Privacy and advertising: do they need to be at odds with each other?

Google is a vital voice in a privacy-first future without third-party cookies – so StopPress chatted to Jessica Martin, APAC Privacy Lead for Google about the new measures, why the changes, and how privacy preserving APIs will still deliver results for advertisers and publishers

Google recently published the blog post “Charting a course towards a more privacy-first web”. Can you speak more to this?

We know that digital advertising is essential to keeping the web open and free. But at the same time, managing people’s expectations as to how digital advertising works – in particular privacy – has really changed. For example, 81 percent of consumers say that in the past year they’ve become concerned with how companies are using their data. Forty-eight percent of people have stopped buying or using a service from a company due to privacy concerns, and searches for online privacy have grown more than 50 percent year over year. So last year we announced our intention to phase out third party cookies and replace them with new privacy preserving mechanisms that also work for the ads community. Others in the industry are examining alternative trackers, based on POI, but we want to be clear that once third party cookies are phased out, we will not, and are not, going to work on ways to track individuals as they browse across the web or use user specific profiles based on an individual’s activity to track them. The crux of it means the data you share with Google will not be used to identify you and serve you ads outside of Google. From our side, it will inevitably have an impact on us and our products, as we also currently use third party cookies for ad serving and measurement in products, like Google Ads or Display & Video 360. But despite this impact, we believe it’s the right thing to do for people and the industry at large. So our products will be powered by privacy preserving APIs, which protect anonymity, but still deliver results for advertisers and publishers. One of these privacy preserving APIs is FLoC (Federated Learning of Cohorts) because it’s not on an individual level – so individuals are indistinguishable, which is really important.

What was really exciting was when we ran a Google Ads initial test, and we saw that at least 95 percent of the conversion per dollar spend compared to Cookie advertising was possible; that was fantastic. It is dependent on the strength of the clustering algorithm and the types of audience, but that’s a really promising result when you think about what you can do with privacy preserving APIs and the privacy element. It’s not our final and singular proposal to replace cookies, we’re just really encouraged by those tests. We intend to make these cohorts available for public testing through trials with this next release in March. We expect to begin FLoC testing for advertisers and Google Ads in Q2, and we’ll do a Chrome 90 release in April and in that we’re going to release the first controls where you can do a simple on/off, and then we intend to expand those controls for future releases. And that’s really important for us because that’s still going back to the user choice and control. So the Privacy Sandbox is a collaborative effort, and we’re really encouraged by the partnership to date in the industry including local players like Yahoo Japan to help develop these privacy preserving alternatives. 

The other thing to note is in this privacy first world, ensuring that advertisers are investing in and building first party data relationships with the audience is going to be really critical. Research commissioned by Google showed that brands in APAC that use first party data to create personalised experiences had an average of 11 percent more annual incremental revenue and 18 percent more cost efficiency, but also we see a longer lifetime value and there’s that customer trust component as well. So we will continue to respect first party data relationships and support them where they exist, that goes for us as well when we have a first party data relationship with users on our platforms. 

What are the new measures Google’s proposing once third party cookies are phased out?

Once they’re phased out we think the first party relationship is going to be really important, and we continue to recommend that to advertisers and publishers. We feel like automation, privacy preserving APIs and aggregated data is going to be fundamental. That’s where we see the most important elements. But we won’t continue to invest in tracking people around the web, that’s what will stop. Our focus will shift to what is coming out of the Sandbox, and supporting the strong first party data strategy approach. 

Why the changes?

We want long term stability for the ad ecosystem. We think you don’t have to sacrifice privacy in order to run effective ads, and we’re going to really work to collaborate with the ad industry. So we’re all in on the Privacy Sandbox technologies, we think they represent the future of how ads and measurement products will work, we’re more confident than ever that it’s the best path forward, we think it’s going to improve privacy for web users, but also while ensuring publishers can earn what they need and funding great content for advertisers. That’s the ecosystem element when you have the user, the publisher and the advertiser. 

When we announced last January that we were going to deprecate third party cookies over a two year period, we did not know what the answer was going to look like. We just wanted to say to everyone “look, we’re going to do this over a two year period, it’s going to be this open collaborative process, let’s all try and solve this.” We knew cookies were not fit for purpose going forward, so we were like “what could this look like?” Then basically a year to the day, Chrome published a blog on how things are going in Sandbox, and then with Google Ads we did some initial tests, and they were really promising. And we were like “okay this isn’t a choice between privacy and advertising, we can do both. We don’t need to try and recreate the past like some are proposing, we can actually build a different future and it can work for everyone.” That’s why we’re announcing our intention now, because we’ve had a lot of questions from industry and partners. We want to give people a lot of notice, we want them to participate in the conversation, but we do think building for the future is going to go, and that’s why the change.

