How Apple Will Grow Its Advertising Business

How Apple Will Grow Its Advertising Business

by Tim Colucci Apple

Apple changed the advertising industry when the company launched an important privacy control in 2021, Application Tracking Transparency (ATT).  ATT asks iPhone users to decide whether apps can track them across other applications and websites. After the introduction of ATT, 62 percent of iPhone users opted out.

This has created a problem for advertisers and ad tech platforms such as Meta that rely on the ability to track user behavior across the web in order to serve up targeted ads to them. Without tracking user behavior via third-party cookies, their ads are less personalized. Meta said that ATT would cost the firm $10 billion in revenue in 2022. Apple, for its part, justified the new privacy control as taking a stand for consumer privacy.

Well, we now know Apple had something else in mind with ATT: taking a stand for Apple’s advertising business.

As Bloomberg reported recently, Apple is now earning $4 billion in revenue annually by selling ads on its devices, and the company plans to grow that amount aggressively. Granted, $4 billion is a far cry from the $209 billion that Google pulled down from advertising in 2021, but Apple’s newfound focus on ads sure casts its consumer privacy push in a different light.

How Does Apple Earn Ad Revenue?

Apple makes money selling ads on spaces that people see all the time on their iPhones and connected TVs as they navigate their screens to download apps, read the news, and watch content. Those include:

  • The App Store, as shown here:

Apple Ads

  • Apple’s own News and Stocks apps.

The additional ad revenue will come from:

  • The Today tab (the home page of the home page of the App Store, which includes content ranging from App of the Day to Game of the Day).
  • The You Might Also Like section of the App Store (this is found at the bottom of the App Store).
  • Third-party app download pages.

Does ATT Apply to Apple?

How will Apple sell targeted ads? By collecting first-party data, meaning the information that users of Apple devices cough up to Apple whenever they use the App Store, News and Stock apps, and so on. And, by the way, Apple will not make it easy for users to opt out of having their data tracked. You can disable the ad personalization feature, but you have to look for it under Apple Advertising in the settings app’s Privacy & Security menu. There is no pop-up menu asking you if you’d like to have tracking disabled as is the case with ATT, as shown below:privacy noticeBut shouldn’t ATT also apply to Apple? Not in Apple’s view. According to Bloomberg:

You may ask then, why don’t Apple apps have to ask permission to track users via a pop-up message? That’s what happens with other apps under ATT.

The reason, Apple says, is that the system “does not follow you across apps and websites owned by other companies.” That’s what ATT is designed to prevent. If a third-party app doesn’t track across outside apps and websites, it also doesn’t need to show a pop-up.

The “we are exempt from our own policy” rationale is how Google justifies its plans to kill third-party cookies on the Chrome browser. Google apps such as YouTube are exempt because technically they collect first-party data, not third-party data.

It’s easy to connect the dots and see what’s going on here: by attacking third-party cookie tracking, Apple bolsters its own ad program, which relies on first-party data collection.

Apple’s ad business is far too small to threaten the lead enjoyed by Amazon, Google, and Meta. But Apple has the muscle and money to grow its business quickly. ATT was a declaration of war.

What Advertisers Should Do

  • Understand the big picture. There is no going back: tech firms such as Apple and Google are undercutting the value of third-party cookies. Accept the reality that as third-party cookies crumble and technology companies enact privacy controls, your ads will be less targeted than they were. This does not mean you should stop advertising online. Online advertising remains the most efficient and cost-effective way to reach your audience. At the same time, first-party data is more valuable than ever to advertisers as a means to creating targeted ads. Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms. Learn more about our services with Amazon Ads here and Walmart here. Apple and Google cannot undercut what these companies are doing.

True Interactive can help you navigate the ever changing world of consumer privacy and advertising.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Lead image source: https://pixabay.com/photos/apple-inc-mac-apple-store-store-508812/

 

 

 

Why Google Delayed Its Cookie-Killing Effort to 2024

Why Google Delayed Its Cookie-Killing Effort to 2024

by Tim Colucci Google

To no one’s surprise, Google announced that the company is postponing its plans to kill third-party cookies on Google Chrome. The deadline, originally scheduled for 2022, will now be late 2024. If this news seems familiar to you, you are not alone. In 2021, Google announced a delay to 2023, but now 2023 no longer is feasible.

Why?

The problem for Google comes down to the reality that the company raked in more than $209 billion in advertising revenue in 2021.

