“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Hugo Loirot, partner and managing director at fifty-five.
What do people remember about Einstein’s work? E=mc2. Thousands of pages of Descartes writings? Cogito, ergo sum. The Eagles’ thirty singles? Hotel California.
What can the industry know about Google’s Privacy Sandbox? Probably FLoC all.
Summarizing complex works with one formula, one title or one acronym is simpler, but not necessarily accurate. This might not be a problem when you are trying to remember old high school lessons, but can become problematic when the work is supposed to become the backbone of digital marketing in a year or two.
FLoC’s fame in the Sandbox
The Privacy Sandbox intends to establish a new framework to replace most use cases for third-party cookies. Each use case is covered by a specific initiative (and often, a new acronym), with a defined roadmap and addressing specific limitations. The list of these various initiatives is available and regularly updated on the Chromium website.
FLoC is one of seven projects the Google Chrome team is developing to build privacy-safe targeting and measurement. FLoC solves an important marketing problem by providing an alternative to third-party data for targeting ads to cohorts of users based on interest groups, but it does nothing else. If we think of the most common use cases for third-party cookies today, retargeting and view-through measurement are top of mind. However, neither retargeting nor view-through measurement can be accomplished by using FLoC. These challenges will be addressed by two other Google Privacy Sandbox initiatives: FLEDGE and Aggregated Reporting.
Google has recently announced a delay in trials for FLEDGE, noting they likely will not occur until the end of this year. With this timing in mind, FLEDGE serves an important role in the Privacy Sandbox.
So what’s in the Sandbox besides FLoC?
FLEDGE is one of several Privacy Sandbox solutions that can do far more than FLoC.
An evolution of Google’s initial TURTLEDOVE proposal, FLEDGE lays the foundation for creating brand-specific cohorts of users that can later be shown a specific ad – the very definition of retargeting.
While it is still unknown how exactly FLEDGE will work, it is safe to assume that it will require brand marketers to authorize a handful of demand-side partners (DSPs) to add users in custom interest groups based on navigational signals and volume thresholds. Sound familiar? The disruptive part of FLEDGE will likely lie in bidding and ad rendering, not the audience assignment itself.
In addition to FLEDGE, there are also aggregated reporting APIs in the Privacy Sandbox proposals. The objective is to replace third-party cookies for reach and frequency analysis as well as view-through measurement data currently collected by third-party cookies. So far, little has been shared on that front. While the Privacy Sandbox’s main focus has been on targeting, ad servers and DSPs have been busy working on modeling reach and frequency to predict what cannot be measured with 100% accuracy anymore.
The Event-level Conversion measurement API, another proposition in the Privacy Sandbox, solves for click-through attribution, by introducing noise and adding a 64 bits limitation to conversion signals. If you have been following the iOS 14 roller coaster over the past few months, this might sound familiar: The 64-bit limit also happens to be a part of Apple’s App Tracking Transparency Framework. This feature may prove vital to brands moving forward.
How the Privacy Sandbox can work for marketers
So how can these alternative solutions in the Privacy Sandbox benefit marketers?
Each has pros and cons.
FLEDGE adds privacy checks that remove micro segments. That’s healthy for the industry at large, even from a campaign performance standpoint. Limiting the number of DSP partners cannot hurt. However, whether the audience assignment will live exclusively in the browser and whether the logic will happen on the client-side or server-side is yet to be determined. Savvy marketers should start preparing for both possibilities now.
Additionally, the Aggregated Reporting and Conversion Measurement APIs bring their own benefits, including changing how multi-touch attribution (and even simple reach or conversion reporting) is performed. Focusing exclusively on FLoC without considering the Aggregated Reporting API and the event-level Conversion measurement API is the equivalent of running a branding campaign based on third-party data without tracking conversions or getting any reporting on reach and frequency and without tracking conversions.
Beyond the usual audience targeting, as well as reach, frequency, and conversion measurement, the Privacy Sandbox also offers solutions against fraud (Token API) and fingerprinting (Gnatcatcher). While these initiatives will require marketers to adapt, they are key to ensure a privacy-safe experience.
The future with the Privacy Sandbox
FLoC has been by far the most hyped initiative in the Privacy Sandbox. But the Privacy Sandbox is a complex project with several components, each warranting proper consideration.
As they face an uncertain future and a post-cookie world, marketers should ask themselves how they should prepare their strategies moving forward. Answering that question is like solving a math equation. They’ll need to read the problem in full, not the last line. They’ll need to look beyond FLoC and understand the Sandbox is its entirety.