Facebook Plans a Privacy-Focused Approach to Rebuilt Its Ad System
A remarkable shift by Facebook is underway as it plans a new privacy-focused revamp of its advertising system. It reveals to place more value on user privacy and less reliance on data collection. The social giant business is known for its ability to track users across the internet and utilize the information for its ad targeting processes. Owing to impending regulation and data collection limitations, it is working to create a system that delivers personalized ads without any individual user’s data. Facebook’s VP of product marketing, Graham Mudd explained,
With Apple and Google continuing to make changes via their browsers and operating systems, and with the changing privacy regulatory landscape, it’s important to acknowledge that digital advertising must evolve to become less reliant on individual third-party data. That’s why we’ve been investing in a multi-year effort to build a portfolio of privacy-enhancing technologies and collaborate with the industry on these and other standards that will support this next era.
The privacy-enhancing technology includes cryptography and statistical techniques that will improve ad measurement while relying less on individual data.
We are optimistic that new privacy-enhancing technologies will prove that personalization remains possible and effective as our industry evolves to become less reliant on individual third-party data. These technologies will help us minimize the amount of personal information we process, while still allowing us to show people relevant ads and measure ad effectiveness for advertisers.
Another key area that the social giant is exploring is ‘on-device learning ’. It is a technology that will process data locally on their device rather than sending individual data to a remote server or cloud to determine the best ads for the user. The results are later sent in an anonymous format to the advertisers. However, Graham Mudd explained the challenge in an interview with The Verge,
I think one of the challenges with on-device learning is that the compute resources required to do it are obviously under the control of the operating systems themselves.
The stakes couldn’t be higher for Facebook to get the systems right. Graham Mudd said that,
We definitely see that personalization will evolve very meaningfully over the course of the next five years. And that invest in Privacy-Focused will benefit all of our customers and enable us to help shape that future state of the ads ecosystem.
Facebook’s major changes come amidst government scrutiny and Apple’s App Tracking Transparency (ATT) update. Furthermore, even Google is exploring an advertising system that is more user-privacy-centric.
Apple’s new prompt to ask for permission to track the users for targeted ads is likely to hurt Facebook’s revenue growth. However, the true impact of prompt is still evolving and the report shows that not many iOS users are opting for app tracking. Therefore, this leads to a broad range of data tools that are required to attribute ad responses. Facebook is developing a new range of options on this front.
Providing more insight the social firm is working on privacy-enhancing technologies (PETs) for ads that will minimize data collection, protect personal information while preserving ad measurements.
So, it is working to explore various ways to implement these approaches to new measurement solutions,
Last year we began testing our Private Lift Measurement solution with select partners, which uses a privacy-enhancing technology called secure multi-party computation. This helps advertisers understand how their campaigns are performing while adding extra layers of privacy to limit the information that can be learned by the advertiser or Facebook. This solution will be broadly available to advertisers next year.
To give you a brief, Secure multi-party computation (MPC) allows two or more organizations to work together while limiting the information that either party can learn. Data is encrypted end-to-end: while in transit, in storage, and in use, ensuring neither party can see the other’s data.
The social giant emphasizes that for these technologies to be successful, they will need industry cooperation.
These technologies will only be successful for people and businesses of all sizes if there is industry collaboration and a shared set of standards. That’s why we are calling on platforms, publishers, developers, and other industry participants to work together — on these technologies and other privacy-focused standards and practices.
Google Tax: How The 2% Levy Affects Advertisers And Beyond!
Starting in October, Google is planning to pass on India’s 2% equalization levy, which went into effect in April 2020, to its clients whose ads are viewable in India.
Even if both the buyer and the seller are not based in India, the Google tax applies if the advertisement is visible in the country.
In 2020, the Indian government broadened the scope of the equalization fee, which had been levied on cross-border digital transactions since 2016 in an attempt to tax Google’s digital advertising revenues from India.
This was done to incorporate any acquisition made by an Indian or India-based agency through an overseas eCommerce portal.
A Google spokesperson went on record to say –
From 1st October 2021, we’ll be adding a surcharge to the invoices we send to non-Indian customers whose ads are viewed in India. The surcharge is to cover part of the costs associated with complying with the Indian Equalization Levy, which only impacts non-Indian advertisers. We will continue to pay all the taxes due in India and elsewhere
Here we can also recall how Apple since October 2020, is passing on the 2% equalization charge to Indian customers who buy applications or other products from its iTunes or App store. This excludes the 18 percent goods and services tax (GST).
This was essentially a levy on any programme purchased from Apple’s iTunes store.
Now, Google is taking a step ahead.
It is creating a situation where even though neither the buyer nor the vendor is an Indian if the advertisement is viewable in India, the tech giant’s tax will be charged.
Ajay Rotti, partner, Dhruva Advisors said that there will be a variety of circumstances where the service receiver is not an Indian firm, but the equalization levy will apply if the advertisement is directed at an Indian customer.
He added –
Google’s interpretation is in line with the provisions of the law which covers certain specified circumstances where the levy would apply. This would add to the collections of the revenue department going forward
The new rules identify online selling goods or services as any purchase made online, any payment made online, or even an accepted offer made online, and they apply to all transactions.
Even if only a tiny portion of a transaction was completed online and the remainder was completed offline, the 2% Google tax might be charged.
By the virtue of this Google tax, many businesses are now concerned that the charge will apply to a wide range of transactions, including hotel reservations, software purchases, and even the purchase of specific components from other countries.