Google has been working with the broader industry on the Privacy Sandbox to build innovations that protect anonymity. What has this involved?

The Sandbox itself is an open participation process. We also participate with the IAB, we have members on the board of the IAB and we’re involved in their discussions, and we’ve been working with PRAM (Partnership for Responsible Addressable Media) which is the other industry component looking at it, and even in the process of Sandbox we’ve done it within the outline of World Web Standards. So we’ve been very open with the industry. We’ve participated in the conversations that they’re looking at in terms of standards and norms, and we’ve been active members of it. Equally, we’ve shared what we’ve been working on, and made sure it’s a very open collaboration. And in Chrome, everything is open participation. But basically we will continue to have those conversations with the industry. Announcing our intention about where we won’t invest going forward doesn’t stop the industry conversation. We’re just saying what we think the best thing is from a privacy point of view for the industry.

Why is it important for people to access a broad range of ad supported content with confidence that their privacy and choices are respected?

Trust isn’t a sometimes thing. If users are losing trust in how their information is being collected and shared, and they don’t feel that they can look online safely, then that’s a real issue. If we’re seeing this concern with people about privacy and about how they interact with the web, then we need to ensure that it is really clear as to what that looks like, if people do have choice transparency and control. And that they can go online, find what they need, hopefully see personalised ads that are helpful, timely and expected, given it does need to be an ad supported ecosystem for all players but then if they chose not to have them, they equally have that choice as well. So they can turn on or off ad personalisation, or they can adapt it based on their interests, they can opt out when they want to. So it has to be choice transparency and control for each of the players in the ecosystem, and a mutually beneficial situation in the ecosystem. And that’s what makes it free, helpful and timely for users, and publishers get to get fair monetisation for their content, and advertisers do so in a way that respects the user but turns up at a helpful moment. That’s the ideal situation. So it’s critical that it does stay free in this way, but that we maintain user trust.

Google’s web products will be powered by privacy preserving APIs. How will this still deliver results for advertisers and publishers?

There’s no exact silver bullet. If an advertiser has a direct connection with the consumer, and it’s expected, we’ve seen that that’s where advertisers and publishers are getting great results. In addition to that, there are other tools that will be available that are respectful, and privacy forward. An example of that could be contextual; I’m not a great cook, and I was looking up birthday cakes for my daughter and I’m obviously very aware of my privacy settings. And I see on the right hand side an ad from a local supermarket to add lemon and ginger into my basket on my next shop, and that’s because I’m looking up a lemon and ginger cake. So it’s nothing to do with my personalisation or that I’m some cake fanatic, it’s absolutely contextual. And they’ve used machine learning to read the page. It doesn’t identify me afterwards, I don’t get any follow up notes, it’s just contextual but it was very helpful and very timely there and then. And I did click through, and it was useful advertising to me, but I also understood it. Another one in progress but we don’t have test results to share yet is consumer marketing. So between first party data strategies, automation, machine learning, aggregated information and privacy preserving APIs, we expect that we will see great results for advertisers and publishers while respecting user privacy. 

Will Google continue to support first party relationships on its ad platforms for partners, and what does that mean for them? 

Absolutely. We know the value of the first party data relationship, for the user as well as for the advertiser or publisher. So we will absolutely still continue. We will support it, and we will continue to invest in advanced data technologies related to first party as well. So all in on the first party data component, and continuing to invest there. 

What else will Google be doing once this all comes into effect?

Between now and then, a lot more is going to hopefully come from the Sandbox, and because we’re seeing increased participation, hopefully we are going to see more and more great news cases. We still have time, we’re just announcing where our intention is, and by the time it comes into effect I hope that we’ll have many more great stories to share.  

So privacy and advertising don’t need to be at odds with each other?

People don’t want their activity shared across the web, and particularly people that they have no direct relationship with. So the trust in industry factor is really important to us, which is really a big driver around change. Privacy’s been very front and centre at Google for years, but as an industry we can do future investment better. We don’t think privacy and advertising need to be at odds with each other, and even performance either. We think there is a way to do this that works for all in the ecosystem. We’re not going to track people across the web and we do see that those first party relationships are sacrosanct, so we will continue to support those. But all of this is because our commitment to the viability of the ads industry and in ad funded web is fundamental. This is what we need to do so we’re doing it because we want long term stability for the ad ecosystem, and to ensure that we have longevity.

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