It is no secret that 3rd party cookies are in the process of being phased out. At a certain point in time there was a mainstream exposure to the world of ecommerce, in which concerns for privacy began to ramp up. 86% of people in a study on the matter stated they felt growing concerns for their data privacy, and a further 78% expressed concerns for the amount of data that is collected through 3rd party cookies.

Google’s Solution

As Google controls more than 92% of the search engine market share worldwide, the majority of responsibility to address these concerns fell into their lap (Bing controls 2.5%, and Yahoo just 1.5%). In light of this increasing pressure, Google has announced their plan to remove 3rd party cookies from their browser entirely by 2023.

Although Google’s cut and dry approach has proven popular among its users, the “cookieless future” has become a digital marketer’s nightmare. In fear of losing a massive amount of historical user data, various assumptions on revenue impact have been made. But the truth is, “the direct effect on ad revenue is unclear; one study estimated that ad revenue will decrease by 50-60%, while another found that 3rd party cookies only increase ad revenue by 4%,” according to Mckinsey. Until this data is officially scrapped, this question cannot accurately be answered.

A Machine Learning Strategy

With that said, businesses who rely on 3rd party cookies for their advertising campaigns should not lose hope. Google is not abandoning those who are dependent on their data, but, as their director of engineering explained, “evolving to create the web ecosystem needed to meet these increasing demands.”

All things considered, it should be known that Google does not benefit financially from cutting off their most valuable user data. To entertain both sides of the spectrum, Google has been working on an alternative strategy: machine learning.

The initial concern of 3rd party data was derived around privacy, and personal information in the hands of marketers. People became concerned with the amount of data Google owns on its users. So, Google is working to wash their hands of the situation and leave the rest to the machine.

How a Machine Learning Approach Works

Chrome browsers will use AI and algorithms to build interest-based cohorts. This is to be an automated process that will eliminate the ability to build granular audience segments with personal data. The Federated Learning of Cohorts or ‘FLoC’ proposal states, “…the new tracker will look at the URLs of sites that the user visited and the content of those pages, among other factors. Each group or cohort will receive a label or a FLoC ID, which will capture information about users’ habits and interests.”

FLoC audience groups are generated by ‘anonymous user behavior’. No longer will a marketer sit behind a computer compiling personal information of users, but the tech itself will take key behavioral elements and create cohorts. An advanced AI will be able to use non-invasive user data in ways beyond human capability. As opposed to the past, where Google owned a surplus of personal information, there will be no ‘owner’ of this data. FLoC will not share this data with anybody, not even Google.

Looking Ahead

We will not know the true performance of this integration until it is in action. Google wrote in their blog, “Our test of FLoC to reach in-market affinity and affinity Google Audiences show that advertisers can expect to see at least 95% of conversions per dollar spent when compared to cookie-based advertising.”

In terms of the future, the use of machine learning could be something that surpasses the performance of 3rd party data. As volume is key to strengthening any AI, the more users that populate FLoC, the smarter the AI can become. With time, we could see something far more advanced than anticipated.

It is important to understand that this is not an optional transition. 3rd party cookies will be a thing of the past in the near future. So, for those who rely on these cookies, the best thing to do is learn. If we see success in machine learning through Google Analytics, everyone wins.