According to legal experts, because of the way the law is written, even ERP (enterprise resource planning) systems—internal software systems that many businesses use—could potentially be deemed an internet platform and so be subject to the levy.
A senior lawyer said –
The way the equalization levy law is worded, almost every transaction that happens on the internet could potentially face the tax. Also, many companies are relooking at their existing structures to see if they can park the India specific activity in a separate domestic entity to avoid complications around equalization levy
According to tax specialists, Google‘s interpretation will have an influence on a number of other businesses.
Because tax rates in some countries are near to zero, several firms have formed holding entities in tax havens where most earnings are gathered or where intellectual property is held, saving taxes on overall revenue.
Hitting $61.9B, Google Parent Company Alphabet Revenue Rises By 62%
As of the end of the second quarter, Google’s advertising income was $50.4 billion, accounting for the largest chunk of Alphabet’s $61.9 billion in revenue.
Now, the world’s largest digital marketer has generated more than $560 million in advertising income over the previous three months – every single day!
Alphabet’s earnings are up 62 percent year over year from Q2 last year, when the firm experienced its first-ever sales loss owing to the global pandemic’s effects.
Sundar Pichai, CEO of Alphabet, and Google said in a prepared statement that the figures show a growing surge of online activity.
CFO of the companies, Ruth Porat said –
Revenues of $61.9 billion reflect elevated consumer online activity and broad-based strength in advertiser spend
Alphabet also carefully dissected the results of its many advertising departments. Ad revenue increased to $50.4 billion from $29.9 billion a year ago.
During the reporting period, search advertising brought in $35.8 billion, YouTube brought in $7 billion, and Google’s ad network brought in another $7.6 billion in media expenditure.
Traffic acquisition costs (TAC)–the amount of money Google needs to invest to get the attention needed to attract ad spend–kept rising in the third quarter, approaching $11 billion, up from $6.7 billion a year earlier.
Porat told investors on the company’s earnings call that Google’s search ad sales increased by 68 percent during the quarter, with retailer expenditure being a key contributor.
Additionally, Porat also said that YouTube’s 84 percent rise in advertising income over the period reflected the platform’s rising appeal among brand marketers.
She also stated that Google Ad Manager and AdMob were the two most important drivers of ad network spend.
The second quarter of 2020, which saw revenue decline by 1.5 percent yearly, was described by Alphabet executives as a “tale of two quarters” marked by an abrupt stoppage of advertising expenditure.
Marketers who promptly restarted their campaigns spent a large portion of their budgets online, as shown by Google’s recent revenue increase.
A Panoramic Perspective Of Amazon’s Advertising Business!
In the last five years, Amazon’s advertising business has boomed. It now has a DSP footprint that matches Google’s, and its SSP is the second most popular. In just the last year, the online retailer made more than $22 billion in ad income. Even for advertisers who spend a lot of money on the tech giant, Amazon’s advertising strategy and business remain inexplicable.
If we just take the case of Amazon’s video advertising, it is notable that the company built Fire TV, its most ambitious video project, and also controls Twitch, which began testing direct programmatic partnerships last year; and also owns IMDb TV, a free streaming platform. The Amazon DSP provides programmatic video advertising across the web, and in-feed video spots appear in Amazon searches to evaluate or explain products.
Video isn’t the only kind of advertising that’s growing in popularity. A rising number of brands use the DSP even though they don’t sell on Amazon or even have an e-commerce presence. They simply want to use Amazon shopping data to target customers throughout the web.
If you pick instances from your life, you will notice that Amazon knows about everything you shop for, the brand you use, your spending bracket, and which products are you most likely to use. Advertisers use this information tactfully to get you to buy their product.
Amazon has grown to become the third-largest digital ad market in the United States, and a rising competitor to challenge Google and Facebook’s digital ad duopoly.
While it is a bit perplexing to untangle Amazon’s colossal advertising business, we have to go in-depth into its fabric to comprehend its adtech behavior. Keep reading below to get a bird’s eye view of Amazon’s advertising business model!
How Big Is Amazon’s Advertising Business?
From Amazon DSP to Sponsored Display, there is an eclectic range of advertising solutions that Amazon offers to people. Want to know how far spread is Amazon’s ad business? Check these out:
- Amazon Live – Allowing real-time brand interaction, Amazon Live offers the opportunity of contacting shoppers in real-time and engage in interactive shopping experiences.
- Amazon Attribution (Beta) – This solution provides marketers with an understanding of how their non-Amazon marketing portals impact shopping and sales activities on Amazon through search, social services, video, display and e-mails.
- Amazon DSP – Amazon’s demand-side platform (DSP) allows users to reach customers throughout the web, including on Amazon sites and applications, as well as through publishing partners and third-party exchanges.
- Sponsored Display – Amazon advertising platform offers this solution to help you target the perfect audience for your business both on and off Amazon with display ads that you can develop in no time.
- Sizmek Ad Suite – From creation to distribution, this ad server on Amazon will help you disseminate your campaign across a variety of screens.
- Sponsored Brands – With personalized ads that display in Amazon shopping results, you can increase brand recognition and product discovery for your brand and product portfolio.
- Post (Beta) – Posts in beta tell your brand’s narrative to relevant Amazon shoppers as they browse your categories. Shoppers may explore your brand’s feed by clicking through Posts and discovering product pages directly from your feed
- Custom Advertising Solutions – If you want to increase your brand awareness and conversation, Amazon’s Custom Advertising team will collaborate to create campaigns that engage customers at all phases of the marketing funnel.
