The headline “Google discontinues individualized advertising” already works pretty well. Advertisers’ blood pressure might have risen briefly here, but we can all breathe a sigh of relief – Google is not changing its business model. Below you will find the most important facts in a nutshell.
Advertising via Google. – If Google were to stop offering advertising space, it would be tantamount to the end of the tech giant. The revenue generated by ad placement in the search environment in 2020 amounts to 31.9 billion US dollars. With an annual turnover of 47 billion US dollars, this corresponds to a share of around 68%. So we can anticipate this: Ad placement is and will remain an essential part of the business model.
Original process says goodbye. – Until now, Google used technology to track users as they surfed the web. This allowed advertisers to track their target groups via cookies and, on the basis of the tracked user profiles, to serve individual ads tailored to personal interests. Now the tech giant is reporting that it will no longer serve ads if individuals can be tracked. For advertisers, this alone would mean for now: Reduction of efficiency in campaign playout and significant reduction of booked reach. But Google has been working on a solution for some time and now it seems to be final.
Alternative process takes over. Consequences for advertisers? – The “Privacy Sandbox” bundle of measures already presented in 2019 is to be the basis of future ad serving. Federated Learning of Cohorts (FLoC) is part of the bundle of measures and will continue to enable advertisers to efficiently serve ads. FLoC is used to group large groups of people into clusters and to elaborate their group characteristics into commonalities. In testing, FLoC is already impressing with a match of 95% of conversions achieved based on traditional cookie tracking. Compared to brachial tracking, FLoC depends on individual parameters such as the quality of the cluster algorithm or the target group to be reached. According to a Google whitepaper, the number of profiles per cohort is 500.
No disadvantages for advertisers, advantages for users. – Advertisers can therefore continue to target ads to specific audiences and should not have to make any sacrifices in terms of their advertising effectiveness and efficiency. In addition, bots are less of a nuisance, because a trust token API makes it possible to determine without a doubt whether a flesh-and-blood user or a bot has clicked. At the same time, individuals disappear in the crowd and browser histories remain protected. Users should once again be able to surf the Internet in as open and accessible a manner as possible, while their privacy remains protected as far as possible. Sounds like a solution that everyone can benefit from.
Google will not really stop individual advertising, and not much will change for advertisers. The first FLoC-based version is scheduled to launch via Google Ads in the second quarter of 2021.