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FLoC No More. Hello, Topics.

With the FLoC proposal out, advertisers are closely tracking the progress of Google’s third-party cookie alternate, Topics.

FLoC No More. Hello, Topics.

The latest update to Google’s Privacy Sandbox is here.

Google’s Privacy Sandbox updates have been the talk of the town in adland for the last couple of years. If you’ve been reading and watching along – at the edge of your seat like the rest of us – you know that the industry giant’s first proposal for the replacement of third-party cookies, FLoC, has gotten some serious well…. Flak.

Back in the summertime of 2021, there were whisperings that Google was considering a replacement solution for its new, privacy-centric ad targeting method. Flash forward to today, and Federated Learning of Cohorts is no more. It’s Topics. For now, at least. Because like FLoC, Topics will also go through rounds of trials, feedback, and iteration…and maybe, will get a little less flak.  

How Does Topics Work?

Similar to FLoC, Topics relies on a browser learning about your interests and advertisers gaining access to that information for relevant targeting; but there’s no more grouping users with likeminded behaviors and interests (i.e., cohorts).

Straight from The Keyword, Google’s Privacy Sandbox Product Director, Vinay Goel, explains, “when you (user) visit a participating site, Topics picks just three topics, one topic from each of the past three weeks, to share with the site and its advertising partners. Topics are kept for only three weeks and old topics are deleted, and they’re selected entirely on your device without involving any external servers, including Google servers.”

TL; DR: Topics is a form of contextual advertising…. not monumental stuff – but the approach could become a more sustainable, non-intrusive way to categorize audiences while also giving more control to the user.

To break it down some more, we’ve gathered initial thoughts and reactions from our global consultancy and martech leaders.

What’s Good About Topics?

The new proposal is an interesting and welcome step for two main reasons: Consistency and Privacy.

Consistency: The topics proposed are based on the IAB standard topics list (which excludes sensitive topics like gender and race) – this is key for planning consistency.

Privacy: Topics will only work on sites that use the Topics API, and sites can block topic calculation by inserting code that cancels the gathering of the topic. Additionally, users can see their topics, remove certain topics from their browser that they deem irrelevant, or block the gathering of topics altogether by disabling the feature.

Topics are based on browser history and redefined each week, which keeps the data relatively fresh and gives advertisers better insight into what the user cares about. Hopefully, this will finally be the end of seeing ads for stuff you already bought a few months ago…

For users, this is a step towards providing anonymity and timely ads, as well as fewer ads targeted based on things that are just way too personal. For advertisers, this finally presents some consistency on data classification – this is great news to build consistent measurement practices and addressability of audiences across platforms. For publishers, this means better control over what data gets passed from your sites back to Google. Even the ability to block it. That’s definitely welcomed.

What’s Still in Question?

Directionally, Topics seems like a positive evolution of FLoC, with room to improve over time. But the initially outlined framework leaves us with questions.

One, it’s not clear if Topics will become the alternative to Affinity or In Market targeting – which are both powered by a user’s search behavior and therefore based on very present intent And with Topics, Google is in control of the supply of inventory by limiting the addressable audience to only a user's top 5 topics. Currently, clarity is lacking as to how the top 5 (+ the 6th random Topic) are selected. If targeting gets reduced to 6 topics alone, this can lead to artificially low addressable inventory that inflates CPMs and CPCs in auctions.

The proposal also seems to heavily limit multi-faceted publishers such as news providers – what is the topic under which they fall?

Additionally, the taxonomy classification appears to only be based on domain names and not path-level URLs. This could present users being associated with a topic that they are not in the market for (for example, falsely signaling that you are in market to buy a car because you visited your car dealer's site to book an oil change with the service department.)

We expect that some of these answers will come to light over the next several months of Topics testing.

What It Means for Planning & Measurement

The implications for measurement are most often on our minds and the minds of clients, and we already know that it’s been changing. As Topics gets applied, advertisers will need insight to measure each topic’s contribution to a KPI. This means even greater importance is placed on having access to full, cross-functional activation data. With privacy still at the core, the more we can learn about customers, how they arrive to brand sites, what they search for, what they buy, and their interests, all under a standardized taxonomy like the IAB’s topics, the easier it will be to translate planning into activation accurately. And also measure contribution to performance.

More than anything, Topics is a reinforcement for measurement solutions that can address and measure context at scale across activation platforms.

Looking Ahead

In this industry, we know that the only constant is change, and this update from Google continues to prove the rule. It will no doubt polarize the market like every move by Google since the deprecation of third-party cookies was announced.

The good news is that the market should interpret this shift as a chance for meaningful parity. The selection of topics from the IAB Audience Taxonomy should give confidence to all parties (brands, publishers, agencies, and advertising technology vendors) that we have a consistent way to translate user behavior from the browser to media activation plans.

With a level playing field like this, talent and skill are given a chance to come to the fore once again. This is a real opportunity for the advertising craft to shine in all parts of the media ecosystem.