- Audio Ads – Extend your brand’s reach beyond the screen with audio adverts. These ads are seen during commercial breaks while listening to Amazon Music’s free tier on Alexa-enabled devices, such as Echo and Fire TV, as well as on mobile and desktop.
- Stores – With a self-service store, you can create and design a unique brand destination on Amazon for no extra charge.
- OTT ( Over-The-Top) And Online Video Ads – This solution helps you reach a wider audience and engage them on Amazon-affiliated sites like IMDb.com and Twitch, as well as devices like the Fire TV and the web.
- Sponsored Products – With advertising that appears in shopping results and on product pages, you can help people discover and buy the things you sell on Amazon. There is no requirement for prior advertising experience.
Amazon Ad Business Growth
During the pandemic, ad spending saw a significant cut by marketers and we saw the rise of e-commerce advertising. As more and more people shopped from home, Amazon embraced this e-commerce advertising like no other company.
According to EMarketer, Amazon controlled 10.3 per cent of the US digital ad market in 2020, up from 7.8 per cent in 2019, putting it in direct competition with Google and Facebook for ad dollars. Walmart, Instacart, Walgreens, and other businesses have also joined Amazon.
Amazon made $21.5 billion in advertising revenue in 2020, up from $9.3 billion the previous year. While advertising accounts for a small portion of Amazon’s revenue from retail sales and Amazon Web Services, the company’s cloud division, it is one of the company’s fastest-growing segments. Advertisers’ search spending, which is primarily directed to Google, are continuing to be slashed by the internet giant.
All of Amazon’s advertising strategy is well thought out and will contribute to a booming ad business growth in 2021 as well.
What Is Amazon Advertising Business
Advertisers and sellers frequently cite a lack of data and tools as obstacles to advertising on Amazon, which has spawned a cottage industry of companies dedicated to assisting marketing on the platform. Meanwhile, Amazon’s OTT division, which sells adverts in select Amazon Fire TV apps, has pushed further into programmatic advertising.
The four key areas where Amazon’s advertising business model skyrockets include video, non-endemic advertisers, conquesting, and polished targeting and measurement. Let’s have a look at these areas:
Video
Amazon’s advertising business is not just about Prime Video, but also Fire TV, where Amazon sells around a third of the inventory. Fire TV has a footprint of around 50 million US households and is the only platform where TV-style video commercials may be directly linked to sales.
The only way one can get their hands on the Fire TV inventory is the Amazon DSP. Advertisers can still get on Fire TV without having to go via Amazon because programmers keep 70% of the inventory to sell themselves. However, only the Amazon DSP can use logged-in Amazon data to boost those purchases or attribute ads to online sales.
Although adding video to static sponsored product listings can be costly, Amazon finds it easier to sell because those units are offered per click, exactly like sponsored search.
In comparison to the programmatic video, where companies pay per impression and views are counted at the second mark, the pay-per-click approach can appear to be a good deal.
Because Amazon is selective with its sponsored videos, only showing in-depth product videos on highly relevant searches and for reputable brands, sponsored video listings are becoming a key signal of brand reputation.
Conquesting
Conquesting is actually a really intelligent way for the Amazon advertising platform to accommodate sponsored ads. When you do a product search on Amazon, there are sponsored products that show up. Here, advertisers bid on certain terms, and advertisements with greater bids have a better chance of being seen.
What happens on Amazon is that, because of this bidding, when you search for a product by a specific company, the products of a rival brand pops up first. This is what advertisers call, conquesting, or the buying of terms against search terms for rival products.
Advertisers can also purchase “sponsored brands” listings, which display in search results to assist consumers in finding a specific brand.
Furthermore, because Amazon’s purchasing data is so thorough, marketers may save money by not advertising to consumers who have just purchased a product and will not be purchasing it again very soon.
Non-Endemic Business
Beyond its base of e-commerce marketers, Amazon is also looking for expansion. The Amazon DSP created a dedicated ad sales team for non-endemic brands. What this means is that hotels or resorts can use Amazon to target audiences on search terms such as “ travel stationery” or “ mini travel kits”.
Targeting And Measurement
With a cloud-based data clean room in beta, Amazon is fine-tuning its targeting and measurement. Amazon’s cleanroom expands the possibilities for leveraging Amazon’s buying data.
The Amazon DSP, for example, has a 14-day attribution window. Advertisers can test longer attribution windows using Amazon’s marketing cloud.
Amazon has a plethora of data about how consumers shop and has made additional information available to advertising to help them buy and target adverts. Advertisers, on the other hand, claim that Amazon’s data is restricted and that they are constantly looking for new ways to measure ads.
Amazon Ad Business Revenue
According to Loop Capital, Amazon’s advertising unit currently contributes 2.4 times as much revenue as Snap, Roku, Twitter and Pinterest combined, and it is growing at 1.7 times the rate.
According to Amazon, in the first quarter of 2021, its unit which is mostly made up of advertising but also includes sales connected to other service offerings, increased revenue by 77 per cent year over year to more than $6.9 billion.
According to Loop, Amazon made $22.4 billion in ad income in the last 12 months, growing 65 per cent year over year. That was 2.4 times the combined income of middle-cap ad platforms Snap, Twitter, Roku, and Pinterest, which increased by 38% over the same time period to $9.3 billion.
