Google, User Privacy, and the Evolution of Digital Advertising
On November 3rd, 2021, Steve Swan, product manager at Google, announced that the search engine would be offering a new functionality that allows publishers to share private first-party identifiers with Google’s programmatic demand. This announcement comes at a time of uncertainty for many digital advertisers: with initiatives like Federated Learning of Cohorts (FLoC) having potential for introduction into the market after the death of the third-party cookie, many publishers are understandably uneasy about how their daily practices and ability to generate revenue will be impacted. The new functionality highlights Google’s position on first-party data: namely, that it will play a large part in the future of digital advertising. By allowing publishers to use personally-provided identifiers in a greater number of transaction types, Google hopes to increase revenue for their partners in browsers where third-party cookies are partially or wholly phased out. In the same announcement, Swan emphasizes Google’s continued backing of publishers’ investments in first-party data, calling it a “privacy-forward way that publishers can increase the value of their programmatic inventory now and in the future”.
Targeted advertising in the search market represents a concept of great relevance to the course. The creation of markets out of the behavior of billions of people on the web is a fascinating amalgamation of ideas that we’ve studied throughout the year — the auctions created between Google and its partners, the matching market created between publishers and advertisers — and the combination of these ideas with emerging notions of safeguarding user privacy is an evolving topic that should garner the attention of any student in Networks. The easing out of third-party cookies will permanently change the landscape of targeted advertising, and mitigating the financial harm of accomplishing this is undoubtedly one of Google’s top priorities: according to a 2019 study by the company, news sites are set to lose 62% of ad revenue if a suitable replacement for the third-party cookie is not found. The loss of effective audience targeting would not occur merely at Google’s expense, however: many sites rely on targeted ads to maintain their ability to offer free access. Therefore, it is imperative that any person with an investment in the free internet should brief themselves on the ongoing development of FLoC and initiatives like it.
Source: https://blog.google/products/admanager/new-ways-publishers-activate-first-party-data/