Alphabet Inc, parent company of Google and several former Google subsidiaries, announced last week that it plans to stop using or investing in tracking technologies that uniquely identify web users as they browse the internet. Coming from the world’s biggest digital advertising company, this decision will change the digital advertising industry completely.
Google’s ad buying tools account for over half of all digital ad spending, which includes other systems such as YouTube and Facebook, in addition to Search. Google’s reign over the digital world means this may reshape the entire business landscape, where many companies rely on such tracking to target their ads and measure its effectiveness.
Google May Stop Selling Ads Based on Specific Web Browsing
This news comes in addition to Google’s announcement last year that it would remove its most widely used tracking technology, which is known as third-party cookies. Although, now the company is saying it will not transition its own ad buying tools to alternative tracking technologies, neither by building their own nor utilize those being developed by other entities.
Rather, Google says it will adopt new technologies to target ads without collecting information about individuals from multiple websites, known as a “privacy sandbox”. This technology will analyze users’ browsing habits on their devices, and subsequently allows advertisers to target aggregated groups with similar interests, also known as cohorts, rather than individuals. This will begin an open testing phase of ad buying in the second quarter.
This new change means that advertisers will no longer be able to gather as detailed of a picture of whom to serve ads to as well as whether a targeted user goes on to buy the advertised product. However, ad industry executives are saying this change will be good for consumers, and have expressed hope in the new technology’s ability to continue to help brands achieve their online marketing goals.
Privacy Concerns with Tracking Technologies
There has been some tension in the digital marketing space in regards to concerns between protecting user privacy and promoting competition. The digital advertising business has long relied heavily on individualized tracking, although this practice has come under increasing criticism scrutiny from privacy advocates and regulators. Digital advertising will need to evolve in order to preserve the future of the free web.
Google, like many other tech giants, collects a large amount of data directly from users of its services, like YouTube or Google Search, known as “first-party” data. This information, as well as the cohorts that will be calculated on users’ own devices, have worked nearly as well as one-to-one targeting, according to Google’s internal tests.
This new announcement only covers ad tools and unique identifiers for websites, but not mobile apps, which means that a substantial portion of the digital ad environment will not be affected. However, this plan is the latest in a series of user tracking developments shifting towards a more broad approach. Apple, for example, plans to limit app usage tracking by requiring developers to obtain opt-in permissions from users before collecting iPhone advertising identifiers.
Privacy-Friendly Technology Alternatives
Google’s announcement may further complicate efforts from the advertising industry to come up with more privacy-friendly technology alternatives for targeting individual consumers, such as the one being led by the Partnership for Responsible Addressable Media. This group of advertisers and advertising technology companies are planning to rely on new identifiers, such as strings of numbers and letters derived from users’ email addresses.
Google has yet to fill in many details of its plans, but Wizard Digital Marketing will be keeping a watchful eye for any new updates. We remain committed to preserving a vibrant and open ecosystem where our clients and their audiences can access a range of advertising support with confidence that their privacy and choices are respected.