Amazon Business Marketing Strategy
When it comes to Amazon advertising strategy for 2021, it is evident that the company has well thought of all the challenges and advantages of the same. Here are 4 such strategies:
Optimized SEO
When buyers search for relevant search terms, optimizing your products for Amazon SEO will help them find them. Well-described product searches are prioritized by Amazon’s search engine and pinned to the top of the recommended searches.
PPC Advertising
Your business will receive more visitors to your product listings if you use Amazon advertisements. You can ensure that these ads create sales by delivering them to the most appropriate shoppers, thanks to Amazon’s extensive targeting choices.
If you decide to use PPC (Pay-Per-Click) in your Amazon marketing strategy, you’ll be able to choose from a variety of ad types such as Sponsored Brands, Sponsored Products, and Sponsored Display.
Third-Party Advertising
Even if you sell on Amazon, your advertising doesn’t have to be limited to the platform. Increased clickthrough and conversion rates can be aided by third-party advertising. Make sure you use data to optimize your advertising at all times. This is greatly aided by automated data reporting.
Affiliate Marketing
Amazon has an affiliate programme that allows website owners to promote Amazon products on their own sites. A commission is earned when users click on these links and purchase a product. This is an effective Amazon marketing tactic because it brings in new customers to your Amazon website. Putting your products on other websites can bring in a whole new set of customers that you wouldn’t have gotten otherwise.
Advertising: Amazon Vs Google Vs Facebook
When it comes to paid search advertising, Google Ads has been the standard for years. However, as its advertising powers develop, Amazon and Facebook are swiftly becoming a formidable force within their own right.
If you’re a digital marketer, marketing manager, or business owner, you’ll almost certainly be using Google for advertising or all of these platforms at some time in your career. But each time, there will be an inextinguishable dilemma as to which one suits your needs the best. So, we have curated something that will help you decide – keep reading!
Google Ads
Retailers who sell a wide variety of products prefer Google Ads. The greater the number of products you have, the wider the net you can throw in Google. That’s a roundabout way of suggesting that you may bid low on a variety of keywords and yet get a lot of traffic.
Amazon Ads
Unlike the other shops, Amazon has made its platform available to third-party resellers, which means you won’t have to wait for a Target (or Amazon) customer to locate you. All you have to do is upload your products to Amazon and you’re set to go.
Facebook Ads
The Facebook Ads algorithm is fantastic at displaying the correct ads to the right individuals. This makes Facebook Ads ideal for startups with a specific product. It’s almost as if the fewer products you have, the better.
Another significant benefit of Facebook Ads is the level of inventiveness available. 15–30 second videos, media-rich photos, comments, text, and more are all included.
Is Google Advertising Worth It?
Google advertisements, which are paid for by businesses, can be an exceptionally successful means of sending relevant, qualified visitors to your website at precisely the right time when people are searching for the items or services your company provides.
If you are using Google for advertising, then you can use various types of ads such as Search Ads, Shopping Ads, Display Ads, And Video Ads (YouTube).
There are a plethora of Google advertising benefits for small businesses such as the ability to reach motivated and targeted audiences, as well as a pay-for-performance pricing mechanism and an easy-to-follow ROI.
If your budget is an issue, you can dodge contending larger organizations by utilizing more longtail and local keywords, which will lower the cost of bidding on keywords that everyone wants. These keywords may not be as popular as the others, but they will still help you drive more high-converting traffic to your website.
While talking about the Google advertising business model, it is also important to talk about the cost.
Google Advertising costs vary depending on a variety of criteria, including the competitiveness of your keywords and industry, your geographic region, the quality of your advertising campaigns, and more. The average cost per click for Google search advertisements in the United States is $2.32 across all industries. The average cost of Google Ads in other countries is frequently substantially lower.
Facebook Advertising: Policies And Strategies
Facebook advertising is available in a variety of formats. You can advertise your Page, its content, user behaviors, or your website as a whole. Despite Facebook’s increased focus on native ads and keeping customers on the platform, you may still drive traffic to your website.
Facebook advertisements used to be more like display ads than search ads, but newer versions, such as product ads, allow advertisers to sell things directly to users.
One of the major Facebook advertising benefits is that you can directly target users by using these components – location, age, gender, interests, connections, relationship status, languages, education, and workplace.
Facebook also allows for detailed interest targeting. Users can be targeted using Detailed Interest Targeting based on information in their profile, such as “listed likes and interests, Pages they like, apps they use, and other profile (timeline) content they’ve provided” (according to Facebook). With Detailed Interest Targeting, you’ll get the best return on your investment.
Is Facebook Advertising Better Than Google?
To answer this age-old question, we have to assess the strengths of both Google and Facebook advertising. Let’s get started.
Advantages Of Google Ads
- A wider audience – One of the biggest benefits of using Google as a platform for advertising is its massive reach. Google processes around 40,000 search requests each second, for a total of over 1.2 trillion web searches per year. It’s simple to see why AdWords is the most popular and frequently utilized PPC platform in the world, thanks to Google’s more accurate search results.
- A vast range of ad formats – Advertisers can employ ad extensions, site links, social proofing like user reviews, location targeting, Shopping advertisements, and a variety of other capabilities, giving them an unrivalled level of personalization and control. Google has even created ad formats that are suited to the specific demands of different types of businesses.
Advantages Of Facebook Ads
- A powerful visual medium – The greatest Facebook advertisements mix in perfectly with the videos, photographs, and other visual content in users’ News Feeds, allowing advertisers to take advantage of not only the visual ads’ strong persuasive capabilities but also the aspirational language that makes high-quality ads so appealing.
