2021 was a year full of important news for the future of digital advertising. Let’s take a look at the most impactful from the industry perspective.
Building a privacy-first future for web advertising – Google (January)
= 2021 started with Google’s announcement on January 25th, which included two crucial pieces of information:
= The Federated Learning of Cohorts (FLoC) proposal claims to deliver at least 95% of conversions per dollar spent when compared to cookie-based advertising.
= FLEDGE will become the next iteration of TURTLEDOVE, an interest-based advertising proposal, which includes input from major industry players such as RTB House.
= Both of these were huge, but the mainstream media focused largely on the first one, as it was the first material estimation on how advertising without cookies will perform. Not long after, many adtech players expressed doubt about the methodology used by Google to achieve these numbers.
= In Q2, the initial Origin Trials (early in-browser experiments) of FLoC took place, which some believed would give answers to the performance questions. However, none of this happened, as the scale of the trials was too small.
= Meanwhile, there were no in-browser experiments of FLEDGE in 2021, therefore the mainstream media was not covering this proposal to the same extent as FLoC.
= This brings us to the current state, where 2022 starts and, according to the Privacy Sandbox timeline, so does the Origin Trials of both FLEDGE and FLoC, even though the specifications for these are still unreleased.
= 2021 was not entirely about the upcoming changes to web advertising. In April, Apple released the long awaited iOS 14.5, which included a feature called AppTrackingTransparency (ATT), requiring apps to ask for the user’s permission before tracking their data across the apps owned by other companies e.g. for advertising purposes.
= This feature had a significant impact on inApp advertising. Prior to iOS 14.5, when there was only a general personalized advertising opt-out mechanism, the majority of users could be targeted by their IDFA (identity for advertising, a unique device ID). After changing the mechanism to opt-in, only users that accepted tracking could be targeted by IDFA, and the acceptance rates were low – around 20%. Since there is no alternative to IDFA, advertising became much less personalized and effective ever since.
= AppTrackingTransparency had a massive impact on advertising companies operating in the iOS ecosystem, but it also caused Apple to largely benefit from Apple Search Ads, as was reported by Eric Seufert from Mobile Dev Memo.
= The Competition and Markets Authority, a United Kingdom regulatory body, conducted an investigation on the Privacy Sandbox, Google’s initiative for cookieless advertising. The authority wanted to understand whether it could lead to a further monopolization of the industry by favoring Google.
= The investigation concluded that indeed some of the aspects of the initiative could largely benefit Google at the expense of other players. Because of that, the CMA required Google to present a set of commitments that the company would follow in the future development of the Privacy Sandbox to make it more competition-friendly.
= After publishing an Interim Report in June, the UK’s Competition and Markets Authority held a consultation period, during which industry entities submitted their comments and concerns. The CMA heard from over 40 parties, demanding the commitments to be strengthened in selected areas.
= In November, Google proposed a modified set of commitments, which promised closer oversight by the CMA on Google’s actions. One of the most crucial rationals behind the commitments was to provide more transparency for other market players. We reported on this document in more detail in the previous Media Review.
= The new commitments were also followed by a consultation period, which concluded on December 17th. Now the CMA is considering comments on the revised commitments, and the consideration is planned to end in February 2022. Afterwards, the CMA will either accept the commitments and close the investigation or require Google to provide another set.
An updated timeline for Privacy Sandbox milestones – Google (June)
= In perhaps the most discussed article this year, Google postponed the phasing out of third-party cookies from 2022 to 2023. It is speculated that this announcement was heavily influenced by the CMA’s report as mentioned earlier.
= In the article, Vinay Goel, Chrome’s Privacy Engineering Director, emphasized that more time is needed to get the future advertising right, even though there has been considerable progress with the initiative.
= The author also published a new, more realistic timeline for the change:
= Stage 1 (starting late-2022): publishers and the advertising industry will have 9 months to migrate their services,
= Stage 2 (starting mid-2023): third-party cookies will stop being supported over a three-month period finishing in late-2023.
= Later on, Google also published a dedicated website at privacysandbox.com/timeline, where the current, monthly updated timeline is published.
Private Advertising Technology Community Group – W3C (October)
= In October, a new Community Group at the W3C, called the Private Advertising Technology Community Group (PATCG), was founded.
= This group includes major players from both demand (including RTB House) and supply sides of the industry, as well as browser vendors. What is special is that it’s not chaired by a single browser vendor, which leaves room for a constructive discussion between all players. Representatives from Chrome, Firefox, and Edge are all actively contributing to the discussions.
= PATCG is expected to become a key group to develop interoperable digital advertising privacy standards for the future web without third-party cookies. The Google Chrome team announced that it plans to move FLoC, FLEDGE, and reporting proposals to the new group. Microsoft expressed the same initiative with its PARAKEET and related proposals.