Explained | How will Google serve ads when cookies are phased out?

Google plans to not rely on individual tracking using third-party cookies but on a new system called Federated Learning of Cohorts

Google in January 2021 announced that they would phase out support for third-party cookies on Chrome browser, which is the world's most popular internet browser. The tech giant also said that it will not create new technology that will enable tracking of users on the browser once cookies are phased out.

The shift in the company's approach shows that the giant wants to show that its focus on privacy.

A significant chunk of Alphabet's revenue comes from digital advertising for which cookies and user tracking are key, so why is Google phasing out support for cookies and how will the Palo Alto company serve ads once cookies are dead?

Also Read | Google vows to stop tracking individual online activity for ads

Two other popular browsers that focus more on privacy, Mozilla Firefox and Apple's Safari, already block third-party cookies. When Google phases them out on Chrome, it will become difficult for targeted ads to be pushed to you, which may limit the effectiveness of ads and affect pricing.

David Temkin, Director of Product Management, Ads Privacy and Trust said in a blog post that Google "will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products."

Temkin added in this blog post that several users are now convinced they are being tracked all the time on the web and are concerned bout their privacy and hence an alternative system of tracking will also not “meet rising consumer expectations for privacy.”

Third-party cookies help websites and advertisers track users and their behaviours, on their website and across the web. For example, if you view a product on a website, and later find advertisements for the product on social media, these third party cookies are the reason behind it, as they track your behaviour.

Also Read | Judge in Google case 'disturbed' that even ‘incognito’ users are tracked

So, how will Google serve effective ads?

Google says that their web products in the future will not rely on individual tracking, but “powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers." Temkin in his post said that advertisers will not see a dip in their success rates under the new system.

The new system that the tech giant proposes in called Federated Learning of Cohorts (FLoC). FLoC will track groups of users that have similar interests and not individuals. A large number of users will be segmented into a cohort usually consisting of thousands of users. The segmentation of users will be derived from the user's browsing history. A user can be shifted from one cohort to another over time as their behaviour changes. The browser uses machine learning algorithms to develop a cohort-based on the sites that an individual visits.

Google says that they will make FLoC-based cohorts available for public testing through origin trials in March and they expect to begin testing FLoC-based cohorts with advertisers in Google Ads in the second quarter of 2021.

Google's blog post says, "This points to a future where there is no need to sacrifice relevant advertising and monetisation in order to deliver a private and secure experience."