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Online advertising – Google tests alternative for third-party cookies

Google already announced in January 2020 that it would no longer use third-party cookies in two years at the latest. Instead, starting in March, a new technology will be tested in the Chrome browser that enables personalized advertising without cookies.

Although Google has turned to the W3C web standards organization to prevent suspicions of abuse of market power in developing the cookie successor, the UK’s antitrust regulator has already launched an investigation into Google’s plans.

Personalized advertising in focus

The focus of the development is not only the replacement of third-party cookies, but a combination of technologies that together should improve the playout of personalized advertising without completely violating the privacy of users.

The privacy measures bundled under the name “Privacy Sandbox” include Federated Learning Of Cohorts (FloC). Instead of storing cookies in the user’s local browser, as was previously the case, in order to use them to create personal profiles and play out personalized advertising, the new system shifts the user recognition of the advertising networks to the browser. The browser history is processed locally on the user’s computer. A profile is then created from the data, on the basis of which the user is assigned to a group with similar interests. Advertising networks should thus still be able to play out personalized advertising without having access to individual user identities.

Programmatic advertising with changes

Google has also proposed to the standardization organization W3C to adapt the Programmatic Advertising (real-time advertising auctions). For this purpose, the Turtledove concept was already presented in the summer of 2020, in which the auction runs partially in the user’s browser. Less user data would thus be transmitted to the advertising networks. Moreover, in the current version of Turtledove, so-called “trusted servers” would store part of the auction data.

An implementation of Turtledove would lead to publishers gaining greater influence over the bidding process. This would enable them to target advertising more effectively on the basis of their own data and content. To do this, Turtledove uses a two-pronged auction that gives the website operator the right of first refusal. Google calls this concept First Locally-Executed Decision over Groups experiment (Fledge). Turtledove is supplemented by other techniques that are intended to improve the success control of advertising and prevent advertising fraud.

Practical test with Google Chrome 89

Google manager Chetna Bindra writes test of the new technologies in a blog post that the new methods are “almost as effective as cookie-based approaches.” The release of Chomr 89 in March 2021 is expected to mark the first time the FloC concept will be tested with users in the real world. Fledge is expected to follow later in the year.

Competition regulators monitor launch

The UK’s Competition and Markets Authority (CMA) has already launched an official investigation in January 2021 due to the new technology.

Andrea Coscelli: “As the CMA has noted in a market study, how proposals in Google’s Privacy Sandbox will have a significant impact on publishers and the online advertising market.”

At this time, however, the antitrust authority has not made a ruling on whether the new proposals violate competition law. However, the authority stressed that it will not wait until Google has rolled out the technologies worldwide before making a judgment.

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Simon Lüthje

I am co-founder of this blog and am very interested in everything that has to do with technology, but I also like to play games. I was born in Hamburg, but now I live in Berlin.

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