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Earlier this month Google announced discontinuing third-party cookies on Chrome. Google’s alternative for cookies is a method called Federated Learning of Cohorts (FLoC), which will be used to collect users’ data, based on their browser history, and gather them in cohorts of users with similar interests and characteristics. For now, remarketing using FLoC will be available only on Chrome.

Browsers such as Firefox and Safari have already stopped supporting third-party cookies, following concerns of privacy-conscious internet users. But it took some time for Google to join in. Since Google also holds an online advertising empire (in addition to the browser Chrome), this policy change raises concern regarding the future of online advertising.

What is FLoC exactly? And how it will affect online advertising and users’ privacy?

FLoC is one of the ideas suggested as part of Google’s Privacy Sandbox initiative, which was created to offer both privacy and advertisers’ friendly alternative to third-party cookies. In short, FloC offers targeting of groups of users who share similar interests.

The algorithm used to build these cohorts would collect data about the users’ visited URLs, the pages’ contents, and other factors. This data will be shared for targeting and advertising purposes.

The main difference is that the individual users’ data, including their browsers’ history, will be kept only locally, and the browser will reveal only the identifier of the cohort. Each cohort would consist of thousands of users – big enough to hide individual users, yet still effective for remarketing campaigns. The users will be added to cohorts on a weekly basis, according to their recent browsing history.

Google will start testing remarketing campaigns using FLoC on the second quarter of 2021. Based on Google data from earlier tests, advertisers can expect 95% conversion rate compared to cookies-based advertising.

FLoC & Online Privacy

Theoretically, grouping users into cohorts should be able to protect users’ privacy. But, it doesn’t mean that it will be impossible for third-parties to pull a needle out of the haystack. Potentially, by using browser fingerprinting, i.e. identifying users’ based on their browsers’ settings. Google has already offered several solutions for this threat, but none of them is ready to be implemented yet.

FLoC and Digital Advertising

According to Google, this new privacy policy won’t have a significant impact on online advertisers – they can still target users, just cohort of users instead of individual ones.

But, advertisers will have to adjust to the cookie-less future and rely more on first-party data. For example, by collecting email addresses in more traditional ways (newsletters, loyalty clubs, discounts, etc.) For now, this data can still be used to remarketing and lookalike campaigns in other online advertising platforms.