Google Ad Revenues

As a result, Google needs to proceed very carefully in its phasing out of third-party cookies, which advertisers use to serve up targeted ads to people by tracking their browsing habits across the web. The fact that Google announced the delay after it disclosed subpar quarterly earnings shows just how wary Google is of rocking the boat. To protect its advertising business, Google must:

  • Come up with an alternative to third-party cookies that will satisfy advertisers. If Google fails to do that, Google will lose business to competitors such as Amazon Ads. Amazon Ads deliver targeted ads based on their own data beyond the reach of Google’s privacy controls. And Amazon Ads isn’t the only one, as I blogged recently.
  • Mollify regulators. Because Google is the largest online ad platform in the world, Google must convince regulators that its consumer privacy changes won’t give Google an unfair advantage. As we blogged in 2021, U.K. regulators have already slowed down Google’s efforts. Regulators are concerned that the demise of third-party cookies could give Google too much power because Google can rely on first-party data on sites such as YouTube (which Google owns) to support its ad business.

Google’s approach to satisfy advertisers consists of the Privacy Sandbox, where Google experiments with alternatives to third-party cookies that enable targeting with stricter privacy controls in place. Those alternatives include:

  • Fledge, for remarketing new ads.
  • Attribution reports, for telling advertisers which ads work without compromising consumer privacy.

But it is taking some time for Google to devise solutions as noted above, and not without some considerable trial and effort. For the record, here is Google’s rationale for the delay this time:

The most consistent feedback we’ve received is the need for more time to evaluate and test the new Privacy Sandbox technologies before deprecating third-party cookies in Chrome. This feedback aligns with our commitment to the [U.K. Competition and Markets Authority] to ensure that the Privacy Sandbox provides effective, privacy-preserving technologies and the industry has sufficient time to adopt these new solutions. This deliberate approach to transitioning from third-party cookies ensures that the web can continue to thrive, without relying on cross-site tracking identifiers or covert techniques like fingerprinting.

That rationale underlines both the impact of regulators and the difficulty in developing an answer to third-party cookies.

This latest delay has annoyed advertisers who had been taking measures to adapt to a cookie-less world and now find themselves delaying their plans. Others simply do not like the uncertainty of living in an extended transitional period while Apple enacts privacy control measures of its own. We suggest that for now, advertisers:

  • Accept the reality that as third-party cookies crumble and technology companies enact privacy controls, your ads will be less targeted than they were – at least until the industry adapts to alternative tools being developed. This does not mean you should stop advertising online. Online advertising remains the most efficient and cost-effective way to reach your audience.
  • Try alternatives beyond Google’s Privacy Sandbox. These include alternative IDs, contextual targeting, and seller-defined audiences.
  • Work with your advertising agency to understand what’s happening and how you may be affected. That’s exactly what our clients are doing with True Interactive. That’s what we’re here for.
  • Don’t abandon ship with ads that rely on web tracking. As you can see with Google’s announcement, things may not proceed the way Google plans.
  • Do invest in ways to leverage your own (first-party) customer data to create personalized ads. We can help you do that.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms. Learn more about our services with Amazon Ads here and Walmart here.

One other important consideration: remember, Google is not the only company doing away with third-party cookie tracking. Apple did so with Safari in 2020, and Mozilla with Firefox. The writing is on the wall: it’s time to adapt to a world without third-party cookies. True Interactive can help you do that.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Lead image source: https://unsplash.com/@laurenedvalson

For Further Reading

Meta Misses the Mark; How Should Advertisers React?

Meta Misses the Mark; How Should Advertisers React?

by Beth Bauch Facebook Meta

Over the years, Facebook has been a Teflon brand. No matter how many controversies and setbacks the company has faced, it has seen its stock price and market capitalization soar. But all that changed on February 2 when Facebook’s parent company Meta announced earnings for the fourth quarter 2021. The company:

  • Missed its earnings estimates.
  • Reported that Facebook’s global daily active users declined from the previous quarter to 1.929 billion from 1.930 billion. Although Facebook has experienced drops in the United States before, this was the first time the world’s most popular social platform had experienced a decline in its user base.
  • Forecast weaker-than-expected revenue growth for the next quarter.
  • Said that the company would suffer a $10 billion revenue hit in 2022 because of the impact of Apple’s iPhone privacy controls launched in 2021.

