Right now, the buzz around privacy is more of a roar. Third-party cookies, which allow advertisers to reach specific individuals, are soon to disappear. To many, this privacy-conscious move is long overdue. At the same time, advertisers are looking for alternate ways to best reach their intended audiences. In response to both, Google has created a new technology called FLoC. Its goal is to bridge the gap between privacy and serving up relevant ads.
Recently, I spoke with George Nguyen from Third Door Media, who works as an editor for Search Engine Land and MarTech. As George is an insightful and well-studied voice in this space, I was eager to hear his thoughts regarding FLoC and its impact on SMBs. The following is a transcript from our conversation in the video above.
Lance: So I’m being joined right now by George Nguyen, of Third Door Media where you’ll find him as an editor of Search Engine Land and MarTech. And before we discuss the ramifications of losing our cookies, I will ask you, George, what is FLoC?
George: Let’s rewind a little bit, you may have seen it a lot on the news or in marketing circles, you’ve heard that third-party cookies are on their way out. …we’re moving into an era where these cookies aren’t going to be there, so we need a new way to reach our audiences. That way has to both satisfy privacy-conscious consumers and offer a level of precision that advertisers are used to.
That’s one of the big things, the context walking into this is the precision that advertisers are used to with a third-party cookie. We just don’t know how that’s going to unfold yet. That is the background leading up to FloC. Your question is, what is FloC so it stands for Federated Learning of Cohorts. Third-party cookies allow you to get to somebody on an individual basis. FLoC tries to get more privacy in there, protect users, by instead of allowing you to reach an individual with your targeted messaging, your ads, by grouping people into a cohort-based on their search behavior.
Lance: Retargeting efforts have largely been considered one of our least expensive forms of advertising, and we’ve got somebody who is interested showing up to the site, we retarget and there’s a lot of times that those people convert. Now we’re delivering ads to people that haven’t shown up to the site, they haven’t shown interest, and what do you make of adding those additional people to our pool?
George: One of the things to be aware of here is that FLoC in terms of beta testing with actual advertisers is going to happen in Q2 of this year, so could be happening now, could be happening very soon. Google has only said that it’s going to be happening in Q2, but according to their initial tests, I have a quote here from Google. “Our tests of FLoC to reach in-market and affinity Google audiences show that advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising.”
There’s a lot to pack there. The 95% sounds pretty good for something that’s moving drastically away from targeting individuals and protecting user privacy. I think most companies will get behind like, “5%, It’s not nothing, but if it keeps consumers happier, then that’s fine.” I feel like a lot of companies approached that mindset. Google said at least 95% of the conversions per dollar spent.
In terms of what you’re getting there in ROI, it should be similar. Right now, I really want to emphasize, we do not have the data. We don’t have advertisers saying, “This is how it’s turned out for me so far.” This is all speculative at this point, and we just have to go off of what Google has said there in terms of how well it’s going to do for you.
Lance: So from Google’s lips, everything is going to be okay, but we know that with Google a simple degree one way to the right or one way to the left changes a lot for marketers. Let’s focus on SMBs here for a minute. This privacy landscape, how should SMBs be preparing for right now for the future of privacy?
George: I’m going to give you some generic advice that you’ve probably heard a lot, but it never ceases to stop being true. First-party data, you need to be compiling it, you need to be getting some sort of contact information from your customers. If you’re an e-commerce retailer, it’s going to be a lot easier than maybe another type of business, but having a way to contact them, and then maybe putting that into a platform and marketing directly or creating a lookalike audience that is going to help you see through any volatile change that’s going to happen. Again, you’re not going to get the reach, you’re just going out to people that you’ve already sold to.
Still, loyalty is a huge indicator of future growth. I want to emphasize that. You might want to diversify your channels. This is generic advice in an industry that is far from generic. Every single business is this deep into whatever it is they’re doing. I have questions coming at me from off of Twitter because I write about these things. People ask me, “Hey, so cohorts, I work in a very niche B2B industry. We work on such little search volume, I cannot imagine that a cohort is going to be assigned to my particular audience based on this.”
What does it look like when you’re in 2021, the world is still in the pandemic, everybody’s still working from home? You have me who takes time on their breaks to look up Magic the Gathering cards or cooking recipes. Then, during their work, they actually do maybe some like B2B related business and only a sliver of their behavior is reflective of that. How is that going to work out within the cohort? These are things we just don’t have answers to yet.
Lance: So George, what are you working on, and what are some other things that folks can keep an eye out for here in the coming weeks and months?
George: I’ve taken a backseat to the writing just for a little bit because we’ve been working on our conferences. SMX Create, which is our upcoming conference, it might be available on demand by the time people watch this video. It’s occurring on April 13th. For anybody who is an SEO or PPC that is looking to up their game in terms of their creation process, but SMX Advanced happening in June is our big boy. That is the big flagship conference.
It’s where we really try to set the bar for the entire industry and what you can learn within a conference, so I’ll definitely be there. In terms of writing, I’m still trying to dig more into FLoC. It’s very, very difficult because a lot of the stuff written out there is in a developer’s English, and so I have to constantly go back and forth. Pretty much anything where the realms of communication and digital marketing touch is what I like to write about.
You can find me on Search Engine Land. We also have a newsletter, so please subscribe to that because pretty much within one newsletter you get bite-sized chunks of everything you need to keep up to date with the search industry whether you’re on the organic or the paid side.
Lance: His name is George Nguyen, and you can find him at Search Engine Land and MarTech. Look forward to talking with you again soon, it’s been great to have you.
George: My pleasure.