Google Will Become The World's Largest Advertising Company

Mar 09, 2021 News

Google Will Become The World's Largest Advertising Company

It may be hard to imagine that the fulcrum of the global Internet advertising market of more than 560 billion US dollars is just a text file on your computer and mobile phone, which is only a few tens of KB in size-Cookie.

Personal information such as your name, email address, etc., will be passed to the server through a cookie when you browse the web, and businesses can send more accurate advertising information to you as a user based on the information in the cookie.

This is why 20 years after the development of the Internet and mobile Internet, technology giants like Facebook and Google will become the world's largest advertisers because they can find the right audience more accurately than traditional advertising.

However, as privacy protection has gradually become the mainstream, technology giants have also begun to take action, and one of the important directions is to eliminate 'third-party cookies'.

On March 3, US time, Google announced that third-party cookies on the Chrome browser had officially ended. As early as a year ago, in January 2020, Google announced a plan to phase out support for third-party cookies on the Chrome browser in the next two to three years.

Justin Schuh, director of engineering at Google Chrome, said that Google will redesign the Internet standards to protect user privacy even when the user is set as the default. Not only restricting the 'tracking mechanism' including cookies but also prohibiting digital fingerprint extraction (collecting user mobile phone, computer model, and other information) is also one of the directions of the Google team's efforts.

In addition, in August 2019, Google updated its privacy notice to improve user privacy and the boundaries of personalized advertising, aiming to push personalized advertising while still retaining user privacy. In February 2020, Google implemented new regulations requiring third-party cookies to be accessed only through HTTPS connections, thereby restricting cookie tracking technology.

But at the time, Google's ideas were still in constant flux, and many solutions were uncertain.

Today, Google's path of travel has become clear. Google Advertising Privacy and Trust Product Management Director David Temkin made it clear on his blog that after third-party cookies are eliminated, Google will no longer establish alternative tracking programs similar to cookies 'Because these solutions cannot meet the growing privacy needs of consumers, nor can they keep up with the requirements of laws and regulations, this kind of long-term investment is unsustainable'.

Online public data shows that advertising accounts for the bulk of Google's total revenue. In 2019, Google's advertising revenue exceeded China's total advertising market spending of US$87.53 billion with US$134.811 billion. As a global advertising giant, does killing cookies mean that Google will never collect user data? Or does it mean that Google has never left behind in order to establish technological values, or is it another hidden business speculation?

Another way to continue tracking

Nowadays, restricting cookie tracking has become a trend.

In 2017, Apple Safari restricted cookie tracking. Two years later, the Firefox browser developed by Mozilla blocked cookie tracking. Last year, Microsoft's Chromium version of Edge also opened the anti-tracking function. And Google became an important variable in the battle to kill cookies. Statcounter data shows that Google Chrome is the most widely used browser in the world, occupying more than 60% of the global market.

Google's deletion of cookies is related to the tightening of privacy regulations.

In 2018, the European Union introduced the GDPR General Data Protection Regulation, awakening all parties to pay attention to the processing of users' personal data. In addition, Google itself is also subject to multiple censorships. In September 2019, 10 states, including Texas, conducted a survey on whether Google provided more data to increase its business advantages, such as advertising.

Cookies are undoubtedly one of the original sins of data collection and personal information leakage.

A cookie is a message sent by a web server to the browser when a user visits a certain website, and the browser stores each message in a small cookie.txt file on the user's computer. The file includes information about the user's visit to the webpage, or the user's name, email address, etc. Personal information. Cookies are often used to track users' network behaviors. Each time they visit a certain site, the browser will pass the cookie to the server, and the server will collect which websites the user has visited and have the highest repeat click rate.

For example, e-commerce platforms usually use cookies to record users' personal information, history, personal preferences, geographic location, and product information in the shopping cart. Users do not need to repeat their username and personal password each time they visit an e-commerce site.

Cookies are also divided into first-party cookies and third-party cookies. First-party cookies generally come directly from the website that the user visits. If the user jumps to another website, the cookie can no longer be tracked. A third-party cookie refers to a third-party tracking code that is loaded when a user accesses the Internet. Third-party cookies are the most common method used by advertisers. For example, after checking product information on an e-commerce platform, a short video platform may lead to the introduction of the product information.

Of course, the deletion of cookies by Google does not mean that Google no longer collects user privacy data, does not push advertisements based on user behavior data, but tracks user personal information in a more concealed manner.

It is reported that Google is testing a technology called FLoC, which Google calls 'interest-based' and 'privacy-first' advertising technology. The principle is to track users' surfing habits through Chrome, place users in different types of groups based on user interests, and then advertisers push advertisements to suitable groups.

In any case, tracking and locating user information and network behavior are still going on. So, whose interests have been harmed by killing cookies?

Information tracking fears ;dominant family'.

There is no doubt that for small and medium-sized advertisers who rely on third-party cookie technology to push advertisements, Google's plan is bad news and may lead to direct bankruptcy. After all, the online advertising industry model has remained unchanged in recent years. It is distributed in every corner of people's daily life and has billions of data points. Only Google's third-party cookies are spread across millions of websites, and transactions are automatically carried out every second.

Therefore, deleting third-party cookies will affect all aspects of online advertising industry products, services, brands, and technical networks. It will be more difficult to re-change the rules of the online advertising industry and track individual user's personal information.

A report released by the UK Competition and Markets Authority (CMA) at the beginning of this year showed that there are very few news sites that have successfully abandoned third-party cookies and that news sites that rely on advertising revenue will see advertising revenue drop by 70% in the short term.

At the same time, as far as Google is concerned, FLoC has not been unanimously recognized by the critics, and controversy continues. For example, data scientist Basile and code engineer Aram have publicly expressed their concerns, believing that the joint learning technology of similar groups will lead to the differentiated treatment of people with race, sexual orientation, and disabilities, increase discrimination, and trigger cyberattackers to attack specific groups.

In addition, the effect of similar group joint learning technology in advertising promotion is 95% of that of third-party cookies. Many people in the advertising industry believe that due to the slight decline in advertising effectiveness, companies will spend more money to achieve their previous advertising efficiency goals. New technologies still have a long way to go before they can completely replace third-party cookies.

But if it is therefore considered that the cancellation of third-party cookies is a major disadvantage for Google, then a mistake is added.

After Google cancels third-party cookies, the third-party cookies will switch to first-party cookies centered on Google's network. In other words, Google search, browser, YouTube, and other products and software can collect massive amounts of first-party data. When third-party data sources are exhausted, the importance of first-party data will increase, thereby strengthening Google's Control of the entire online advertising network and technological ecology.

Relevant data shows that 9 Google products, including Google Mail and Google Maps, are used by more than 1 billion people worldwide every month, and the Google platform can get billions of clicks every day. At the same time, most of Google's advertising revenue comes from Google search, which far exceeds the advertising revenue generated by third-party cookies. The cancellation of third-party cookies will basically not have any substantial impact on Google's revenue.

The UK Competition and Market Authority stated in a review report that Google's blocking of third-party cookies in Chrome may enable Google to play a greater role in the global advertising ecosystem, further consolidating Google's dominant position in data collection, and Chrome may even become The key bottleneck in the advertising industry.

American technology media Vox commented that consumers do not like third-party cookies, and the law may ban them in the future. More importantly, Google does not need it at all.

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