an altogether simpler concept. How Cookies Work and Why They’re Going Away FLoCs had their fair share of critics: as well as being convoluted, publishers were frustrated it allowed Chrome to collect too much personal information on users. Privacy advocates were concerned people could be reidentified and it stumbled to meet General Data Protection Regulations. Now, being privacy compliant and effective will be Google’s next challenge. “We’re at the stage of testing effectiveness for advertisers,” said Ben Galbraith, Chrome product director, adding there needs to be a trade-off in finding a sweet spot that delivers “meaningful improvement for user privacy while giving a signal.” Rather, Topics is one of a “combination of signals that will let advertisers decide what [ad] is most relevant [to serve].” As part of its commitments to the CMA, Google said it would appoint an independent Monitoring Trustee for the Privacy Sandbox proposals. It has yet to appoint one. Here’s what we know: So, what’s different about Topics? A lot and also not a lot. Interest-based targeting, based on thousands of topic criteria, is simpler to understand than the string of numbers that denote FLoC IDs and the machine learning mechanism behind them. But, with Topics, it’s still the browser (Google's Chrome) monitoring the sites visited by a user on a continuous basis in order to decide which topics should be attributed to the browser of that user—and renewed every three weeks. It’s the same contextual targeting capability from around 2005. It’s not very sophisticated.Mike Woosley, Lotame With FLoCs, “we were concerned that someone could be reidentified by tying all those attributes together,” said Sara Stevens, vice president of digital capabilities at Publicis-owned Epsilon. “The new solution appears to be using contextual as the key data signal so you can’t grow and collect a larger profile. It’s the same data but putting a different recipe on it.” The main difference is the level of granularity in classification. Google has started with 300 topics based on the IAB content taxonomies v2 and Google’s own. It plans to add more but anticipates keeping in the hundreds to low thousands. “In the prior version, we also saw some signals that helped to provide some level of socio-demo predictability,” said Jürgen Galler, CEO of 1PlusX. “This seems to be totally gone now.” Google would tell you that someone was in a FLoC, like a sports lover or cook, but not what the features were that grouped that person with other people. “What they were giving the world is something that only a data scientist could make sense of … a lot of people said what the hell can I do with this?” said Mike Woosley, COO at data solutions company Lotame. “Topics is a dumbed-down version of a FLoCs that people are actually able to understand,” he added. “It’s the same contextual targeting capability from around 2005. It’s not very sophisticated.” Will this have any impact on Google’s timeline? Google’s countdown clock still has the third quarter of 2023 in mind for ending support for third-party cookies in Chrome. But by the fourth quarter this year, it still plans to enter the first stage of the transition period, where Topics will be available for adoption. It has no plans to move this yet, according to Galbraith. Since the concept and process seem much simpler, it will make Topics easier for the industry to test and keep to its timeline. Publicis’ Stevens noted that advertisers are prepped. Will this work for advertisers? Its effectiveness depends on the level of granularity of the interest targeting taxonomy. Sources believe this simpler version, reducing interest to three categories and giving them a three-week time window, obfuscates the customer journey and will lead to disappointment for those used to precise, tailored audience targeting. After all, searching for the Super Bowl doesn’t mean someone is interested in football. With FLoCs, Google claimed it could provide third-party cookie-like performance when it came to targeting. “Contextual data, while valuable, might not drive the personalization or precision that a marketer would want,” Stevens added. “It also rotates [referring to the three-week period] so that could disrupt that longitudinal relationship a marketer would want to have with a consumer.” Google Ads Rolls Out Performance Max Globally Topics are more static but less useful snapshots, while FLoCs could evolve with more data. That means the information would be "directionally accurate but not correct per se,” said Aaron Levy, head of paid search at performance marketing agency Tinuiti. “We’ll have to be a little bit more liberal with customization; one to two or one to one will be harder to get right.” What about privacy compliance? Topics avoid the issues that FLoCs had, mostly around fingerprinting and targeting people in sensitive data areas. The browser history stays on the device rather than external servers and people can remove themselves from individual topics that might be sensitive. That said, Topics’ opt-out mechanism could set a precedent for people across the rest of the web. We've seen that Google uses privacy as a competitive tool to position itself as the only organization accessing users’ data via the browser.Angela Mills-Wade, European Publishers Council “If I don’t want any ads about hot dogs, am I still going to get hot dogs ads?" said CEO of 33Across Eric Wheeler. "Whether first-party or logged in, the big superpowers of online advertising will still have the ability to [serve] hot dog ads." Despite Google’s outward open-source and collaborative approach through W3C and the CMA's oversight, people are still nervous. "We’ve seen all too often that Google uses privacy as a competitive tool to position itself as the only organization accessing users’ data via the browser," said executive director of the European Publishers Council, Angela Mills-Wade, "shaping the data to its own design, and using it to continue rigging the advertising ecosystem." She added that all proposals must have regular independent third-party audits. Does anyone else stand to gain? Publishers who spent time on building out high accuracy of contextual and socio-demo targeting using their first-party data, like BuzzFeed and Vox Media, could see their capabilities and targeting offerings rise in demand going forward. The problem here is that time-poor agencies need to work across multiple publisher partners. Either way, Topics will likely define how advertising works on the open web. “From my conversations, marketers do not want to put all their eggs in one basket,” Stevens said. “Marketers appreciate the open internet. It will continue to be that way. Different platforms offer different value points,” she said, adding that even though there might be issues with this tool, advertisers are still going to use it because of Google’s reach. Adweek Special Report: The Death of Cookies