Google announcement that its Privacy Sandbox will land on Android marks the next step toward privacy-centric advertising for a mobile landscape that's already been altered by Apple's transparency framework. While Google's move may not cause as big of an impact as Apple's, marketers and social media platforms still need to prepare for big changes.

Privacy Sandbox is intended to limit the sharing of user data with third parties and do away with cross-app identifiers, including Google's own advertising ID that helps track and measure mobile campaigns. Developed last year, advertising ID removed identifiers when the user opted out of personalized advertising. Google will continue to support its existing advertising ID service for at least two more years to provide ample time for marketers to adjust to the significant change.

The announcement on Feb. 16 was not surprising as it builds on Google's 2020 pledge to phase out cookies on its Chrome browser, according to Eric Schmitt, senior director analyst at Gartner.

"Google's deprecation of device IDs is another step in the journey toward less targeted, less precise advertising. They telegraphed this move middle of last year, and now they're essentially following in Apple's footsteps a little more slowly [and] in a more watered-down form from a privacy perspective, but it's the same overall theme that we've seen," Schmitt said.

Google's decision to tweak its app tracking across Android phones comes as tech companies in general are reckoning with a heightened call for user privacy. Previously, Google announced a phaseout to third-party cookies and that it'd replace them with Federated Learning of Cohorts (FLoCs). FLoCs was said to be 95% as effective as third-party cookies, but Google quickly abandoned that initiative and replaced it with Topics to target users based on their interests. Still in testing, Topics takes one topic a user has shown interest in over the past three weeks — based on browsing history — and shares that information with advertisers, who can then serve users with content they hope will resonate. Topics data are kept for three weeks before being deleted, preventing massive stores of consumer data, but tihs tmakes microtargeting nearly impossible as advertisers are given only a broad idea of a consumer's interest, not specific products previously viewed.

Now, the tech giant's latest initiative follows similar ones by rival Apple, which in April 2021 made its cross-app tracking opt-in by default. Just 16% of users agreed to have their activity tracked, according to Lotame data, reflecting consumers' hesitancy to allow businesses to keep tabs on them online.

"The Android ecosystem will face the very same challenges as the web ecosystem has been preparing for in the past few years... However, the Privacy Sandbox is now far more advanced than it was when Chrome first announced the deprecation of third-party cookies," Łukasz Włodarczyk, vice president of programmatic ecosystem growth and innovation at RTB House, said in emailed comments. "It is also worth noting that Google acknowledges the need to address in-app advertising use cases to support advertiser and publisher businesses. In contrast, Apple significantly limited the availability of identifiers used for advertising without proposing an alternative."

As third-party tracking slowly phases out, brands' reliance on first-party data has ballooned. Some retail giants like Walmart, Target and Home Depot have invested in retail media networks as a cookie workaround to sell and place ads, while other brands are shifting focus to email. However, Apple in 2021 tightened security around open rate information, further impairing marketer's ability to collect valuable data that informs ad targeting.

The changes to privacy have majorly hit companies that rely on selling third-party information to advertisers, such as Meta (formally Facebook). After Apple announced its changes last year, Meta's market value dropped $300 billion. But while much of the focus is on Meta, as it's one of the world's largest ad platforms, these changes will also significantly ding smaller apps like Twitter and TikTok.

"Everyone is taking their shots at Meta right now, but these types of changes may catch smaller social platforms like TikTok, Snap and Pinterest in the crossfire," Vic Drabicky, CEO of January Digital, said in emailed comments. "We see very positive recent results from TikTok, Pinterest and Snap, but since they lack the volume of Meta and the mobile [operating system] advantage of Apple and Google, they will need to develop tracking solutions for the next generation."

The recent developments by both Google and Apple suggest device IDs likely don't have a future. To adjust, brands will need to be strategic and open to experimenting with new ways to target ads. They should focus on ramping up earned and own programs as well as contextual advertising, Gartner's Schmitt says, while "fishing where the fish are, making sure that all of your non-paid media is doing everything it can."

As brands continue adjusting to these privacy-related changes, it's a slow wind down that allows them time to explore new techniques.

"Google has pushed out timelines before," Schmitt said. "We're talking two years here, and the devil is in the details. I expect it's going to be business as usual for a while."

Source: Marketing Dive

Powered by NewsAPI.org