What Exactly Is a FLoC and What Does It Mean for the Future of Advertising?
It’s no secret that data privacy is becoming a mainstream issue. With everything from the recent Facebook data management scandals making headlines to the election scandals of the past several years, managing their usage of consumer data has become something more and more publishers are beginning to prioritize. Google recently announced what they claim to be a major improvement in digital privacy, but does the reality hold up to the expectation or is it just more ads targeted based on our online activity?
Here's what they changed: Google currently uses third-party data called “cookies” to serve you relevant ads, but that is coming to an end soon. Instead, they have decided to move forward with a new system called Federated Learning of Cohorts, or FLoC.
As it currently stands cookies collect information from consumers’ browsers about their online activity such as the sites they visit, how long they stay on them, and wether or not they click on ads and offers. These cookies are largely unobtrusive, sitting in the background and providing consumers with a better online experience while still obfuscating and anonymizing their personal identities (data is tracked by a device ID, not by your personal identity). But they've also become the poster child of a tech economy that seemingly collects massive amounts of information about us in ways most people don't understand.
As many see it, the problem with cookies is that they single out consumers with a unique identifier that helps advertisers target ads precisely to them and their interests. The issue being that there's a unique identifier just for you. It’s one-to-one.
Google's FLoC tosses these individual identifiers and replaces them with a system that puts users into groups, or cohorts, based on common interests. Browsers like Chrome will still track sites visited, the content engaged with there and other information, but that data will be kept on users' devices. Only the data about the larger groups will be shared with publishers for advertising.
On top of that, Google has announced they will try to avoid identifying categories such as race and sexuality. If a FLoC starts to represent one of these categories, the system is designed to flag and reconfigure it. Of course, users can still just opt out if they so please.
A lot of this is fine and good, there are a lot of reasons Google should not be targeting people by things such as race and identity, but still not everyone loves FLoC. The proposal has been criticized by privacy advocates, as well as many experts in the digital ad space. Given the way these two groups butt heads, It’s worth noting when they are aligned on an issue.
Electronic Frontier Foundation thinks the system could make existing problems with behavioral ads such as discrimination and predatory targeting even worse - or at very least it does nothing to solve them. The issue comes in with the way google lumps in individuals into behavioral cohorts. While this seemingly further anonymizes consumer data (Google is marketing it as such, of course) in reality it is little more than a fresh coat of marketing paint on a familiar system. Your identity is already anonymized through your device ID, and even after the transition to FLoCs Google will still track all the same behavioral and contextual data as cookies, just with an additional layer of imprecision for marketers who want to use it to tailor online experiences for consumers. It’s not hard to see how this is just a case of releasing the same old product, but somehow worse (crystal pepsi, anyone?).
Of course, Google will continue to use personal data about individuals to run ads on its own services. So when you log in to Google Search or YouTube, the company will know who you are, and can link your online behavior to your identity. This creates a new walled garden, a fine for me and not for thee system where Google is given free reign to use your personal information as they see fit while obfuscating that data for the rest of us. Many industry leaders are beginning to see this for what itis, Google simply trying to corner the market on advertising while eschewing any actual concerns about personal data and privacy.
While there are many concerns about the way personal data is used online, some a result of misconceptions and some very valid, there is one thing that is certain: Google’s FLoC’s are not the ideal solution they are being marketed as. They make tailoring your web experience more difficult while allowing more industry consolidation for one of the largest and most powerful corporations in the world. We’re not sure exactly what the ideal solution to this would be, but as it currently stands FLoCs are simply not a move in the right direction for consumers or online advertisers (aside from Google, of course).