Google's new substitute for cookies: What do Topics spell for the industry?

Google has unveiled Topics, a new Privacy Sandbox proposal that is touted as the solution to the deprecation of third-party cookies. Topics replaces Google's earlier Federated Learning of Cohorts (FLoC) proposal and enables browsers to determine a handful of topics, such as "fitness" or "travel and transportation", that represent consumers' top interests for that week based on their browsing.

Topics are kept for only three weeks and old topics are deleted. They are also selected entirely on consumers' devices without involving any external servers, including Google servers. When consumers visit participating sites, Topics will pick out three topics, one from each of the past three weeks, to share with the site and its ad partners.

According to Google, Topics enables browsers to give meaningful transparency and control over this data, and the tech giant is also building user controls in Chrome to let users see the topics, remove any they dislike or disable the feature completely.

Topics are also touted by Google to be "thoughtfully curated to exclude sensitive categories, such as gender or race". "Because Topics is powered by the browser, it provides users with a more recognisable way to see and control how their data is shared, compared to tracking mechanisms such as third-party cookies," Google said. By providing websites with your topics of interest, online businesses have an option that doesn’t involve covert tracking techniques, such as browser fingerprinting, in order to continue serving relevant ads.

Google will soon allow the ad industry and website developers to test out Topics by rolling out a developer trial that includes user controls. Early last year, Google claimed that its FLoC proposal “can provide an effective replacement signal for third-party cookies”. Compared to Topics, the FLoC API relies on a cohort assignment algorithm, meaning a function that allocates a cohort ID to a user based on their browsing history.

To ensure privacy, Chrome requires this cohort ID to be shared by a certain amount of distinct users. The more users share a cohort ID, the harder it is to use this signal to derive individual user's behaviour from across the web. While this benefits privacy, the trade-off is that a large cohort is more likely to have a diverse set of users, Google said. Thus, making it harder for advertisers to use this information for fine-grained ads personalisation purposes.

Forrester's VP, principal analyst, Joanna O'Connell, said in a blog post that while FLoC used machine learning and AI to construct cohorts, Topics is "simpler and inherently more transparent". With users only sharing three Topics with a website and having control or what they want to share with websites, O'Connell said this reduces the risk of sites using FLoC IDs as a device identifier.

Google first announced in 2020 that it will be phasing out third-party cookies, taking a page out of Safari's and Firefox's books. A few months later, the tech giant delayed the deprecation of third-party cookies until mid-2023 as it believes "more time is needed across the ecosystem to get this right". Meanwhile, the ad industry has either launched or thrown their weight behind new ID solutions such as The Trade Desk's Unified ID 2.0 and the Yahoo ConnectID.

Industry players share what Topics mean for the ad industry and the steps advertisers can take moving forward.

Joanna O'Connell, VP, principal analyst, Forrester

Advertisers should continue to prepare for data deprecation as the forces underpinning it continue to roll full steam ahead. From a strategic standpoint, this means shoring up your zero- and first-party data strategies; interrogating your consumer engagements to ensure they deliver meaningful value; and rethinking some traditional assumptions about the necessity of perfect “1:1 communication.”

Tactically, it means auditing your current approaches to audience development, ad targeting, ad personalisation, and measurement and building out a testing roadmap for alternative solutions to cookie-based ones. To that end, think of Topics as just another tool in the toolbox of options — one controlled by Google, yes, but that’s certainly not a departure from FLoC.

Laura Quigley, SVP APAC, Integral Ad Science

Technicalities aside, the core idea seems to be to give advertisers privacy-friendly, suitable options to serve contextually relevant ads instead of resorting to more covert ad-tracking technologies. Marketers have shifted attention from audience data to contextual targeting and strengthening their first-party data. That means more brands will seek to run their campaigns in contextually relevant environments that align with their ad messaging.

After all, research shows that contextually relevant ads drive greater receptivity, favorability, and recall. Make no mistake, the shift to contextual was well underway before the announcement of FLoC or Topics API, but this will likely accelerate and highlight the relevance of context and relevant placements of ads. It’s still early days for Topics, and its success rests on ecosystem collaboration, the ability to balance privacy with insights that help brands discover key audiences. The post-cookie world will heavily value consumer privacy. 

Mike Woosley, COO, Lotame

Google describes Topics as a browser-side utility that will assign a user up to several from a “handful” of interest areas that will persist for three weeks. This type of capability hearkens to contextual advertising techniques circa 2005. Unfortunately, the technology as described would be grossly insufficient for the needs of the vast majority of modern marketers who require detailed personas to determine marketing voice, segment customers, measure brand affinity, and tune marketing for complex products such as insurance with very detailed segmentations.

Even the difference between "sports" and "hockey" can be the difference between worthless and worthwhile for the digital marketer. The latter category might just be 3% to 4% of the traffic in the former. Google could never survive relying on such basic tools for it’s vast empire of authenticated traffic, and to bequeath it to the rest of the world borders on insulting for most of the digital media industry.

Mitch Waters, SVP of Southeast Asia, India, Australia and New Zealand, The Trade Desk

Here in Asia, we spend way more of our time on the open internet binge-watching OTT video content, engaging on mobile apps and audio streaming. Google’s latest proposal on Topics is limited to one channel which is the Chrome browser. Topics cannot be applied to the multiple devices which most consumers use to access their favourite content on the open internet.

This means that marketers are restricted to basic targeting approaches, which limits their full potential. Users, in turn, also receive a suboptimal experience online. Additional iteration will be required to address key advertising use cases and adequately answer the question of funding great content on the Internet.

Photo courtesy: 123RF

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