Parakeet vs. Fledge in the Battle for Post-Cookie Ads

Google isn’t the only tech giant seeking to reimagine how advertisers find customers without violating user privacy. Last week, Microsoft published an updated proposal for its own privacy-focused framework for targeting and serving ads, called Parakeet, with additional privacy controls via Noisy Ranking. This is the second version of Parakeet, a product Microsoft first announced last year. Parakeet is an acronym for Private and Anonymized Requests for Ads that Keep Efficacy and Enhance Transparency. The main differentiator with Parakeet is that a trusted mediator stands between the user and the ad company, adding an additional layer of privacy. Microsoft published the proposal on the open-source developer platform GitHub, and plans to discuss it with the industry bodies W3C and IAB soon, according to Microsoft spokesperson Caitlin Roulston. The new framework comes as time is running out for the ad industry to find a replacement for third-party cookies, which Google plans to end support for in Chrome next year. Some progress is underway: Google launched origin trials for its cookie replacement, Privacy Sandbox, last month. However, a growing body of research is discovering that companies are still substantially dependent on third-party cookies. Parakeet trusted mediator vs. Fledge browser auction Parakeet is most related to another avian acronym, Google’s Fledge, the Privacy Sandbox proposal focused on retargeting. Whereas Fledge suggests protecting user privacy by conducting an ad auction all within the browser, and therefore preventing data leakage, Parakeet proposes the ad auction is handled by a trusted mediator, said Ratko Vidakovic, founder of ad-tech consultancy AdProfs. Parakeet would potentially take a fee for the service it provides, similarly to how ad-tech platforms extract fees from ad auctions, according to the first proposal. However, a business model is not set in stone and Microsoft is still exploring the specific economics, Roulston said. Google Begins Origin Testing for Topics and FLEDGE The idea behind Parakeet is that a trusted mediator can help prevent advertisers from de-anonymizing user data, which is not a privacy-compliant practice, said Kodi Foster, vp of commercial at The Washington Post. “Parakeet will be the adjudicator of what gets passed forward and what doesn’t,” he said. While the prior version of Parakeet tasked the trusted mediator to anonymize user data, adding another layer of privacy, the new version standardizes the ways by which data is anonymized. The new version also includes Noisy Ranking, which uses mathematical principles to slightly obfuscate user information, such as the geography the user is requesting content from or the publisher requesting an ad. Right now, the trusted server in Fledge is doing less work than the trusted mediator in Parakeet v2.Alex Cone, adviser, IAB Tech Lab “With Parakeet with Noisy Ranking, the trusted [mediator] is converting user data into a general representation that ad buyers can use for ad selection,” Roulston said. “This approach ensures no cross-site tracking of user data by ad tech but still helps ensure the most relevant ad is shown.” Google’s Fledge does include a trusted server feature seemingly analogous to Parakeet's trusted mediator. However, Fledge's trusted server serves more of a supplemental function, a way for sellers and buyers to access real-time data during an auction—such as if the ad creative complies with publisher policies or the remaining budget in a campaign—in a way that still satisfies privacy concerns, according to a Google blog post explaining Fledge. “Right now, the trusted server in Fledge is doing less work than the trusted mediator in Parakeet v2,” said Alex Cone, an adviser to IAB tech lab who is currently working on a new digital privacy venture. In Parakeet, the mediator powers the auction, whereas in Fledge, the browser does. Microsoft Edge on the peripheries Parakeet has won some fans in the ad-tech industry because it is much less disruptive to the way the current ad-tech ecosystem works compared with other privacy solutions, Cone said. However, Privacy Sandbox is more of a household name because Chrome is much more popular than Microsoft's Edge browser: Chrome holds 64.5% market share worldwide, compared to Edge’s 4%, as of March 2022, according to Statcounter. Also limiting the scope of Parakeet's proposal is that Edge is built on Google's tech, according to Vidakovic. “Microsoft's Edge browser is built using Google's Chromium engine. It's unclear how much freedom the company has to implement Parakeet into Edge," Vidakovic said. "But even if Microsoft could unilaterally implement Parakeet in Edge, it would not be enough to foist its paradigm on the whole industry given Edge's low market share.” He added that ideas from Parakeet could still influence other proposals. Yet, Foster points out that many in the industry are clinging to the cookie. “There’s a lot of unknowns around this stuff," he said. "Until the cookie is actually deprecated and gone, we’re going to continue this tiptoe of uncertainty."

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A second version of Parakeet is live, a counterpart to Google's Fledge

Catherine Perloff

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Catherine Perloff