Investors were stunned. The next day, Meta suffered a 26 percent drop in its stock price – the largest single-day drop in history. Not just for Meta. For any company.

Companies can have a bad quarter. But why did Meta suffer a historic drop in its stock price? There is no single, clear-cut answer. But a few factors no doubt played a role:

  • The drop in users, although not massive, stoked concerns that Facebook is finally beginning to feel the impact of its ongoing brand safety controversies and indifference from the growing Gen Z population. Losing members can be a red flag for advertisers, and Facebook needs advertising revenue to succeed.
  • Meta surprised investors by saying it still has not recovered from the impact of Apple’s consumer privacy controls. In 2021, Apple altered its operating system to require apps to get a person’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers. This move curtailed the ability for advertisers and ad platforms such as Facebook to target digital ads across the web. Ad platforms such as Snapchat and Twitter said that the restrictions were either not hurting them or that they had figured out satisfactory ways to keep creating effective ads despite the existence of the privacy controls. It was alarming to hear that Meta had not figured out a solution yet.
  • Meta’s big bet on the next generation of the internet, the metaverse, is costing the company – a lot. Meta said that the company spent $10 billion in 2021 on various products that form the building blocks of the metaverse. That spend hurt profits. And the metaverse is still many years away, which has made investors ask: just how much is the metaverse going to cost Meta?

Even still, Facebook achieved $33.67 billion in ad revenue for the quarter, which was better than expected. Should Facebook’s advertisers be concerned? As an agency that helps many businesses build their brands and convert customers through Facebook advertising, we believe that if you advertise on Facebook, you should:

  • Keep advertising on Facebook if you are satisfied with your results so far. Based on our client work, Facebook continues to drive conversions even though the cost per conversion has increased and conversion rates are lower. Facebook remains an efficient and cost-effective alternative to competing platforms.
  • Adapt to the new reality of Facebook advertising. One of the challenges with Facebook advertising under Apple’s privacy controls is having access to less user data for targeting various audience segments with ads. We’ve been working with Facebook to develop workarounds such grouping our clients’ target audiences together to give the Facebook algorithm more data to work with a (as opposed to breaking up audiences into separate groups). We’ve also removed audience exclusions from campaigns. After we aggregated audience data and removed exclusions, we gradually began to see an improvement in ad conversions following a drop resulting from the privacy controls.
  • Keep an eye on the decline in users. Understand where they’re going when they leave Facebook. In particular, Facebook said that TikTok has emerged as a much stronger competitor. TikTok is especially red hot with the Gen Z generation. In addition, monitor sentiment among your audiences, foremost your customers. In light of Facebook’s ongoing controversies over privacy and the publication of harmful content, are your customers expressing concern? Is your brand safety at risk? (This may or may not be the case. As we’ve blogged before, social media will always be a messy place to live, and many brand have learned to live alongside that reality.

Advertisers have more choices than ever – emerging apps such as TikTok, retailer ad platforms such as Amazon Advertising, to name a few. The well-established ad platforms such as Google continue to launch new products. As always, we urge advertisers to stay on top of the evolving market. At True Interactive, we advocate for our clients by understanding how the ad industry is changing so that we can maximize clients’ return on ad spend. Contact us to learn how we can help you.

Photo by Dima Solomin on Unsplash

Why Google’s Ad Revenues Are Rising

Why Google’s Ad Revenues Are Rising

by Mark Smith Google

A year ago, Google was feeling the pain of an economic downturn caused by the pandemic. My what a difference a year makes. On October 26, Google’s parent Alphabet reported that Google had beat earnings expectations across the board for the third quarter. Why is Google growing so well?

The News

Here are the financial highlights from Alphabet’s earnings announcement:

  • Google’s advertising revenue rose 43 percent to $53.13 billion, up from $37.1 billion the same time last year and slightly higher than the prior quarter. YouTube ads rose to $7.21 billion, up from $5.04 billion a year ago.
  • Retail was the largest contributor to year-over-year ad growth. Media and finance spending was also big.

Google, like its Big Tech rivals Amazon and Facebook, is benefitting from the surge in e-commerce that happened during the pandemic. With more consumers spending online, more businesses advertised online. The increase more than offset the slowdown Google suffered in 2020 when its travel and leisure clients scaled back advertising amid widespread travel restrictions. As we look closer at Google’s growth, we see two take-aways:

Privacy Is Google’s Ace in the Hole

Apple has enacted privacy controls that give users the choice of opting out of being tracked by apps on Apple iOS. As a result:

  • Google rival Facebook has experienced a slowdown in revenue in its most recent quarter as Facebook users opt out of having their behavior tracked, which hurts Facebook’s ability to serve up targeted ads for its customers.

