The future of the user-tracking landscape for advertising technology companies was supposed to be cleared up this year between more experience with Apple's App Tracking Transparency framework and preparations for Google's planned third-party cookie phaseout. The forecast for such coherence in 2022 hasn't come to fruition due in part to some privacy shifts on Google's part.
The company dealt the adtech community a couple curveballs in a matter of weeks at the beginning of 2022. First came the January announcement that Google was abandoning its cookie replacement, Federated Learning of Cohorts, and moving forward with a new alternative approach called "Topics," ahead of the 2023 cookie cutoff. That change set the stage for an early-February announcement with details on Google's plan to fully end cross-application tracking on Android devices by 2024.
Working to a company's advantage on both these fronts are grace periods and the ability to provide feedback — for better or worse — on everything Google is doing. The downsides continue to be uncertainty as to whether these moves will stick and which companies get lost in the shuffle.
"The problem is, there are going to be a lot of business left behind, and the lack of clarity means more regulatory risk and a high price tag for regulatory compliance, which is going to hurt many small and medium-sized businesses that don’t have the margins to account for the constant zigzag of developments," Kelley Drye & Warren Partner Alysa Hutnik, CIPP/US, said.
There were signs FLoC was hitting snags when Google announced in June 2021 that its plans for a 2022 cookie phaseout was being pushed out a year. The company noted it had "become clear that more time is needed across the ecosystem to get this right." What was missing at that point was what the exact hang-ups were with FLoC, a machine learning-powered concept that grouped users based on their common browsing behavior.
"We heard loud and clear from the market that (FLoC's approach) still made it possible to re-identify users and the system would be really difficult for users to understand in the first place," Google Senior Manager of Government Affairs and Public Policy Ari Levenfeld said, noting Topics is designed for the same ad-use cases as FLoC.
The actual concept for Topics follows closely with its name as users are assigned to topic categories via an algorithm built into a given device that reads the contents of a webpage. Users' site histories generate a weekly report of a handful of "top topics," which users can view, remove or opt out of. With Google's privacy measures and additional revolving "noise" attached, a user's browser shares a limited set of top topics with advertisers. Those topics can then be used to deliver ads.
Levenfeld made clear limitations around the number of topics being produced, proposed to be a few hundred overall for users to be filed under, would reduce user profiling and the possibility of bundling users into sensitive categories.
"The browser will be assigning categories to users, but there is no personal information being used beyond that that's being made available," Levenfeld said. "It's one of the challenges the Chrome team really wrestled with over the last year. The solution to address all that is to keep all the computation on a user's device so that nobody gets that information, including Google."
Another area of friction Google received feedback on was the presentation and accessibility of user controls. Levenfeld said concerns were raised that mechanisms weren't "fleshed out enough." With so much being made about clear user opt-out capabilities with cookie banners, especially in the EU, it was important for Google to up the ante with simplified mechanisms.
"They need to be intelligible in order to really matter to users," Levenfeld said. "The idea is to make it very clear to the user what is happening and make their choices immediately accessible."
A developer trial of Topics and its user controls will be rolled out in Chrome sometime this spring, according to Levenfeld.
Expecting the unexpected
Google's acknowledgement that a cookie alternative needed more thought and subsequent replacement wasn't solely a company decision. As Levenfeld alluded, perspective from industry players on the lack of workability FLoC presented was a driving force behind the shift to Topics.
"The digital advertising industry is at a critical juncture, and collaboration between stakeholders will result in the best outcomes for consumers and businesses," Network Advertising Initiative Vice President of Public Policy David LeDuc said. "Google’s announcement that it will shift from FLoC to Topics represents a continued effort to support a range of viable, consumer-first technologies to enable data-driven advertising."
From a preparation standpoint, its unclear how far down the road companies got with plans to adapt to a FLoC-based ecosystem. Some companies didn't wait for Google's solution and opted for their own cookie alternatives, some with privacy-preserving techniques and others that continue similar user-tracking tactics the industry has become accustomed to.
