While Google announced a highly monumental change to its Chrome browser in early 2020, which over the course of next two years, will phase out support for third-party cookies. The hint on the crumbling of cookie has definitely raised a lot of arguments among advertisers and publishers, as it will impact heavily on online marketing.
The goal of phasing out third-party cookie is to make the web more private and secure for all users, as cookies track web users online, and used by advertisers to serve targeted ads based on what web users previously searched for on the web.
What is FLoC?
Google's proposal for interest-based cohorts, also known as FLoC (Federated Learning of Cohorts) will be made available for public developer testing starting in March. And recently, Google shared the latest results of its experiments with the FLoC API.
FLoC is created by using on-device machine learning to group Chrome users into cohorts that are based on browsing behavior, and by clustering large groups of people with similar interests, with individual users being theoretically, indistinguishable from other people in the cohort.
Google claims that its simulations demonstrate that cohorts have the capability to drive about 95% of the conversions per dollar spent compared to cookie-based advertising.
And if all goes according to plan, advertisers will start testing FLoC-based cohorts in Google Ads by Q2, 2021. With Chrome 90 release in April seeing the first controls for the Privacy Sandbox, which will be an initial on-off decision and further customisation coming later.
How Advertisers will be impacted by the replacement of third-party Cookie?
If third party cookies are wiped out in Chrome, in that programmatic ecosystem, it means online advertisers will be unable to personalize content or serve targeted ads for almost half of their audience.
Chrome browser is the most dominant of the lots, with statistics pointing to about two billion installation and one billion people using the browser each month, which means that any changes to the ecosystem will drastically affect the online advertising world.
Now, there are some skepticism in the advertising community about the viability of FLoC as a replacement for third-party cookies. But Google is convinced that FLoC and other proposals within the Privacy Sandbox represent the future of how ads and measurement products will work on the web.