Beware the FLoC

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This Week
January 26, 2021
Beware the FLoC
A New Era Is Upon Us
Around the Water Cooler
Beware the FLOC
This is one of those weeks when everyone is talking about the same thing, which happens to be Google's Privacy Sandbox. In the latest turn of events related to the replacement of the third-party cookie in Chrome, Google announced plans to operationalize TURTLEDOVE with FLEDGE (First Locally Executed Decision over Groups Experiment). And Simon J. Harris, DPG Media's Director of Trade Desk, shared a nice summarized explanation of what that all means over on Twitter.

Of most interest in the proposal for FLEDGE is that it talks about a “trusted server” model “specifically designed to store information about a campaign’s bids and budgets." This is more in line with Criteo's SPARROW proposal that called for including a gatekeeper, as opposed to the auction logic all taking place within Chrome or any browser built on Chromium. FLEDGE also borrows from Magnite's PARRROT, which gives auction decisioning back the publisher and/or the publisher’s systems (ad servers, SSPs). So maybe we're talking about fledgling sparrows and parrots that are just learning to fly. Huh? No, wait.

As interesting as it is though, FLEDGE wasn't the biggest news to come out of the Google Privacy Sandbox as of late. The thing that's rightfully ruffling everyone's feathers is that Google plans to replace third-party cookies with FLoC (Federated Learning of Cohorts) and it will be available for public testing, as soon as March with the release of Chrome 89. They also claim that in their own testing they found that in targeting users based on interest groups that targeting was "nearly as effective as cookie-based approaches."

On the surface, none of this really sounds all that alarming, but as with all PR you've got to learn to read between the lines.
Why This Matters
Boy, oh, boy did all of this news get ad tech Twitter's panties all in a bunch. So we'll leave it up to them to tell you all why.
A New Era Is Upon Us
Bob Dylan said it best, "Times, they are a-changin'." And boy, are they a-changing. Third-party cookies are phasing out, retailers are launching media networks, and stricter policies around consumer privacy protections seem to be on the horizon. Amongst all the change, however, is a single unifying thread: First-party data.

Publishers have a wealth of first-party data, and through all this change, it will be the most critical and stable component to publisher monetization strategies. To activate their first-party data and provide advertisers with personalized, addressable inventory, publishers don't have to look beyond their email newsletters.
Why This Matters
By placing ad slots into email newsletters, publishers unlock a new inventory source that is an inherently logged-in and cookieless environment. Because newsletters are opt-in, typically according to reader interests, they provide a layer of relevancy and personalization unique to email.

With email newsletters, publishers can activate their first-party data, drive incremental revenue, and increase awareness of their products and offerings by advertising in their newsletters or reaching similar audiences on other publisher newsletters.

As the topic of privacy protections heats up, email newsletters enable publishers and advertisers to continue reaching audiences safely via the hashed email. By leveraging first-party data and email newsletters, publishers and advertisers alike can support a more secure digital ecosystem while delivering a positive consumer experience.
Around the Water Cooler
Here's the news we've been reading...

Google faces two fresh antitrust lawsuits in the EU over its data gathering and advertising practices (BusinessInsider)

Google, Facebook and other online advertising giants will see blowout Q4, analysts predict (CNBC)

Taboola signs deal to go public on NYSE via a SPAC at $2.5-3 billion valuation (CTech)

NBCU, Twitter expand advertising, content deal globally (MediaPost)
Sweet Tweet
A byproduct to working in ad tech is the very common words I type into iMessage like “.com” or “sex” autocorrect to “CPM” and “AdX” respectively.
Worth a Listen
ExchangeWire on WhatsApp, ATT's Impact on Facebook, and the US vs Australia's Media Code
WhatsApp has extended the deadline for accepting its new terms and conditions. The move follows a mass exodus of users who balked at the company’s demand that they allow their data to be shared with parent-platform Facebook.

Sticking with Facebook, the social media behemoth could stand to lose 7% of its revenue from Apple’s implementation of the App Tracking Transparency (ATT) privacy framework on iOS.

The US has waded into the ongoing Australia vs big tech saga, criticizing the Australian government’s proposed News Media Bargaining Code for being “fundamentally unbalanced”. The Code, which was presented to the Australian parliament in December, has long been a thorn in the side for big digital platforms Facebook and Google, who will be forced to pay media organizations in order to re-publish their content if the new legislation is passed.

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