Brian Wieser, GroupM’s global president of business intelligence, told The Wall Street Journal, “In the land of the blind, the one-eyed man is king. Whatever data they have [at Google] is better than what most others have.”

And Google’s data is going to look even better once Google successfully phases out third-party cookies on Chrome, which is the most popular browser in the world. Subject to regulatory oversight, Google will phase out cookies in 2023. This means that advertisers will no longer be able to rely on third-party cookies to track user behavior across the web in order to serve up personalized ads. Google will work with advertisers to create alternatives to third-party cookies through its Privacy Sandbox project.

Meanwhile, Google’s own powerful ad platforms, such as YouTube and Google Search, will be exempted from Google’s phasing out of cookies. That’s because those platforms use first-party data, or data collected from user behavior on those sites. They don’t rely on third-party cookies. When the dust settles, Google will emerge even stronger.

Google Is Making a Play for e-Commerce

We reported on our blog that Google is making some changes that will strengthen Google’s position as a challenger to Amazon’s e-commerce business. For instance, Google will make online searching and shopping more visually appealing by emulating the product display features you see on Amazon. For certain items such as apparel, Google will return search results with a page that resembles a visual store, not a list of links and text descriptions. Google will also soon introduce a new way to search visually, with the ability to ask questions about what you see. These changes will build on some moves Google has enacted already to become more influential in e-commerce. As The Wall Street Journal reported:

Much of the company’s growth has come from e-commerce advertisers eager to reach customers whose product searches begin online, as noted earlier. The company joined with Shopify Inc. this year to simplify search listings and ad purchases for 1.7 million merchants. The effort, which aimed to enliven its e-commerce segment, has helped turn retail ads into Google’s largest growth contributor.

Most product searches begin on Amazon, a scenario that is not likely to change soon. But Google still commands a large share of product-related searches. The explosive growth of e-ecommerce during the pandemic has suited the company well – and will continue to do so.

It’s clear that Google’s position among the Big Three online platforms (along with Amazon and Facebook) is as strong as ever. And Google is taking steps to write its own future through stronger consumer privacy measures.

As for what’s next? Look for Google to make more investments in artificial intelligence to fuel the development of more ad products. This commitment reflects a broader push into AI for Alphabet. As Alphabet CEO Sundar Pichai said in a call with investors, “In 2016, I laid out our vision to become an AI-first company. Five years later, this quarter’s results show how our investments in AI are building more helpful products for people and for our partners in local communities.”

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Why Google Delayed Its Plan to Scrap Cookies

Why Google Delayed Its Plan to Scrap Cookies

by Mark Smith Google

Not so fast, Google. The company has announced that its campaign to kill cookies on the Chrome browser is slowing down. This is an increasingly complicated story with a simple conclusion: no matter what Google does or does not do, ad personalization is alive and well.

What Google Announced about Blocking Third-Party Cookies

In a blog post, Google said that its plan to block web tracking on Chrome – originally planned to happen in 2022 – will be delayed until later in 2023. The company also indicated that its timeline is subject to its engagement with the United Kingdom’s Competition and Markets Authority (CMA). In other words, Google will need the cooperation of legislators who are growing very concerned about Google’s growing power. This is an important development. Previously, Google was rolling along unchecked with its anti-cookie measures despite an outcry from advertisers and ad tech firms — who are concerned that Google is amassing too much power and restricting their ability to deliver personalized ads by tracking users across the web.

A Brief Timeline of Google’s War against Third-Party Cookies

Google’s announcement is best understood in context of a series of moves that the company has made since January 2020. Let’s break it down for you:

January 14, 2020: The Bombshell

Google said it will phase out support for third-party cookies on Chrome, which is the most popular browser in the world. Advertisers rely on third-party cookies to track user behavior across the web in order to serve up personalized ads. Google said it wanted to make the web more private. Google said it would work with advertisers to create alternatives to third-party cookies through its Privacy Sandbox project.

The news created a wave of protest from advertisers and ad tech firms. They accused Google of stacking the deck against them by denying them the ability to use third-party cookies to personalized ads. Meanwhile, Google’s own powerful ad platforms, such as YouTube and Google Search, would be exempted from Google’s phasing out of cookies. That’s because those platforms use first-party data, or data collected from user behavior on those sites. They don’t rely on third-party cookies. Advertisers complained that Google was creating an unfair competitive advantage.