- Unmatched ROI – One aspect of Facebook Ads that frequently surprises newcomers is the potential return on investment that advertising on the network provides, as well as how far skilled advertisers can stretch a small ad spend.
So, to answer the question of which is better – Facebook or Google – the answer is both. Both the platforms serve differently to different businesses.
Furthermore, many businesses are combining the benefits of Google Ads and Facebook Ads to gain maximum visibility, improve leads and sales, and attract new consumers, using diverse techniques that align with the functionality of each platform and generating impressive returns on their advertising expenditure.
Conclusion
Having seen a panoramic perspective on Amazon’s advertising business along with Google Ads and Facebook Ads, it is safe to say that Amazon is right in leading the other two in this area. Here’s how –
- Amazon is distinct from Google and Facebook in that it is primarily focused on a bottom-of-funnel audience, whereas Facebook and Google are more directed toward the top
- Amazon advertising has a higher CPC, conversion rate, and average rate of return than Google or Facebook advertising. Amazon is your greatest option if you want to maximize your Return on Ad Spend (ROAS)
With Amazon’s growing popularity, it is likely that it will shine as the best advertising business platform soon.
Neeva : An Ad-Free Search Engine Launched By Former Google Ads Head
After a long tenure as Google’s head of search and advertising products, Sridhar Ramaswamy left the business three years ago. His experience of managing the world’s largest ad-supported firm was one of the most powerful in advertising, and it prepared him for virtually any leadership post in data-driven marketing.
This is why, it was quite the shocker when Ramaswamy co-founded Neeva, a search engine with the purpose of never including advertising. After one year of testing with a 10,000-person user base, Neeva has now been launched to the public.
Ramaswamy went to record to say –
“ We started Neeva because we love search, the technical problem. But we thought the long-term consequences of a primarily ad-supported model for the search engine was more and more about the advertiser, rather than the user or the customer.”
In a conversation with AdExchanger, Ramaswamy went on to speak at length about his motivation and ambitions regarding this project.
On being asked why he decided to launch a new search engine, the former Google head said that he considers this market to be incredible and dominated by one single player.
The reasoning behind a new search engine, Ramaswamy says, is to have a fundamentally distinct business model as a strong base of a new product that would allow Neeva to compete more successfully than other search engines that try to replicate Google’s offerings.
When the obvious question of – why is Neeva different – was thrown in the air, Ramaswamy said-
“We describe it as a private and personalized search experience. And it is a subscription search engine.”
He added that as of now, they have 10,000 users. And about the pricing, Sridhar Ramaswamy said that they are still deciding on how much to charge for the subscription, but it will hit the ballpark of $5 per month across the US. Furthermore, he said that his team is still in the process of creating a search stack.
AdExchanger then asked – “Why the commitment to an ad-free search engine?”
Ramaswamy replied that Neeva’s logic is based upon the fact that any ad-supported business model is built on collecting large amounts of data; and over time, the user experience takes a back seat to advertising. This makes it hard to distinguish an ad from organic content.
Moreover, he says that at Neeva, nobody will have to wonder about affiliate links. The aspiration behind this search engine is to create trust and make it user-oriented.
Ramaswamy also said during this conversation, that if publishers provide Neeva with content, then a portion of the revenue will be shared with them.
When asked if there were ways for marketers to reach users apart from advertising, Ramaswamy said that they have worked with SEO players and site owners to keep their content relevant.
They have also created a product known as Spaces, which can be conceived as a user’s thoughts and images related to a specific topic.
He adds further that the aim of Neeva is to bring together customers with content creators on the internet, without taxing anyone for it.
Relief To Advertisers As Google Postpones The Elimination Of Third-Party Cookies Till 2023.
The news has given some time to the advertisers to look for options. Google has decided to continue using third-party cookies in its browser till 2023. That is an extension of two years.
Earlier, Google did set this deadline for January 2022. It has now extended to late 2023. An announcement was made by Google regarding this today!
There are several reasons why Google decided to do so. Let’s have a look at them in detail:
The United Kingdom was building pressure on Google
For a year, it is chaos, and advertisers were clueless about their operations without the third-party cookies. However, the speculations are that Google decided under building pressure from the UK government.
Google was under continuous monitoring by the European Commission, and it failed to provide any clear perspective on its Privacy Sandbox. Google is facing several antitrust lawsuits, and according to the CMA, the discontinuation of third-party cookies and the creation of the Privacy sandbox will centralize power at Google.
CMA took this quite seriously, and to please the committee, Google has agreed with a long list of commitments to CMA. According to Google commitments, the company will restrict giving priority to its system. Also, it will not use “sensitive information provided by an ad tech provider or publisher to Chrome in a way that distorts competition.
To prove the point, Google stated that “Subject to our engagement with the United Kingdom’s Competition and Markets Authority (CMA) and in line with the commitments we have offered, Chrome could then phase out third-party cookies over three months, starting in mid-2023 and ending in late 2023.”
Federal Learning Of Cohorts(FLoC)
Google will continue testing FLoC and Privacy Sandbox. The trials for FLoc will continue and concluded by 13th July. Currently, only limited supply-side publishers and ad-management firms related to them will be able to FLoC during the trial phase. Once the tests complete, Google will share the results. These results will help in the improvements and can be applied to the existing system, and other agencies and advertisers can conduct the ability tests for demand-side platforms and ad-targeting.
It is not surprising that Google has paused the FLoC trials. The advocates of privacy are raising their voices about the foul play and violation of privacy due to the enabling of new tracking techniques. However, several browsers declined to enable these techniques of data tracking.