"I expect we will continue to see an evolution of options that will have ripple effects for everyone in the industry, which underscores the difficulty in planning a forward-leaning digital advertising strategy," Hutnik said. "Brands, publishers, and everyone in-between are all placing bets on what the future of digital advertising looks like and how it is shaped by privacy and competition law changes, as well as business innovations and disruptors."
Levenfeld said Google never considered dropping cookies without an alternative. That line of thinking was related to the potential proliferation of user-tracking approaches that may not meet the privacy standard Google envisions across the web. It's unclear to this point whether the non-Google solutions are the start of an ill-advised wave or simply a case-by-case fix until the next advertising space's next user-tracking conundrum.
"I think that companies of all sizes now should be evaluating the various arrows that exist in the expanding quiver of post-cookie ad practices," Greenberg Traurig Shareholder Darren Abernethy, CIPP/A, CIPP/C, CIPP/E, CIPP/G, CIPP/US, CIPM, CIPT, FIP, PLS, said. "Each company’s data, environments and goals are different, and so require a tailored legal approach. Right now there is no one-size-fits-all panacea, but innovation is happening."
Sandbox for Android: A prelude to Google's own ATT?
Potentially more impactful than the cookie deprecation is Google's move to apply Privacy Sandbox to Android devices. While the announcement seemed sudden, the conversation around cookies and some subtle transparency initiatives months prior ultimately laid the groundwork for Google to commence the Android shift.
The first bit of foreshadowing came in May 2021 when the Google Play store rolled out a safety section that divulged how app developers collect, use and store user data. The next shoe to drop was increased ad-tracking protections, a presumed response to Apple's ATT rollout.
"The Sandbox principles are the same on Android as they are on Chrome," Levenfeld said. "There are additional technologies that we'll need to build specific to Android that will limit companies' abilities to track users covertly and share information with third parties. Building that technology is going to really reduce the fingerprinting."
Levenfeld said it would've been easy to follow Apple's lead on curtailing cross-app tracking, but Google's approach contains important differences. Sandbox on Android will involve focuses on innovation and collaboration that Apple's ATT allegedly does not carry while the timeline for adoption seeks to support members of the ecosystem.
Digital Content Next CEO Jason Kint isn't so sure Google's meticulous approach will be an improvement over ATT.
"Apple’s ATT allows users a simple choice not to be tracked across different companies’ apps using a clear definition for tracking and a persistent opt-out which Google has fought for many years," Kint said. "Although Facebook did a good job trying to confuse everyone on this, Apple itself follows the same rules as all other apps. If you believe Google will also follow Apple’s lead and limit its own ability to track users across the app ecosystem despite having the dominant browser and operating system then I have an NFT in the Metaverse to sell you."
Google's commitment to collaboration on the Android initiative might be a double-edged sword. On one hand, engaging relevant stakeholders will help Google arrive at a path that will address all concerns and ensure Sandbox will include solutions for all adtech players. These consultations could also lead to a watered down product that meets companies where they are at rather than meeting halfway on a balance between user privacy and maintaining business models.
NAI President and CEO Leigh Freund lauded the concept of collaboration across a "rich and diverse digital marketplace.
"New technologies and approaches must embrace and enhance competition, not diminish it," Freund said in a public statement. "Consumers and the ad industry will benefit from solutions that address various platforms, rather than simply having siloed conversations about specific platforms or limiting the discussion to 'third-party' data. All companies who collect or process consumer data, regardless of their position in the marketplace, need to be responsible stewards of that data."
Hutnik is also a proponent of this collaborative approach, opining that it was inevitable and necessary given that any substantial change would need to consider a range of groups, including marketing, product, infosecurity and legal teams within an affected company.
"There is clearly a lot of investment and thought capital devoted right now to new ways to perform effective advertising and measurement that are more privacy and security conscious," Hutnik said. "Some options include less or no personal data, but even the options that do involve personal data are being considered in the context of much greater data security, data minimization, and steps to account for a clean supply chain."
Photo by Firmbee.com on Unsplash
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