Over the past couple of years, Google has been faced with a seemingly impossible predicament: Honoring the privacy of users and abiding with changing privacy regulations while also providing advertisers with useful targeting options.

Facing a cookie-free future, Google initially rolled out a solution called FLoC, drawing some resounding criticism from every corner of the digital advertising industry. Now, Google has announced that FLoC is being sunsetted in favor of an alternative solution, called Topics API.

So, what does all of this mean? And what should advertisers know about this seemingly sudden about-face from Google?

Farewell to FLoC

First, it may be helpful to review what FLoC consisted of… and why it proved so controversial.

FLoCs, or Federated Learning of Cohorts, were first introduced in March of last year. Basically, this Privacy Sandbox initiative allowed browsers to enable interest-based targeting. This was specifically pitched as a solution to the removal of cookies from Google Chrome, something Google projected for calendar year 2023.

FLoCs would have grouped users into cohorts, preserving user privacy and anonymity while still providing advertisers with some basic information they could use to hone their messaging. (Cohorts were to be made up of thousands of users, so no one user’s information could possibly stand out.)

Introducing Topics API

The advertising community was less than impressed with FLoC, and amazingly, it seems like Google took the tepid response pretty seriously. The new Topics API is another Privacy Sandbox initiative to provide interest-based browsing. However, it was clearly developed with some of the FLoC feedback in mind.

So how does Topics API differ from FLoC? The main differentiator is in the specific way it gathers interest targeting.

Essentially, when you browse the Web, Topics API will select specific “topics” you are interested in, based on your search and browsing history. These topics reflect your interests for a given week and are stored for only three weeks total. After that, the information is deleted.

It’s also worth noting that the topics are only stored on a user’s device. There are no external servers, including Google servers, used.

Comparing FLoCs with Topics API: What Should You Know?

Now, it’s important to point out that both of these solutions revolve around a user’s specific range of interests. However, there are also a number of ways in which they are distinct from one another.

The main difference is that, with Topics, a user’s interests are wiped clean every three weeks. By contrast, users could have been stored in a FLoC cohort indefinitely.

Another important difference is that FLoC created a cohort ID that advertisers could use for targeting. Topics API does not create these IDs. Instead, it merely collects and shares topics with advertisers and websites.

Topics API ultimately provides users with a lot of control. Not only can individual users view the topics associated with them, but they can opt out of topics at their discretion. Users can even remove topics associated with them whenever they want to. It’s also important to note that sites covering sensitive topics, such as topics related to race or to sexuality, are automatically excluded from Topics.

What Does Topics API Mean for Advertisers?

The bottom line here is that Google is still saying all third-party cookies will be gone by 2023. As such, advertisers need to know about the options available to them for collecting data and targeting specific users. And right now, Topics API is one of the most important tools in the advertiser’s toolbox.

Certainly, Topics API seems like an improvement over FLoCs. And as more information comes in about the kinds of topics available, advertisers will be able to plan some of their future efforts and strategies with greater precision.

Crucially, Topics API doesn’t solve every problem created by Google’s cookie-ban. Remarketing without first-party data is still looking pretty dicey, due to inherent limits on user privacy. So, in addition to using Topics API, we recommend that advertisers start thinking about some ways they can ramp up first-party data collection.

Looking Ahead to the Future of Advertising

Over the next couple of years, the nature of online advertising is poised for some big changes. The time for advertisers to review their options, and start planning some strategic adjustments, is now.

At enCOMPASS, we’ve been following these stories for a long time now, and routinely offering updates to our clients. We’ll continue monitoring the situation and advising clients on how to proceed.

If you have any questions about the death of FLoCs, the arrival of Topics, the nature of first-party data collection, or the future of advertising, we’d love to talk with you. It’s always our pleasure to provide clients with the big picture of digital advertising. To chat with someone from enCOMPASS, reach out to us at any time.