Google received a setback after the eCommerce giant Amazon, which has also declared that they will not be enabling the FLoC tracking techniques.
Demand for higher transparency
The delay in the release of FLoC and the dismissal of third-party cookies is causing frustration in the industry. According to an executive, “I wish they would just do it. Stop justn — excuse me — dicking around the whole industry. Let everybody get to a new normal. It’s hard to strategically plan this way,” said one publishing executive.
However, the delay in the dismissal of third-party cookies can be a step to make things more transparent as Google does not want to bear more criticism and lawsuits from the authority.
Google has already committed to CMA that they will be disclosing the exact time for the proposals for Privacy Sandbox publicly. It will also release the API and inform about the transition period for the discontinuation of third-party cookies.
Google has also promised the CMA that they would assess all alternatives for individuals and the aftermath of the discontinuation of third-party cookies. Google also stated that these steps will be taken before providing a 60-day countdown for the discontinuation of the third-party cookies. During this period if found any discrepancies, CMA can reopen the investigation and can impose additional measures to avoid any harm to the competition.
According to Google promise, they will “engage with the CMA in an open, constructive and continuous dialogue in relation to the development and implementation of the Privacy Sandbox proposals.”
Amazon Blocks Google FLoC – Here’s Everything You Need To Know!
Amazon has disabled Google’s contentious cookieless tracking and targeting technology.
According to website code analyzed by Digiday and three technology experts who assisted Digiday in reviewing the code, most of Amazon’s properties, including Amazon.com, WholeFoods.com, and Zappos.com, are preventing Google’s tracking system FLoC ( Federated Learning of Cohorts) from gathering valuable data that show the products people research in Amazon’s vast e-commerce domain.
Amazon, however, has refused to comment on this story.
Because Google’s system collects data about people’s web activities to inform how it classifies them, Amazon’s indiscernible action is a major blow to Google’s plan to guide the future of digitalized ad tracking after the collapse of cookies.
Amazon’s this move could also give it an advantage in inflating its own efforts to sell advertising across the open web.
Amanda Martin, the Vice-President of enterprise partnerships at Goodway Group, said-
“This move is in direct correlation with Google’s attempt to provide an alternative to the third-party cookie.”
Martin also referred to Amazon’s decision to block FLoC on most of its sites as just another example of the chess moves that Google, Apple, Facebook, and Amazon are making as data privacy demands push the demolition of the cornerstone of data tracking throughout the internet: the third-party cookie.
Last week, Digiday saw as Amazon updated code to its digital assets to prevent FLoC from monitoring visitors using Google’s Chrome browser, with the assistance of three technologists.
Up until 10th June, WholeFoods.com and Woot.com did not include any code to bar FLoC, but since that day, the sits added a code telling Google’s system not to include activities of their visitors to inform cohorts or assign IDs.
However, there is one limitation with FLoC blocking on Whole Foods pages. While the other Amazon-owned domains described here that block FLoC use Google’s suggested technique of sending a response header from HTML pages, Whole Foods uses an opt-out header from Amazon analytics queries.
One of the technologists said that the distinction is significant because Amazon’s approach for most sites employs the technique recommended by Google, which is 100% effective. So, according to the technologist, the approach used to block FLoC on Whole Foods Pages could be an intentional move by Amazon.
At this point, we can ask – why exactly is Amazon blocking FLoC?
Here are some reasons –
- To Protect Its Own Intellectual Property
Amazon may be wanting to block FLoC to preserve its data that shows people’s behavior in the products they research, review, and buy online. Amazon is celebrating its Prime Days today, i.e., the 21st and on the 22nd of June and it expects its site to be filled with shoppers.
This is why this seems like the ideal time to mark boundaries and prevent Google from accessing its valuable data. Amazon is just looking out for the best strategies to protects its shopper data from Google and ad tech firms alike.
- For Competitive Reasons
Amazon aspires to capture a larger share of the ad capital that Google controls by selling digital advertisements outside of Amazon sites. As Amazon’s demand-side platform business grows, the company intends to release an identifier for monitoring and analyzing advertisements sold through the DSP and by publishers via Amazon’s publisher services division.
An Amazon-focused agency executive, during a conversation with Digiday, said-
“ Why give Google an inch?”
Conclusion
FLoC is meant to safeguard people’s privacy, according to Google, because it utilizes machine learning to categorize them based on the web pages they have visited rather than tracking them individually. The technology is now in its initial stages and it collects data on which websites, content, and items users are interested in.
By blocking FLoC, Amazon will not be able to grasp the clues that FLoc IDs provide that give companies access to people’s behavior online.
Re-Inventing Adtech: The French Competition Authority’s Google Fine
The French Competition Authority ( ADLC), in an unprecedented move last week, announced its decision to penalize Google for 220 Million Euros. This decision comes in the backdrop of the tech giant’s anti-competitive activity in the AdTech sector. The relevance of such a ruling is that Google took advantage of its hegemony via numerous anti-competitive measures aimed to forestall rival agents at the expense of publishers.
ADLC’s decision to fine Google comes at a crucial time for the company when it is already under scrutiny for its AdTech practices by various other competition authorities. Such authorities include the Italian Competition Authority, Market Authority, the UK Competition, and the European Commission. On behalf of a multistate coalition in the US, the Texas Attorney General has also filed a lawsuit against Google.