January 8, 2021: A Regulator Steps In

The United Kingdom’s Competition and Markets Authority (CMA) announced it was investigating Google’s Privacy Sandbox because the CMA was getting concerned that Google was potentially violating anti-trust laws. This was an important development leading up to Google’s June 24 announcement.

January 25, 2021: Will FLoC Float?

Google announced it was developed an open-source program that would ease the pain of businesses eventually losing access to third-party cookies. This open-source program is known as FLoC (Federated Learning of Cohorts). FLoC will make it possible for businesses to group people based on their common browsing behavior instead of using third-party cookies.

March 3, 2021: Google Doubles Down

Google doubled down on its campaign against cookies. Google said that once third-party cookies are phased out of Chrome browsers, Google will not build alternative identifiers to track individuals as they browse across the web, nor will Google use them in its products. Examples of those alternative identifiers include Unified ID and LiveRamp IdentityLink. Instead, Google pushed advertisers to adopt FLoCs developed out Google’s own Privacy Sandbox initiative (as noted above).

Notably, Google  also said, “We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers. And we’ll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with.”

March 11, 2021: Google Keeps Pushing First-Party Data

Google announced some product developments intended to make it easier for publishers to use their first-party data programmatically for ad buys. The announcement was seen as another sign of Google’s intention to bring about the demise of third-party cookies and push businesses toward using first-party data to personalize content.

June 11, 2021: Google Feels the Heat

Feeling the heat from the CMA investigation, Google made some public commitments to protect free competition, such as “no data advantage for Google advertising products” and that “We will play by the same rules as everybody else because we believe in competition on the merits. Our commitments make clear that, as the Privacy Sandbox proposals are developed and implemented, that work will not give preferential treatment or advantage to Google’s advertising products or to Google’s own sites.”  Google also pledged to cooperate with the CMA.

June 24, 2021: The Cookies Are Still Baking

As a byproduct of pledging to cooperate with the CMA, Google agreed to slow down its phasing out of third-party cookies. The CMA wants Google to proceed more cautiously and thoughtfully with the CMA’s oversight, especially amid the ongoing outcry from advertisers, ad tech firms, and competitors.

The New Timeline

Google shared a revised timeline. Here’s exactly how Google describes it:

“After this public development process, and subject to our engagement with the CMA, our plan for Chrome is to phase out support for third party cookies in two stages:

  • Stage 1 (Starting late-2022):Once testing is complete and APIs are launched in Chrome, we will announce the start of stage 1. During stage 1, publishers and the advertising industry will have time to migrate their services. We expect this stage to last for nine months, and we will monitor adoption and feedback carefully before moving to stage 2.
  • Stage 2 (Starting mid-2023):Chrome will phase out support for third-party cookies over a three month period finishing in late 2023.

Soon we will provide a more detailed schedule on privacysandbox.com, where it will be updated regularly to provide greater clarity and ensure that developers and publishers can plan their testing and migration schedules.”

What Does All This Mean?

  • The demise of third-party cookies is still happening – just not as quickly as Google originally planned.
  • Google now has oversight. The CMA could pull its support or impose more restrictions if it feels Google is not playing fair. And who knows what would happen to Google’s Privacy Sandbox if that were to happen?
  • Personalization is alive and well. As we noted on our blog, even if Google succeeds ultimately, businesses have access to alternatives to third-party cookies such as Unified ID 2.0 — is a next generation identity solution built on an open-source digital framework.
  • First-party data is more important than ever. That’s because Google isn’t the only Big Tech firm clamping down on web tracking. So is Apple with its Application Tracking Transparency privacy control, which requires apps to get the user’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers.

What Businesses Should Do

  • Heed Google’s advice and monitor the detailed schedule for its next moves on privacysandbox.com
  • Work with your advertising agency to understand what’s happening and how you may be affected. That’s exactly what our clients are doing with True Interactive. That’s what we’re here for.
  • Don’t abandon ship with ads that rely on web tracking. As you can see with Google’s June 24 announcement, things may not proceed the way Google plans.
  • Do invest in ways to leverage your own (first-party) customer data to create personalized ads. We can help you do that.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by Mitchell Luo on Unsplash

For Further Reading

“Apple Announces New Privacy Features,” Mark Smith.

