Google’s FLoCs: “Advertisers and Publishers Are Right to Be Wary”

Google’s FLoCs, or federated learning of cohorts, is a new ad targeting method that the company is testing as part of its Privacy Sandbox.

The goal is to boost privacy in ad tech by grouping thousands of users into interest-based cohorts instead of targeting them based on individual behavior.

But Patrick O’Leary, founder and CEO of boostr, a CRM and OMS platform for media companies, says “Advertisers and publishers are right to be wary.”

Here are some of the reasons Google’s FLoCs might cause concern.

Will FLoCs actually improve on privacy?

On the surface, targeting users based on groups instead of their own personal advertising behavior would appear to increase data privacy.

“It appears there’s nothing identifiable or traceable back to an individual person,” O’Leary said. “Instead, people will be placed in various cohorts and their individual user information like a cookie will no longer be floating around the internet.”

But whether this promise actually comes to fruition is far from clear. And if we pay attention to Google’s overall track record and business model, there’s plenty of cause to be skeptical that Google will be the pioneer of a privacy-first Web.

More power for Google?

Google built the architecture of the modern Internet experience via its dominance in search. The company also controls the plurality of digital ad spend. Publishers who also depend on digital ad spend — and ad tech infrastructure like cookies — are concerned FLoCs will hand Google another opportunity to control the next iteration of the digital ad market.

“Distrust of Google is at an all-time high in the industry,” O’Leary said. “The skeptics are probably wondering how Google will use FLoCs to stack the deck in their advantage for their digital marketplace offerings.”

In addition, marketers have little insight as of yet into how effective FLoCs actually are. Google recently claimed they’re 95% as effective as cookies. Advertisers and publishers would like to see the receipts.

“Given the scant amount of detail on how FLoCs work and their efficacy, there’s going to be skepticism until independent third parties start publishing their findings,” O’Leary said.

Concerns beyond Google’s FLoCs

FLoCs are just one of many proposals Google is considering to chart the trajectory of a more privacy-attentive digital ad ecosystem. Advertisers and publishers are concerned that cookie deprecation could advantage the walled gardens and leave smaller players putting together the pieces of a fragmented industry.

“The beauty of the cookie was one standard,” O’Leary said. “If this fragments into many solutions, some within walled gardens, [that] will add cost, complexity, and less transparency to an industry rife with frustration.”

In the meantime, apprehension reigns, and publishers hope that a unified and effective targeting solution emerges.

“I imagine every publisher is asking how this will impact their CPMs and margins — those are unanswered, important questions,” O’Leary added.

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Joe Zappa is the Managing Editor of Street Fight. He has spearheaded the newsroom's editorial operations since 2018 and compiled the daily newsletter since 2016. Joe is a journalist who has written widely about technology, business, and politics. You can contact him at jzappa@streetfightmag.com.