The French Competition Authority has held Google accountable on the basis of the fact it engaged in two cases of abuse – one, where Google’s ad server favored its ad exchange, and two, where its ad exchange favored its ad server.
By sharing information of the price offered by rival ad exchanges to its ad exchange, Google used its ad server to favor it. Google’s Ad Exchange then used this information to enhance its bidding, and in varying the commission that it charged the publishers based upon the competition the company faced from rival ad exchanges.
Google also enforced limitations that were technical and contractual in nature on the use of its ad exchange through a third-party ad server. As a result, the interoperability terms offered to third-party servers were inferior to the terms between its ad exchanges and ad server. This fined both third-party ad exchanges and the publisher clients.
ADLC’s groundbreaking decision has also laid down the harmful effects of Google’s behavior on publishers. It is harmful because Google’s activity has prohibited publishers from seeing a more invisible net negative effect.
To elaborate further on the harmful effect, they include –
- High pricing on its ad exchange where Google behavior hindered competition
- A poor publisher revenue because of Google’s attempt to degrade its rival’s SSP’s performance against Google ad exchange, which makes the ad exchange’s contribution look much bigger than it actually was
- ADLC explicitly laid down an instance where Google’s mechanisms might come across as if they are benefitting publishers but in actuality, they don’t. ADLC said- “Google’s ad exchange’s dynamic revenue share reduces not only the impression volumes won by rival SSPs, but also the total revenue of the publisher”.
The French Competition Authority’s move to fine Google is necessary and critical and it addresses at least some of the anti-competitive tactics employed by Google. This decision is significant in re-inventing the AdTech space and recreate competition and innovation. Because of this move, the publishers – who are the immediate victims of Google’s activities – will gain more freedom. The publishers will be able to choose their technology partners and regain control of their most important assets such as content, audience, and data.
Overall, ADLC’s decision is just one groundbreaking move in creating a more just fabric for the AdTech sector, and there are more milestones to go.
End Of Third-Party Cookies, What Is There For Marketers: Takeaway!
Introduction
Google has announced that Chrome will not support Third-party cookies. Following this, other browsers are following the footsteps of Google. Also, one must not forget that Google has the largest market share of the advertisement business. Therefore, it would not be false to say that it is the end of an era and the inception of effective advertising is taking place.
Understand the behavior of Third-party cookies!
Since the Third-party cookies will perish soon, it is not a tutorial on how the third-party cookies work. However, you can consider this as good information. It will help you understand and devise new strategies for launching an upcoming advertising campaign effectively.
Cookies
Every time you visits a website, a cookie-enabled website monitors the user behavior. It stores the information in its stores so that when someone visits the website next time, it can populate the results according to the choices made by the user on their previous visit.
Cookies are small storage units that can save a proportion of data for the user, and later the advertisers can use the data to study the user behavior and ease their experience by providing them with the results according to their interests. The cookies used by the website are known as first-party cookies. It solely belongs to the website and can only be accessed by the development and advertising teams of the website. They use this data for understanding the user behavior, and populating advertisement and results based on the user’s preferences.
However, the Third-party cookies do not belong to any website. They connect to an advertising server that also reads the user behavior the same way as the first-party cookies. Third-party cookies are independent of any website and can use the data to trace the overall journey of a user on the internet and later map the data and provide advertisement across the internet as per the preferences made by the user on any channel that they might have used. This data is vulnerable and can be accessed or purchased by different organizations to fulfil their goals of running successful advertising campaigns and portraying their products so that users can be drawn to a particular website and compelled to purchase products.
How advertisers will be affected by the discontinuation of Third-party cookies?
The news has created a commotion in the advertising world and left the advertisers thinking about their next step. There is a rumor that things will worsen for the advertisers, and there will not be a freeway that will lead them to success. However, it is not all true!
Yes! Ending third-party cookies will have some drawbacks, and the small advertisers who were gaining benefit from small investments in the marketing world will have to suffer for a short period. However, the ending of third party cookies has opened a void that is also a gateway for opportunities for the new ecosystems to emerge. An example of this is the emergence of Amazon who is ready to fill the void with its informative system. Amazon is in word with several companies to come together and create a new informative system that will be solely working on the Amazon ecosystem.
Soon the other companies will see the opportunity and will try to Ancash it with their ecosystems. Therefore, there is a greater chance that Google will lose its monopoly in the advertising world.
Firstly, it will help the advertisers to frame their campaigns better. Keeping in mind their needs and the audience they want to reach. Secondly, it will ensure that the user data is safe and secure. If there is a breach user will know whom to blame.
The step to end the Third-party cookie is an aftermath of continuous interrogation and questioning about the security of user data by authorities of various countries. Companies like Google and Facebook have faced a lash from government authorities for their failure to prevent the security breach on their server. Hence, the discontinuation of Third-party cookies is seen as a positive reinforcement to prevent the user data from getting public and sold on the dark web.
Due to this step, there will be more transparency, and advertisers can benefit from it along with the users. It will lead to an authorized sharing of data with authorized publishers and with trusted partners only. Hence, creating a secure ecosystem for all.
It will lead to security, and now the advertisers can even make a stronger bond with the customers as the end-users will be able to put deeper trust in the brands. The approach will end the leakage of the data to unauthorized sources. It will give an upper hand to the brands which customers trust and ultimately eliminate the untrusted brands creating a sustainable ecosystem. However, this does not mean that new brands can not emerge. They will have to go through vigorous security checks and have to prove their loyalty to the customer and promise the security of their data.
