What is Happening?

A global push for data privacy continues to grow as governments and companies take steps to improve privacy for users.

Apple is preventing iPhone tracking by default. Empowering users to opt in to tracking based on the identifier for advertisers (IDFA). And Google has said it will end third-party cookies by January 2022. Preventing access to behavioural data that drives effective advertising on the internet.

Recently, advertisers have expressed concern with how they will be able to access third-party data in future. Data that has been critical to targeting customers online.

Proposed by Google, Federated Learning of Cohorts (FLoCs) could be one way to do that that is more respectful of privacy.

OK, So What is a FLoC?

A FLoC provides a privacy-preserving mechanism for interest-based ad selection.

Federated Learning of Cohorts is a method Google has devised to track internet users' interests. And then serve them ads relevant to those interests. The method aims to be better for privacy by grouping thousands of users into interest-based cohorts.

As a user moves around the internet, their browser uses the FLoC algorithm to work out its "interest cohort". Which will be the same for thousands of browsers with a similar recent browsing history.

How Does it Work?

Federated learning is a technique of distributed model training where data remains on the client-side.

User data, which may contain very sensitive information, is never passed to any coordinating server. Data models are then trained without actually seeing underlying data. This is done by using local models trained on personal datasets.

In other words, federated learning is a process that allows a collective model to be created from data that is distributed across data owners without its direct disclosure.

💡 Are you wondering how does a browser work out its cohort? Well, take a look at this article here for a more detailed explanation.

Will FLoCs Work?

Google has claimed that FLoCs will be as much as 95% as effective as third-party cookies.

If true, this would be a win-win for advertisers and users who’d like their information to remain private.

While many would like to know how Google will integrate FLoCs into the advertising ecosystem. Many more would also like to know how effective FLoCs are vs the current state of behaviour targeting. Google is still very much in testing and is actively encouraging others to participate in how Google Ads and measurement products work on the internet.

💡 AdExchanger has an overview on more industry perspectives.

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