Google FLoC Driving Marketers to Smart Audience Definition and First-Party Data
By Praveen Balla
Vice President, Production, True Influence
Whenever there’s big news in digital advertising, such as Google’s FLoC, the trade press focuses largely on the impact to transactional B2C marketing. That’s certainly been the case with Google’s headline-grabbing Federated Learning of Cohorts (FLoC) initiative, which the platform giant proposes as an alternative to third-party cookies for programmatic ad targeting.
But B2B sales and marketing live on the same technical ecosystem that has evolved to support B2C, and that is definitely the case with programmatic. Precisely targeted display runs have become an essential component of Account-based Marketing (ABM) and other B2B revenue strategies, both for initial engagement and to support complex, integrated campaigns that build long-term relationships.
And like it or not, the ability to target a specific individual via third-party cookies is going away. Google’s so-called “privacy sandbox” is only one initiative to anonymize behavioral tracking in the name of privacy. The initiative is not without its critics (including our own leadership team here at True Influence), but there’s little doubt FLoC is a harbinger of change that has been a long time coming.
In this post, I’ll look at the immediate impact that FLoC and related technologies are likely to have on B2B marketing and sales, at both the early engagement stage and after a prospect converts to a first-party relationship with your company. Some of these changes will be nominal, particularly to existing Google advertising customers, while others may prompt B2B marketers to invest in augmented contact data and analytics.
What is FLoC, anyway?
Before I go any further, let’s take a quick (and admittedly simplified) look at what FLoC and the privacy sandbox actually do, and how that differs from third-party cookies.
FLoC is a browser-based technology that anonymizes a user’s identity and then analyzes their behavior and demographic information to group them in “cohorts” of similar individuals for targeting. Google says these cohorts can be as small as 1,000 or so people, a pretty narrow sampling, particularly in B2C. And cohorts can be re-built every week, based on new behaviors, to enable retargeting.
However, Google has vowed to not allow targeting to a specific individual, a common practice with third-party cookies. It also says it will not provide data to identity triangulation platforms, which infer a unique user’s identity based on a wide matrix of data (we employ such technology here at True Influence). Google does not plan to label its cohorts with market-friendly terminology, presumably to deny potential competitors a glimpse of how it is segmenting the market.
So, basically, Google is walling off a massive chunk of behavioral tracking and targeting data for its own advertising business. Chrome, which will soon stop support for third-party cookies, commands about 65 percent of the global browser market, so this is a huge percentage of online behavior that advertisers can leverage only by partnering with Google.
So, what’s going to change?
In the near term, not a lot will change, at least if you are a Google ad customer. Early tests show conversions on FLoC campaigns are running at about 95 percent of current rates.
Remember, about 80 percent of Google’s $182.5 billion in 2020 revenue came from advertising. Google is, by any measure, an advertising company, and it’s not interested in upsetting that monumentally profitable business. The “privacy sandbox” clearly is meant to enforce Google’s leadership in the display advertising market, with a clear slant toward B2C. Google is still going to collect consent from users for personalized marketing on Android devices, in Gmail, in Maps – across the massive reach of its platform.
Previously, competing DSPs could not enter Google’s data environment, but they could see into it by capturing much of the same behavioral data via cookies. Our B2B programmatic display customers here at True Influence understand that we use AI and an extensive network of first- and third-party data – including some from cookies – to build unique identifiers based on business contact data for ad targeting both at the account and personal level.
We are committed to this approach, and other DSPs are working to create identification technologies to compete with FLoC, along with other walled ad targeting systems that many observers expect are coming from the other big platform vendors. But there’s no doubt that FLoC will lead some changes in the way B2B employs programmatic display.