Out with FLoC, in with Topics API

Goodbye FLoC

The pending deprecation of third-party cookies has been a hot topic for the last 12+ months. Data privacy-related legislation – think GDPR to CCPA and more – has continually evolved, keeping brands and consumers alike on their toes. So have the technology powering platforms, publishers, and search engines, many of which have announced their own “solutions” to successful marketing in a privacy-focused world.

Google’s initial solution? Federated Learning of Cohorts or “FLoC.” Defined, controlled, and managed by Google for everyone’s use, these cohorts were composed of up to 1,000 users and would serve as an anonymized representation of a small group’s online behavior. Individual users were assigned to a single FLoC, which Google created with the Chrome browser based on commonalities between browser usage patterns. But FLoC was fraught from the get-go. Google ran into challenges, not just with user adoption (FLoC was only compatible with Google Chrome), but also spurring concerns around regulatory compliance and pushback from the industry at large.

And as of January 25, 2022, Google announced it will officially replace FLoC with a new interest-based targeting proposal called “Topics API.”

All about Topics API

At the most basic level, Topics API will select topics of interest based on the user’s browsing history without involving external servers and share those topics with participating websites (Search Engine Land ). There are currently about 350 existing topics – although we expect more will be added as this rolls out – and a user’s top 5 topics will be calculated each week by Google Chrome. Advertisers will then be able be able to see 3 of those topics. However, Google Chrome is also building functionality that will give individual users visibility their topics assigned by the browser as well as the ones advertisers can see.

Topics data will likely be a moving target to ensure some level of privacy is maintained by reducing the ability to ‘reidentify’ a user based on their assigned topics. And the data collection process gets complicated fast:

1. Topics will be formed based on weekly browser history, but those topics will only be kept for 3 weeks.
2. Five topics will be assigned to a user based on their browser history , with a sixth randomly assigned.
3. Of the topics assigned, only 3 will be randomly provided when a user visits a site…
4. Which the website can then share with its advertising partners to serve ads.

All this means that even if the data is captured, it’s difficult to know what topics a user is assigned to since they are theoretically always moving. However, don’t forget: topics will be just one data signal used to determine what ads to serve to your target audience. Additional contextual data can and should always be layered on to serve more targeted ads.

Data collection aside, here’s a punch list of the things we find most interesting about this new solution:

1. Google is still leveraging some of the technology behind FLoC, but is making Topics a more relatable solution by removing the “blackbox,” or proprietary feel, of FLoC while still addressing privacy concerns.
2. API solutions appear to be the go-to solution. Like Facebook’s conversion API, Google is leveraging an API to address the loss of third-party cookies. APIs provide a standardized and ‘safe’ way to transfer data, and in this case, also provide a human, readable result – this is something FLoC did not do. FLoC cohort numbers had unknown meaning, whereas these topics are understandable to both the marketer and the consumer.
3. The Topics have a tie-in with the IAB advertising taxonomy, which is a sign Google that is not attempting to build a completely proprietary solution. This is likely in response to a key criticism of FLoC: it was not an open-source solution, like third-party cookies or the proposed UnifiedID 2.0 solution led by The Trade Desk.
4. The Topics API does provide some user control. Users, via their Google Chrome browser, will have some functionality available that allows them to decide which topics they are included in. They’ll also be able to opt-out, if desired.
5. Like FLoC, individual websites can forbid Topic calculations. However, because Topics addresses some major concerns, the hope is that major blockages won’t occur. This might not be the last iteration of Google’s solution to third-party cookies.

What does this mean for marketers?

With the launch of Topics API, Google is clearly trying to position it as a revised solution that accounts for FLoC’s shortcomings. A huge piece of this is clarifying that Topics is more privacy-compliant because it gives users some autonomy over and visibility of their Topics. For marketers, we see a number of upsides once Topics API is implemented:

• Topics data will be current. Participating sites will be provided 3 topics, one from each of the past three weeks of browser history. This should help keep ads relevant and timely to consumer browsing history.
• Topics categories will be understandable to both consumers and marketers. FLoCs were represented as numbers, providing no context as to why a user was targeted. But for an industry that’s used to creating user personas driven by demographic and psychographic attributes, this change was jarring. With Topics, users should see recognizable Topics they are included in with the choice to opt-out. And for marketers, seeing these relevant targets will provide some assurance that they are reaching the right audience.
• Marketers will become more reliant on layering first-party data and contextual signals together for targeting purposes. Nearly all marketing platforms have been planning for the deprecation of cookies. As a result, many are transitioning to appending contextual or behavioral data to fill in the gaps left behind by cookies. Unlike FLoC, Topics API makes it possible to combine multiple relevant signals together to enhance overall targeting.

At this point, everyone – advertisers, consumers, brands, even Google itself – are still waiting to see how this all shakes out. Google is set to launch developer trials of Topics in Chrome soon in order to test and collect the  feedback needed to inform a large-scale rollout of Topics down the line. Of particular note here is Google’s indication that it will test Topics globally – including in the European Union, home of GDPR – which means they feel confident that Topics will stand up to regulatory privacy compliance in a way that FLoC did not.

In the meantime, it’s crucial to continue taking steps to future-proof media campaigns – third-party cookies will disappear in 2023, so acting now will ensure you’re fully prepared. We’ll continue to keep a watchful eye on this landscape. Any questions? Let’s chat.