As the world becomes increasingly dependent on big tech, protecting consumer privacy online is more important than ever. According to Pew Research Center, most Americans believe they have little to no control over the data companies collect about them to create targeted Google ads. In a recent step to mitigate these privacy concerns, Google announced significant changes to how it collects user data and targets ads. But what does that mean for advertising your business?
Google is the world’s largest paid search advertising channel, which means any change it makes will ripple throughout the entire industry. According to Jounce Media, Google accounted for 52% of last year’s global digital ad spending. So what does Google plan to change when it comes to collecting user data for paid search advertising? What do those changes mean for businesses that use Google ads and the rest of the digital advertising industry?
What is Google’s Plan?
In a March blog post, Google’s Director of Ads Privacy David Temkin wrote about the specifics of the new changes. The tech company no longer plans to track users uniquely as they browse from site to site, meaning they’ll no longer collect data about their habits and interests individually. Digital marketers had known changes were coming since last year when Google announced they would stop using third-party cookies to track individuals. However, the new announcement confirms that they won’t be creating alternative methods to track unique users. Instead, they say they’ll gather data that digital advertisers can use by placing users in groups.
Specifically, Temkin wrote that Google strives to create “innovations that protect anonymity while still delivering results for advertisers and publishers.” This statement refers to Google’s new tool called the “privacy sandbox,” a tool composed of five browser APIs that should be capable of targeting paid ads to groups of consumers based on their activity without individually tracking and collecting their user data.
But the privacy sandbox remains in infancy. Google says the tool will deliver the same success as its current paid search advertising methods, claiming that in internal tests, the new technology that groups users into ‘cohorts’ have worked “nearly as well” as one-to-one targeting. However, companies like Facebook say Google stands to benefit from these changes by limiting competition, while smaller businesses need one-to-one targeted advertising to be successful.
How it Affects Small Businesses
Small businesses succeed in the digital ad space when they have access to a detailed picture of whom to serve ads to and whether or not those ads translate to a customer purchasing their product or service. With the new changes from Google paving the way for broader shifts from other powerful tech companies (like Apple), small businesses just won’t have the same access to that picture. What’s more, the companies making the changes don’t stand to lose as much from them as small businesses would, because they still have first-party data from users in their own sights.
What remains to be seen is whether the benefits for consumers that come from greater privacy online will outweigh the challenges for smaller businesses when it comes to getting their products to the screens of individuals who could stand to benefit from them.