Google Announces Topics API Will Replace Third-Party Cookies, FloC Flies Into the Sunset

Google is coming in hot in 2022, announcing that the tech giant was proposing a new potential replacement for third-party cookie targeting.

First, a little history: in 2021, Google delayed its self-imposed early 2022 deadline to start phasing out third-party cookies in Chrome until 2023. At the time, they renewed their commitment to Federated Learning of Cohorts (FLoC). FLoC would utilize first-party data to probabilistically generate cohorts aligned with modeled interests and propensities. Advertisers would then be able to target their ads to these cohorts, rather than the individual user.

While the deadline has remained the same, Google announced this week that they were dropping FLoC in favor of Topics API. 

So what exactly does this mean for advertisers? At this point, it’s not entirely clear. We’ve gathered some perspectives from across the web to better understand what the announcement means (and what it could mean).

What is Google’s Topics API?

Topics identifies a user’s top five interests based on a week’s worth of web activity that are stored for just three weeks before being deleted. Advertisers will be able to see three of those interests: one per week for that three-week period. Topics are stored entirely on-device without involving any external servers, including Google’s own servers.

Currently, there are 350 available topics, but Google is planning on adding more, although that number is likely to remain in the hundreds or low thousands (as compared to 32k+ in FLoC). What won’t appear are what Google identifies as sensitive categories like race and gender. They’re also building in Chrome functionality that will give users more visibility into their own topics and control over what advertisers can see.

Simon Harris, Director of Trade Desk at DPG Media, outlined his initial takeaways from Google’s more in-depth technical explainer:

Will Topics API let marketers effectively target users? 

This is probably the biggest concern right now. Critiques of the FLoC proposal tended to focus on continued privacy challenges: was Chrome still collecting too much user data? Could data be stitched together to identify individuals? The nail in FLoC’s coffin was likely GDRP compliance; earlier in 2021, Google suspended FLoC trials in Europe as the proposal’s viability under GDPR was called into question.

Balancing privacy with advertising efficacy is obviously extremely tricky. Google SVP Hiroshi Lockheimer explains that, like many businesses that depend on digital ads, Google believes that calling for the end of all targeted advertising is not realistic.

John Wilander, one of the architects of and the public face for many of Apple’s controversial privacy initiatives, threw down on Twitter, claiming that many of the privacy issues raised around FLoC still apply to Topics.

Topics are clearly being positioned as a much more privacy-first targeting replacement for third-party cookies, but marketers are already questioning how effective this new approach will be. 

Wpromote’s VP of Digital Intelligence Simon Poulton expressed doubts that Topics could serve as an effective third-party cookie proxy on their own based on Google’s initial proposal. The truth is that marketers will likely lose a lot of the precision they’re used to when it comes to audience targeting. The FLoC proposal was intended to preserve many of those capabilities, and Topics offers a much simpler approach that includes significant time restraints and provides advertisers with much broader contextual information.

Paul Bannister, CSO of CafeMedia, dove deep into Google’s available information and came to the conclusion that Topics are a step in the right direction for privacy but a step backward for advertisers.

Why are critics claiming Topics are anti-competitive?

Google has faced both public criticism and legal challenges around potential anti-competitive behavior, including FLoC and other privacy plans, which likely contributed to the delay in phasing out third-party cookies. 

James Rosewell, Director of Movement for an Open Web, who filed a complaint against Google specifically calling out FLoC, and other critics claim Topics does not address those concerns because Google itself will still have access to data that advertisers and other parties from publishers to ad tech will no longer be able to use. Rosewell told Protocol that “Google isn’t going to use it. Topics are for rivals. [Google] is still discriminating against rivals.”

For its part, Google points out that its approach to privacy changes is rooted in open-sourced collaboration and feedback. Ben Galbraith, Senior Director, Product for Google, indicated to AdExchanger that the tech giant is keeping potential anti-competitive advantages front of mind as they test new proposals, explaining that “we need to make sure that whatever we do does not result in us giving an unfair advantage or favoring our advertising business, and that’s the underlying constraint that dictates how we think about this.”

What comes next for Topics API?

For now, most advertisers are playing the waiting game. Google will be launching developer trials of Topics in Chrome in the near future, gathering feedback from advertisers and developers and learning what works and what doesn’t. Google has indicated that they will be testing Topics globally, including in the EU, which means that they feel confident that the concerns raised around FLoC’s GDPR compliance have been sufficiently addressed in this new proposal.

We will continue to monitor any privacy news, announcement, or changes and keep you updated with insights and actionable guidance as we learn more.

For more information about how data privacy is evolving, check out our latest comprehensive guide to the State of the Data 2023.