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Google is replacing Third-Party Cookies with Topics. What advertising industry should be prepared for?

Recently Google announced a new system to replace the 3d-party cookies – Topics API. It is said that it will help advertisers target ads using an interest-based tracking system based on user activity in the browser. In the article, we talk about how the Topics API works, what Google is criticized for, and measuring the advertising performance after the introduction of the new system.

Topics is replacing Google's previously announced system called FLoC (or Federated Learning of Cohorts ) following criticism from privacy advocates who feared the new ad-targeting solution would make it easier to collect user information. 

How does it work


The Topics API will allow advertisers to run online ads targeting specific topics of user’s interests such as "Fitness" or "Travel". When a user visits a website, the browser infers three topics, each reflecting what the user has been interested in over the past three weeks. Thus websites and their ad partners won’t know anything about a user except those three topics of interest. Google highlights that topics will be stored by the browser for three weeks and then deleted. 

Resource: Google

For now, Google has picked 350 topics however as experimentation progresses this list may be expanded. According to Google representatives, topics are "carefully chosen" and will not include potentially sensitive categories like gender or race.

What about data privacy 

Topics is being developed as part of a larger Google initiative called the Privacy Sandbox that includes a series of proposals created in conjunction with the advertising industry to satisfy cross-site use cases without third-party cookies or other tracking mechanisms.

Topics data will be stored on individual devices without the involvement of external servers, including Google. Unlike 3d party cookies that allow companies to use tracking pixels to track user activities on many websites as well as create profiles with no chance for users to control this process. The Topics API will also complicate the process of matching data with real users due to the frequent change of topics.

After the implementation of the new system, Google Chrome users will be able to see the topics generated by their browser, delete them, and completely disable the interest tracking feature.
Resource: Google

What happened in the past


In early 2021, Google announced that it had finally come up with a working replacement for 3d party cookies called FLoC (or Federated Learning of Cohorts) and that it would take them several months to collect feedback from the advertising industry. 

The working principle of FLoC was based on user behavior analysis using machine learning algorithms. According to Google, the technology was not designed to identify a particular person, but to create certain groups or cohorts of anonymous users with similar interests and qualities. The browsing history of a person would be kept secret and not shared with sites and their advertising partners, but the browser itself would view the history of visited sites, analyze it and transfer the user to one of the cohorts (FLoC ID). It was assumed that advertisers would be given data not about a specific user, but about the audience itself which was supposed to ensure the confidentiality of information.


Resource: web.dev

Later Vinay Goel, Principal Privacy Engineer, told the Financial Times that Google decided to abandon FloC after “feedback” from publishers and others in the industry. He claimed that a replacement method for tracking users’ interests, known as Topics, would meet the concerns, without causing further delays.

And in the same 2021, Google said that it would take more time to develop a replacement for cookies. The company also announced that 3d party cookies will be officially phased out by the end of 2023, instead of the previously announced start of 2022.

Criticism of Google


Right after the announcement of FLoC Google was criticized by both users and representatives of the advertising industry. One of the concerns expressed by Google’s opponents was that the FLoC ID created to target users could become an additional way to track specific users. In fact, they feared that FLoC ID could help and strengthen an already powerful web user tracking system.

Another criticism that has actually been in the air for many years was that the introduction of FLoC, and even more so Google's announcement of abandonment of any other user tracking systems, is just another way to consolidate the company's monopolistic position in the market. According to opponents of FLoC, it would be Google that would benefit most from replacing cookies with the new system.

The official European authorities are also concerned about the protection of personal data and the fight against the monopoly of Internet giants (primarily Google). Recently the Austrian data regulator, Datenschutzbehörde, said Google Analytics violated the European Union’s General Data Protection Regulation (GDPR) because the data being sent to the US wasn’t being properly protected against potential access by the US intelligence agencies.

It is important to highlight that this kind of decision potentially can have an impact not only on Google but also on other major American internet companies (Meta, Amazon, etc). And it is likely that the moment is not far off when other European countries that have signed up to the GDPR law will make the same decision.

How will Topics change ad performance


According to Statista, as of December 2021, the mobile version of Google Chrome accounted for 64% of the global mobile browser market and the web version of Google Chrome accounted for 67% of the global web browser market. The share of Firefox and Internet Explorer has declined significantly in recent years due to the expansion of Chrome's influence and the entry of new players into the market. Such numbers make it clear that any transformation of Google, and even more so any attempt to monopolize them, will greatly affect the industry.

Источник: Backlinko

It's certainly too early to tell if Topics is truly the future of targeting in the world's most popular web browser, but there's a big risk that in a cookies-free world, marketers won't be able to offer personalized content and effectively measure the results of digital campaigns. Instead, professionals will have to rely on first-party data and put in the extra effort to analyze the available information and get to know their users. 

On the other hand, Topics doesn't get as much criticism (although the issue of monopoly and abuse of power remains open) that FLoC received almost a year ago. The new system recently announced by Google can be a good solution for obtaining key information about consumer behavior, as well as become an important part of a marketing strategy to attract a large audience.

Instead of a conclusion


For now, the only conclusion that can be made is that there are still many aspects of Topics that Google needs to address or at least smoothen before talking about any widespread introduction. In the meantime, advertisers should remember to rely on a range of solutions at once to combine and amplify their targeting strategies.


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