Goodbye, Third-Party Cookies, Hello Google’s FloC

Advertisers and marketers have relied on third-party cookies for decades. Cookies allow marketers to track user activity at the individual level and identify repeat site visitors. They’re a key part of attributing value to paid advertising channels and to most personalization technology.

In August 2019, Google announced its plan to remove support for third-party cookies from Chrome by 2022. With 64% of all web users using Chrome, marketers need to find a new way to track user behavior. 

Why are third-party cookies on the way out?

A combination of ad blockers and privacy legislation has made it difficult for marketers to track user activity. In fact, 40% of web traffic comes from users who block third-party cookies. This makes it harder to attribute value to specific channels or to understand the impact of marketing campaigns.

The majority of web tracking involves third-party cookies. Cookies use tracking code from businesses like Facebook or Google and store a snippet of information about a user in their browser. When a user visits a website with tracking code, the code captures that data point and builds a cohesive picture of a user’s browsing behavior. This includes frequently visited websites, recent purchases, and general interests. This data informs which advertisements a user sees.

Apple, Firefox, and Google have recently started to block third-party cookies by default. 

What are the alternatives?

Google created FLoC (Federated Learning of Cohorts) as a new way to track user behavior. FLoC makes a browser profile for users, instead of using third-party trackers. 

A browser with FLoC enabled collects information about browsing habits and uses that information to assign a user to a group. FLoC places users with similar browsing habits in the same advertising focus group. Instead of using individual targeting, FLoC markets to groups, or “cohorts,” as Google calls them. 

Google created FLoC to avoid the privacy risks of third-party cookies. FLoC is meant to remove the need for any other third-party tracking software so that only Google is tracking data and keeping it secure. 

FLoC groups people by general information about their demographics or interests. Certain members of a demographic might be more likely to be in certain groups. This means that a group could overrepresent users of certain demographic groups. 

With the power to target users comes the power to discriminate. Marketers use ads to target specific users while excluding others. For example, one group could have users of one racial background, while another could have more users in one political group. This could lead to discriminatory and predatory advertising for these people. 

Google’s FLoC removes the need for third-party tracking software that isn’t owned by Google. Third-party tracking companies will now have to work in tandem with Google to access user information and pay to access it. This leads to a monopoly of information and is not good news for ad tracking competition that base their product on third-party cookies.

Besides Google’s FLoC, there are other ways to track user data without third-party cookies:

• First-party cookies: Here publishers and advertisers collect information separately. If both have the same piece of information about a user, they can match the customer with the data and market to them based on user activity. 
• Identity-based tracking: Advertisers see a unique ID for each user, and track every time a user logs into a site. Here advertisers are able to monitor individual browsing habits, and serve targeted ads based on user activity. 

Future proof your company from changing technology

Because third-party cookies are on the way out, your ad strategy needs to adapt. 

FLoC has its plus points. But it isn’t as privacy-focused as we would like, and can lead to discriminatory practices, as described above. Then there’s the concern of letting Google dominate yet another aspect of tech. Google also plans to charge any third-party tracking company for use of any of the data it has collected. 

There are competitive alternatives to FLoC, however, like leveraging first-party cookies or identity-focused advertising. Whatever you choose, make sure it works with your ad stack and continues to benefit your company’s marketing even as technology changes.