Google Roils Digital Advertising Ecosystem with New Policies

Google revealed plans to stop individualized tracking to serve digital ads. Since it is the largest global purveyor of digital advertising, Google’s move will doubtless have an impact, possibly moving the entire industry away from the practice, which has been criticized by privacy advocates. Rather than build alternative tracking systems, Google is developing new technologies to target ads without collecting individuals’ information. One analyzes browsing habits and allows targeting of “cohorts” rather than individuals.

The Wall Street Journal reports that, “Google said in January that it plans to begin open testing of ad buying using that technology in the second quarter.” According to Jounce Media, Google accounted for 52 percent of last year’s worldwide digital ad spend of $292 billion and that 40 percent of digital ads outside “closed systems” such as Google Search or YouTube go through Google’s ad buying tools.

Google product manager David Temkin, who is in charge of the change, said, “if digital advertising doesn’t evolve to address the growing concerns people have about their privacy and how their personal identity is being used, we risk the future of the free and open web.” Google announced last year it would remove third-party cookies, the most widely used tracking tech, by 2022.

WSJ notes that currently advertisers use data from peoples’ browsing to target ads and determine whether targeted users actually bought the advertised product. With Google’s change, they “won’t be able to get as detailed a picture of either.”

Response from the advertising community has been mixed, with some smaller companies accusing Google and Apple of “using privacy as a pretext for changes that hurt competitors.” Some analysts pointed out that Google doesn’t need cross-website trafficking, because “it collects a large amount of data directly from users of its services, such as YouTube or Google Search.” Google plans to continue to use this so-called first-party data for targeting ads on its own websites.

Google added that its new tech “only covers its ad tools and unique identifiers for websites, not mobile apps, meaning a substantial slice of the digital ad ecosystem wouldn’t be affected.” According to eMarketer, “mobile ad spending accounted for 68 percent of all digital ad spending in the U.S. in 2020.”

WSJ adds that, “Google’s announcement complicates advertising industry efforts to come up with an alternative, more privacy-friendly technology for targeting individual consumers, such as the one being led by the Partnership for Responsible Addressable Media … [which] would rely on new identifiers, like strings of numbers and letters derived from users’ email addresses.”

Meanwhile, The New York Times reports that Facebook will “lift its ban on political advertising across its network, resuming a form of digital promotion that has been criticized for spreading misinformation and falsehoods and inflaming voters.” With its new policy on political ads, advertisers “must complete a series of identity checks before being authorized to place the ads.” Facebook added that, for political adds, “it could take up to a week to clear the identity authorization and advertising review process.”

Related:
Google’s User-Tracking Crackdown Has Advertisers Bracing for Change, The Wall Street Journal, 3/3/21
Google: No Tracking Tools to Replace Third-Party Cookies in Chrome, VentureBeat, 3/4/21