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FLOC is defunct. Google’s original initiative to address privacy concerns and close the gap between targeting and tracking caused by the end of the cookie was scrapped by the tech giant last month. Publishers now have to get to grips with its replacement “Topics API”.
This product assigns users with five interests per week based on web activity and there’s still lots to uncover as to the impact this will have on publishers’ revenue streams moving forwards. Ultimately, the move is likely positive for consumers and publishers but may leave some ad tech businesses struggling.
The reliance on cookies came from the promise of being able to deliver relevant advertising to consumers, driving up engagement and ultimately helping brands sell their products or services. But is our reliance on the cookie justified? We’ve built an industry around being able to follow consumers around the web, but this has led to a creepy over-targeted advertising environment that has created a negative experience for many consumers. In fact, for the sake of consumers, this decision is overdue.
Google remains at the centre of the ecosystem but things will change
Apple announced a few years ago that it was blocking third-party cookies through Safari, the primary browser used on mobile devices, which ultimately plunged over 50% of consumers into a black hole for advertisers.
Google’s announcement to remove tracking on Chrome is actually seen as the bigger threat – but in fact, it’s a unique opportunity for publishers to take back control from the tech platforms and increase their share of the ad dollar.
Google still holds the monopoly on search data and the new system will still allow it to utilize such data for advertisers. Therefore, predicting that the relationship with Google as a partner for brands, agencies or publishers is about to wither is premature. Ultimately, the change will have little to no impact on Google’s bottom line, as the business is not going to create something that’s not in its best interest in the long term. Publishers remain extremely reliant on the ecosystem and this won’t change.
Taking back control
Publishers will still be able to deploy first-party data, and users are able to give publishers their personal information on their own terms via logins. This will become more important than ever, and there is the opportunity to create a closer relationship with users outside the Google ecosystem. By looking at options that don’t rely on external third-party data sources, publishers can create a contextual advertising environment that still allows them to deliver an engaging experience without reliance on cookies.
By doing this, users are more likely to be served ads that are relevant to both their interests and the advertising environment, without the need to use retargeting. Dealing with advertisers directly also minimizes the number of companies taking a cut of the ad spend and therefore maximizes revenue for publishers who are displaying the ad.
The changing ad tech space
There are too many ad tech companies that have relied on the complex ecosystem to generate revenue. The industry grew quickly and with that came the dozens of ad tech businesses ready to make the process more efficient.
We have ended up in a place where such a small percentage of ad spend is reaching the publisher, and this comes down to the expectations of brands, agencies and publishers who have been looking for the most effective and safe way to sell and display ads.
Removing third-party cookies from the equation also removes the need for a number of these ad tech businesses and this will change the ad tech ecosystem as we know it. The choice for all is either to pivot to offering a different solution or risk extinction over the next few years.
It’s unlikely that publishers and brands will mourn the loss of many of these businesses – many of which have benefited from being a “black box.” Hopefully, we will end up with a more transparent and trustworthy ecosystem that benefits publishers, advertisers and most importantly, the consumer.
What’s Next?
Google’s recent announcement will come under further scrutiny in the coming months but it will take a few years for the implications to play out fully in the marketplace. This doesn’t mean it’s too early to start planning and adjusting your strategy accordingly.
What is clear is that publishers will still need Google’s help but there is a huge opportunity to put the consumer back at the center of the advertising experience and by doing so brands can win their trust, loyalty and spend.
Paul Thompson
UK Country Manager, Seedtag
Seedtag is the leading Contextual Advertising Company that creates highly impactful and engaging solutions for relevant premium visual content, powering targeting and returns for top publishers and brands. The company’s contextual A.I. allows brands to engage with consumers within their universe of interest on a cookie-free basis.
Seedtag was founded in Madrid in 2014 by two ex-Googlers who wanted to get the most out of editorial images. It is a global company with more than 250 employees and an important international presence in Spain, France, Italy, UK, Benelux, Germany, Mexico, Brazil and Colombia.
