Google is overhauling its plans for targeted online advertising after pushback from privacy advocates, aiming to give marketers less-granular information about web users than under the tech giant’s initial proposal.
The Alphabet Inc. GOOG -2.79% unit said Tuesday that the new system it is proposing, Topics, would allow web advertisers to target broad categories of users—those interested in “fitness” or “travel,” for example—instead of grouping them into thousands of cohorts with similar browsing histories.
The company’s Chrome browser will distill a shortlist of interests based on a user’s recent browsing history, the company said. Users will be able to see and delete interests the browser assigns to them, or turn the system off entirely.
The proposal is an outgrowth of Google’s plan to phase out a user-tracking technology called third-party cookies in 2023. Millions of marketers currently rely on third-party cookies, unique snippets of code to identify individual browsers, to target online advertisements based on users’ specific browsing histories. The practice has led to complaints from activists and privacy regulators in Europe and the U.S.
Google’s plan to develop an alternative to cookies has been closely watched because of the search giant’s tremendous power over the digital-ad economy. Its Chrome browser accounts for about two-thirds of the global market, while its ad tech business operates the dominant tool at every link in the chain between online publishers and advertisers, giving it unrivaled influence over how revenue is generated from digital content.
Regulators, rivals and privacy advocates have been evaluating and critiquing Google’s proposals to replace cookies. Its first plan for targeted ads, called federated learning of cohorts, or Floc, aimed to allow advertisers to target ads at tens of thousands of different “cohorts,” each grouped together because its members had a very similar browsing history. The system assigned each cohort an identification number, but left it to advertisers to figure out the interests of each grouping.
The plan met considerable pushback from the ad industry, which said it was less effective than using cookies to track users’ browsing histories to infer their interests and habits. Some publishers and advertising-technology companies argued that the plan would hurt the broader online-advertising ecosystem, while leaving Google’s in-house ad business relatively unscathed.
Privacy advocates, for their part, worried that even though Floc data would lump people into groups, ad companies would eventually be able to identify individuals, and sensitive information about them, by collecting enough Floc data. Two rival web browsers, Mozilla’s Firefox and Brave, said they wouldn’t support it because of privacy concerns.
Google’s Cookie Plan
Those concerns eventually led Google to push back its overall time frame to remove support for third-party cookies from Chrome to revise its approach.
Google Senior Product Director Ben Galbraith said privacy concerns were the primary driver of the changes Google made for Topics. Concerns from companies in the online-ad ecosystem would be addressed over time, he said.
“These were important privacy protections that needed to be added,” Mr. Galbraith said. Google will “continue our dialogue with the ecosystem” to “understand how well it works for advertising use cases,” he said.
Topics will categorize users in much broader interest categories than Floc did. According to a technical document proposing the plan, users’ Chrome browsers will boil down their internet browsing history over the prior three weeks into five interests a week out of roughly 350 broad topics like “auto & vehicles” or “rock music.” The browser will then share up to three of those interests at a time to participating websites and third parties that had previously seen that browser on that kind of site. By contrast, Floc’s early trials grouped users into much narrower groups, and shared browsers’ Floc identifiers with any participating website.
Google says the changes should make it harder to use the new system to infer users’ identities or potentially sensitive personal characteristics, such as race or sexual orientation. The company also said that the new system will only take into account users’ activity on participating sites, a major change from the prior plan, which would have included most websites unless they opted out.
Some executives in the advertising technology business said the new Topics technology as described would rob marketers of much of the ad-targeting precision they have enjoyed with cookies. “Even the difference between ‘Sports’ and ‘Hockey’ can be the difference between worthless and worthwhile for the digital marketer,” said Mike Woosley, chief operating officer at Lotame Solutions Inc., a data-management platform.
Regulators have been looking closely at the Google plan to remove cookies. In the U.K., Google settled an antitrust investigation into the matter by pledging to review any changes with the country’s antitrust regulator, which could potentially impose changes to its plan. The European Union’s top antitrust agency is separately investigating Google’s plans for Chrome to stop supporting third-party cookies as part of a wide-ranging investigation of Google’s prominent role in online advertising technology.
In Europe, a group of German publishers on Monday filed a new EU antitrust complaint about Google’s retirement of cookies, saying that Google is “abusing its market power under the guise of data protection” by making changes to hurt competitors and spare itself.
Google said, in response to the complaint, that it has proposed “new digital advertising tools to protect privacy and prevent covert tracking, while supporting a thriving ad-funded open web.”
Write to Sam Schechner at sam.schechner@wsj.com, Patience Haggin at patience.haggin@wsj.com and Tripp Mickle at Tripp.Mickle@wsj.com
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