Google’s Ad Changes: The King Just Built a Moat Around His Castle

The initial frenzy over Google’s news regarding its latest privacy updates has abated, and now it’s time to really think about what it means – for Google, for brands, and for the industry as a whole.

As governments have lit a fire under brands and consumers have become more data-conscious, the future of marketing and advertising is unfolding before us. Let’s take a dive into what it all really signifies.  

What it Means for Google

Google’s announcement that it will not create an alternative to the third-party cookie that serves users ads based on their individual online behavior is first and foremost good for Google.

It allows the company to tick off a few boxes, one being that of watchful legislation. Privacy legislation has become a hot topic for all companies, big and small. After consistently being dragged to court and lambasted by consumers, Google’s decision not to support alternate identifiers to track individuals across the web appeases legislators and would appear to placate privacy-conscious consumers. 

This mandate also enables Google to fire another salvo in the upcoming ad battles with Apple, Facebook, and Amazon. The three companies, which have had their own host of privacy-related battles, have also shared updated and privacy-forward directives over the last several months. But after Google’s latest news, attention will shift back toward the others.  

What it Means for Brands 

IAB recently reported that only 48% of brands feel that they are “very or somewhat” prepared for the loss of third-party cookies and identifiers. Agencies fared a little better at 64%. For brands, the advantage will be on the side of those who already have ample first-party data, as that is useful for selling more or new products to current clients. 

Google’s new tracking technology, Federated Learning of Cohorts (FloCs), will be supported by first-party data. FloC uses data aggregation techniques within the Chrome web browser alongside machine learning to optimize ad targeting without directly tracking users across the internet. A clever way of undermining the competition while ensuring Google’s own profitability. 

The challenge will be for new brands selling new products and services to new customers – where and how do they find those audiences, and how do they track them on their path to purchase? 

What it Means for the Advertising Industry 

Google’s announcement came as a shock to the advertising industry, mostly because very few saw it coming or as in the past had been notified in some way prior to the announcements. That said, there should be few in the industry who find it a total surprise. The push toward a more privacy-conscious net is not a new one. Agencies, brands, and publishers have known for some time that to remain in good standing with consumers amid new legislation, maintaining direct consumer relationships and first party data has been essential.

There are numerous new identity solutions being tested and deployed to engage consumers anonymously; however, there is a limited expectation that any one of them will be universal. Success for most companies is the investment of time and resources to build direct relationships with prospects and customers alike. A new performance equation for brands is the cost of building a first-party data set and the cost of engaging prospects, sometimes long before they are in market. Industries with long and considered sales cycles and large price points have a head start. More transaction products and goods in many cases have relied on realtors, e-commerce giants, and others to build that traffic. 

The past few years have been indicative of where the ad industry and digital identity is going, and Google is following suit while also ensuring its own future. Brands, publishers, and others dependent on Google’s, and other, marketing platforms need to invest in alternatives and realize that there are new challenges ahead.

Delivering relevancy and ROI for digital engagement and commerce means working much harder and taking direct ownership of their success and ability to deliver messages and content when, where, and how the consumer wants to hear from brands. 

Cass Baker, EVP, Head of Strategy and Digital at GainShare.