“Why the Google Ad Juggernaut is Back,” Tim Colucci.

“Why Amazon and Facebook Are Catching up to Google,” Kurt Anagnostopoulos.

“Google Unlocks First-Party Data for Publishers,” Mark Smith.

“Google Rejects Alternatives to Cookie Tracking,” Mark Smith.

“Google Responds to Apple’s App Tracking Transparency,” Taylor Hart.

“The Facebook Spat with Apple,” Taylor Hart.

“Google to Stop Supporting Third-Party Cookies on Chrome,” Mark Smith.

Google Rejects Alternatives to Cookie Tracking: Advertiser Q&A

Google Rejects Alternatives to Cookie Tracking: Advertiser Q&A

by Mark Smith Google

Google recently made another major announcement in its quest to usher in a cookie-less world. Recall that in January 2020, Google said it was going to phase out third-party cookies on Chrome in a bid to protect consumer privacy more effectively. On March 3, Google published an update: Google will not build alternative tracking technologies (or use those being developed by other companies) for its own ad buying tools to replace third-party cookies. Let’s take a closer look at what Google announced.

What exactly did Google announce?

Google said that once third-party cookies are phased out of Chrome browsers, Google will not build alternative identifiers to track individuals as they browse across the web, nor will Google use them in its products. Examples of those alternative identifiers include Unified ID and LiveRamp IdentityLink.

Instead, Google wants advertisers to adopt cohort-based targeting, or grouping people based on their common browsing behavior as an alternative to third-party cookies. Specifically, Google is advocating for the adoption of FLoCs (federated learning cohorts) developed out Google’s own Privacy Sandbox initiative. According to Google,

. . . our latest tests of FLoC show one way to effectively take third-party cookies out of the advertising equation and instead hide individuals within large crowds of people with common interests. Chrome intends to make FLoC-based cohorts available for public testing through origin trials with its next release this month, and we expect to begin testing FLoC-based cohorts with advertisers in Google Ads in Q2. Chrome also will offer the first iteration of new user controls in April and will expand on these controls in future releases, as more proposals reach the origin trial stage, and they receive more feedback from end users and the industry.

How will online advertising be affected?

It’s likely that advertisers will still be able to create targeted ads based on user behavior – but the ads will be based on larger cohorts of people based on their common browsing behavior as an alternative to third-party cookies. Google told The Wall Street Journal that ads using cohort-based targeting have performed nearly as well as the existing tools that target consumers individually.

But no one yet knows exactly how targeting will change. As Raja Rajamannar, chief marketing and communication officer at Mastercard, told The Wall Street Journal, “When you’re able to target precisely to individuals your effectiveness is very high. When you’re doing it to cohorts it’s bound to be lesser than the individual, but we don’t know how much less at this point in time.”

What should advertisers do?

We always recommend that when Google makes a major change to its products that advertisers keep a close watch on their spend and costs especially for any potential near-term fluctuations. (If you are a True Interactive client, we do that for you.) Beyond that, it’s time to wait and see. The worst action to take is to stop advertising on Google. Google remains the Number One digital advertising platform, even if targeting consumer behavior across Google’s universe changes from personal to cohort-based targeting.

Also:

  • Keep an eye on how the Google sandbox initiative evolves especially as Google begins testing FloC with advertisers in the second quarter.
  • Consider tapping into your own first-party data more effectively to create ads (and True Interactive can help you do so). As Google pointed out, “We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers. And we’ll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with.”
  • Google’s FloC may not be your only alternative, the March 3 announcement notwithstanding. Watch the development initiatives such as Unified ID 2.0, which is a next generation identity solution built on an open-source digital framework. Unified ID 2.0 is the result of a collaboration among publishers, buyers, and technology providers. According to a recent announcement, Unified ID 2.0 serves as an alternative to third-party cookies. Unified ID 2.0 aims to improve consumer transparency, privacy, and control, while preserving the value exchange of relevant advertising across channels and devices. Tom Kershaw, the chief technology officer of Magnite and chairman of Prebid.org — which is the operator of Unified ID 2.0 — dismissed the Google news. He told Campaign that Google’s March 3 announcement has zero effect on Unified ID 2.0. He also said that he was never under an impression that Google would participate in Unified ID 2.0. For more insight, read his newly published commentary on AdExchanger.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Image by Photo Mix from Pixabay