March 5, 2021, 5:59 am | Read time: 4 minutes
On Wednesday, Google announced it plans to completely disable advertising cookies in the Chrome browser. TECHBOOK discusses the potential consequences for users and competitors.
Following the lead of Apple and Mozilla with Safari and Firefox, Google is now also bowing to privacy concerns. In a post on the Google blog, the company announced it intends to forgo all types of third-party advertising cookies, as TECHBOOK also reports.
What Are the Consequences of Google’s Disabling of Advertising Cookies for Users?
Google wants to make it clear with this decision that it takes privacy seriously. Until now, privacy and Google seemed to be two terms that were not compatible. However, the disabling of advertising cookies could change this for the better.
The advertising cookies used by Google and others are known as third-party cookies. These third-party cookies track browsing behavior across multiple websites. When you visit a particular site, it can set its cookie. Previously, this happened automatically. Due to pressure from privacy advocates, sites in the EU must now at least be transparent and ask for permission. If you agree, these cookies remain active even when you switch to another site. This allows advertisers to target ads tailored to personal usage behavior.
This does not affect so-called first-party cookies. These are set by websites themselves to track usage behavior on their own site, but not beyond.
Until now, all users received an individual advertising ID. This ID provided customized advertising based on data collected through advertising cookies. The elimination of advertising cookies means that individual tracking will no longer work.
Google Is Working on an Alternative to Individual Tracking
This does not mean, of course, that Google wants to completely abandon its core business of advertising. In the fourth quarter of 2020 alone, the company generated advertising revenue of more than 38 billion euros.
The alternative to cookie tracking is therefore a “democratic” approach. Google calls it “Federated Learning of Cohorts,” roughly translatable as “bundled exploration of cohorts.” FLoC is a privacy-centered approach that makes individual tracking unnecessary. Instead of a personal ID, internet users are assigned a cohort-based ID. This ID no longer evaluates individual behavior but views individuals as part of a group with shared interests and behaviors. According to current information, several thousand users will form each cohort.
Google claims that FLoC achieves 95 percent of the success rate of cookie-driven advertising. However, this result is considered controversial in the advertising industry. This is reported by the advertising company “AdExchanger.” It is unclear whether Google indicates this value as the maximum possible success rate or as an average. For advertisers who want to invest their money in successful conversions (such as how many users who are shown ads ultimately buy the product), this is a huge difference.
It is also assumed that Google uses data collected through cookies for FLoC testing. When Google disables advertising cookies, this data will no longer be available.
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FLoC Also Offers Vulnerabilities
Regarding the question of how well FLoC can actually protect individual data, we have not yet received an answer from Google. While individuals are better protected than before, the cohort ID still allows conclusions to be drawn about one’s own browsing behavior. If the ID is linked with other tracking methods, it may be possible to determine browsing behavior and specific visited websites.
An alternative tracking tool is Unified ID 2.0 (UID 2.0). This technology uses email addresses to track internet activities. It requires users to give their consent. The email addresses are then encrypted into IDs, making them anonymous and unreadable. These IDs can then be used similarly to cookies by advertisers. Google considers UID incompatible with the growing desire for more privacy on the internet. Apple has also already prohibited the sharing of email IDs for advertising tracking in iOS 14.
And What About Competing Advertising Companies?
Google is certainly not the only company that finances its revenue through advertising cookies. The elimination of third-party cookies therefore affects other, smaller competitors. The industry association of digital publishers and newspaper publishers (BDZV) speculates that Google is now exploiting its market power. With more than 66 percent market share (source: Statista), Google Chrome is the most widely used browser in the world. If the company succeeds in implementing FLoC successfully, it could further expand its position in the advertising market.