Revolution has started!
The revolution has already begun! Advertisers and marketers have already started shifting their focus from third-party cookies to first-party data. It is a good thing as there will not be any manipulation in the data received from the first-party websites and the campaigns can be run effectively generating better results for the advertisers.
In the age of pandemic, people were forced to shop online on a more frequent basis compared to earlier. Hence, the first-party data can prove to be highly useful for the advertisers as things have started to relax. Advertisers approach the user more confidently with trusted data provided by the authenticated websites.
Yet, there is a larger population of advertisers who are still relying on third-party data. According to research conducted by Forrester for Permutive, it was concluded that approximately 41% of marketers are still relying on the data generated by third-party vendors. However, they must understand that it is a peak time to change their approach or they will perish along with the third-party data suppliers. Hence, it is time to get rid of the old ways and adapt to the change.
The Future is here!
As the sun is setting for the third-party cookies, it is expected that approximately 95% of the web will become anonymous. Therefore, creating a huge void on the web providing a basket of opportunities for new ecosystems to emerge and establish a milestone and registering their name and catering for a huge audience.
It is crucial to note that cookies will be of paramount importance in the future. Publishers will have to establish the connection with the users using the cookies, and there will not be another way around.
Using the first-party cookie data by the publishers can build an effective strategy to overcome failures. They will get the data directly from the websites instead of putting their trust in any third-party vendors.
Google has announced its Federal learning of Cohorts (FLoC) which will determine the preservation of privacy. Hence, providing a mechanism that will help advertisers select advertisements based on the user interest.
The cohorts at the publisher’s end will ensure that privacy is maintained preventing leakage of data. It will also allow them to gather and categorize information, as the data and inventory will be connected.
Even though the collection of data via first-party channels will get painless and authentic. Yet, advertisers are in dilemma and unsure about moving to a first-party ecosystem. However, there is no need to panic! It’s all about finding the right partner who can welcome you to their ecosystem and make you feel like family.
Conclusion
We understand that many of you are looking for answers to this problem. However, it is not a time that one should spend worrying. It is an opportunity that must be explored for building a strategy and start experimenting with the ecosystems. It will help you gain momentum and have a better understanding of the ecosystems. Remember that we live in a world of uncertainty, and being prepared for the unexpected is the best we can do.
Amazon Is Creating Ripples In The Digital Market With The Announcement Of Its Identifier.
Discarding the third-party cookie by Google is the hot topic of discussion in the technology market. By this move, Google is trying to benefit its publisher services and DSP. However, this has created a void in the market, and Amazon is all set to fill this void.
To make sure that the void is sealed the eCommerce giant is meeting various leading companies to discuss and plan techniques that will help them track the customer journey over the internet using Amazon’s advertising ecosystem. It has been found that three prominent companies are already in discussion with Amazon regarding this. Therefore, one can soon expect to have an identifier by Amazon. However, the timeline has not yet been shared by the tech giant.
There are several open identifiers available in the market like Live Ramp and Trade Desk. However, Google has made it clear that they will not be supported any longer. On the other hand, the new identifier launched by Amazon will be limited to its ecosystem. It could be a concern for many advertisers. However, they must understand that it is time to choose a side and decide which boat they will be sailing.
“They are thinking about it more in terms of Google’s ‘ppid,’ where it’s siloed to a particular network of O&O sites,”. “It would be more as a means to inform their DSP of frequency and attribution while maintaining an identity silo.” The statement was released by one of the companies which is in talks with Amazon regarding its new identifier.
Even though the date for the launch of the identifier is yet not released, it has created a wave of commotion in the advertising industry. It is reported that Amazon is working vigorously to make things possible. However, its priority is to make the security non-penetrable. When compared to Google, Amazon is a small fish in the advertising industry. Therefore, such a bold step was not expected by Amazon as there is so much to invest before Amazon can eat the fruits of success. According to a spokesperson the identifier will be operative following Amazon’s opt-out policies, privacy notice and interest-based ads.
However, it is a speculation that once things are in motion, it can turn the tables around and end the monopoly of Google in the field of advertising. It is not just a speculation, but after monitoring last year results of a survey conducted by the Advertisers Perception, it was found that Amazon’s DSP ranked first among other DSP’s.
It will not only help Amazon to set a firm foot in the field of digital advertising but will also help in boosting its APS business.
APS was always going to be a differentiator for them, An identifier’s kind of a door opening to push this more,”
#MightyHive, commerce practice director, Nicholas Seo.
As stated above, the identifier can create a new era where advertisers have to choose or invest more money in their advertising strategy.
According to a source of the company, in talks with Amazon about its new identifier stated:
“I do wonder if the buy-side is ultimately just going to have to settle for a set of further fragmented buys than what they do today”.
However, there are no executives available who can give a clear perspective of this new identifier and answer the queries of an individual. Yet it has been said that the identifier will be only available to those who will fulfil the requirements of Amazon.
Google is yet to work on the fundamentals of Publishers Provided ID, and it is in an experimental stage. It is important to note that PPI has played a crucial role in deals made in the private marketplace.
However, the ability of Amazon to map the transactions has given him a better hand with a stronger DSP. It is sure going to give Amazon an upper hand.
“As advertisers look to navigate the future, they are going to continue to look to partners in the near term who can do 1-to-1, both targeting and measurement, the measurement front, the partners that have that closed-loop look are going to become increasingly important”.
#Lauren Fisher, Advertiser Perceptions, EVP of business intelligence at the research firm.