In our previous update on the AdTech market we explored whether changes in the legal landscape around cookies and similar technologies would actually have a positive impact. The initial signs were good, with stricter GDPR-standard rules around consent and transparency encouraging a move away from intrusive targeted ads, and towards other, more ethical techniques. Such techniques include contextual advertising, which pushes ads which are a contextual match to the webpage on which they're being served, rather than tracking user behaviour.
In a move which seems to support this trend, Google have indicated an intention to shift away from the use of third-party cookies. Third-party cookies are those planted on user machines by AdTech providers (not Google itself) which track behaviour at an individual level. The move is being hailed as a potential game changer for the world of online advertising. However, is it too good to be true?
Well, probably… Google's shift away from third-party cookies will in fact mark a greater focus on a new approach which will see users placed into groupings (or 'cohorts') based on their browsing habits, which will then influence the ads served to those individuals. The technology, known as "Federated Learning of Cohorts" (or "FLOC" – we're unsure if the pun was intended…) puts Google in the driving seat, with its algorithm influencing far more of the online advertising landscape. This is likely to put a squeeze on smaller players in the market.
It's questionable whether this new approach is going to result in greater privacy for internet users. It's fairly obvious that, whether you're being tracked individually by third-party cookies, or being tracked as part of a cohort, you are still being tracked!
There are also various other forms of tracking and device-fingerprinting technologies used across the internet beyond just third-party cookies. However, what is clear is that AdTech is an area which continues to evolve as the technology being employed becomes more sophisticated. As ever, it’s likely that these advancements will quickly outstrip the legal framework (GDPR, PECR, and others – which are fast becoming outdated!), so it will be fascinating to see how things develop.
If you have any specific queries or wish to discuss anything covered in this update, please contact Alistair Cooper or your usual DACB contact.
