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InContext / An inside look at the business of digital content

Why FLEDGE might be the best thing hatched in Google’s Sandbox 

October 5, 2022 | By Kean Graham, CEO and Founder – MonetizeMore @monetizemore

We’re more than half way through 2022, and we still do not know exactly what’s happening with third-party cookies. On the one hand, Google announced that it will be delaying the phase-out of third-party cookies until 2024. The ad tech giant has also promised us a well-built solution that can sustain publisher revenue without third-party cookies. 

In fact, a big reason for the delay is that Google has not been able to figure out a solution yet. The privacy sandbox started in August 2019 has been underwhelming, failing to bring forth a solution that preserves user privacy while allowing publisher income to flourish.

That said, a few exciting proposals emerged from the privacy sandbox. Promising ideas included FLoC, TURTLEDOVE, and trust tokens, which were among the most popular. However, none of these held the key to the most critical problem in the ad tech industry right now: how publishers can maintain and increase their revenue while protecting user privacy simultaneously.

One proposed solution that promises to better suit the needs of publishers and advertisers while protecting user privacy is FLEDGE, a privacy sandbox proposal within the TURTLEDOVE family. It may be the solution the ad tech industry is looking for because it addresses the end goal of privacy via interest and behavior-based digital advertising.

The concept of FLEDGE stems from the fact that, while contextual advertising is a vital asset in the absence of third-party cookies, it might not be able to render the revenue needed.

Let’s take a look at the potential of FLEDGE as well as some of its competitors to better understand the approaches being explored and what these experiments and possible outcomes could mean for publishers.

Can FLEDGE save the day?

The uncomfortable truth is that after the failures of FLoC and other privacy sandbox proposals, there is a lot of hope riding on FLEDGE.

FLEDGE is short for First Locally Executed Decisions over Groups Experiment and it uses remarketing audiences. FLEDGE functions on the understanding that interest groups can be created by assigning users, which can be done by publishers, advertisers, and ad tech vendors in tandem.

Owners of interest groups can add members with the help of a JavaScript function: Javascript function, “joinAdInterest Group(), which is called out to a user’s browser when they visit a website. And then, the following process is performed to display a relevant ad to a user.

Source: Google

Why FLEDGE looks Promising

Limited control over users’ browser details

It’s important to note that FLEDGE only allows the assignment of users’ browser details in interest groups for only 30 days. After the one-month mark, publishers or advertisers must complete the same process again, which gives them only limited control over this data, thus protecting user privacy while helping the former earn short-term revenue.

Fenced frames provide more security

When a winner for an auction is declared in the ad space sales cycle, the ad information is only sent to a secure frame within a web page called the Fenced Frame. This prevents brands from collecting user data, protecting user privacy as a result. But the publishers’ and advertisers’ revenue isn’t compromised in the process.

Granular event-level reporting

FLEDGE allows outcome reporting to publishers and advertisers after the ad is displayed to a user. As we all know, granular reporting is key to improving advertisement creatives and overall ad serving quality which helps publishers earn more revenue.

Other alternatives competing with FLEDGE

Apart from the promising potential of FLEDGE, many other options in the ad tech industry are emerging as viable competitors. Here’s an introduction to the main ones:

PARAKEET

Direct competitor to FLEDGE, PARAKEET has been developed by Microsoft and stands for Private and Anonymized Requests for Ads that Keep Efficacy and Enhance Transparency. PARAKEET uses a proxy model that stores a unique ID for each user, and this proxy server stands between the advertiser and the ad space. When the SSP/website requests an ad, the proxy server mediates to serve a pretty accurate ad in alignment with the user’s preference while masking the user’s data, including their location, gender, etc.

TOPICS

As the name suggests, Topics capitalizes on the topics a user is likely to follow and displays ads based on that knowledge. This is another privacy sandbox proposal brought forth by Google. It is a kind of contextual advertising but much more granular.

OTHER PROPOSALS

Some other alternatives in the market are not direct competitors of FLEDGE but hold potential. These include:

Proposed solutionDescription
Email HashingThis converts a user’s email ID to a hashed string which can then contain data and behaviors attached to it. Unlike third-party cookies which contain information about anonymous users, hashed emails protect user privacy while allowing retargeting companies to get relevant information.
Probabilistic IDsThese are direct competitors of Deterministic IDs which capture the exact data of the user, thus invading their privacy. Probabilistic IDs used shared IP addresses, time zones, and other such inexact parameters to build probabilistic user profiles that offer around 75-90% accuracy for targeting.
Clean RoomsThese are online spaces where companies like Google and Amazon can share data with advertisers without violating user privacy.
Encrypted SignalsThis is an initiative launched by Google which allows publishers to share encrypted first-party signals with advertisers. This can be implemented via Google Ad Manager.
Publisher Provided IDsThis is another Google Ad Manager feature but it is only available for the 360 version. As the exact definition states, ‘Publisher provided identifier (PPID) allows publishers to send Google Ad Manager an identifier for use in frequency capping, audience segmentation and audience targeting, sequential ad rotation, and other audience-based ad delivery controls across devices.’ Google is calling them the #PPIDs.

Looking forward

Publishers’ frustration is understandable, seeing the uncertainty associated with third-party cookie demise and the failure of some of the proposed solutions. But FLEDGE might be the solution that holds the most promise, considering how elegantly it preserves user privacy while helping publishers increase revenue. Publishers should keep their hopes high because FLEDGE may just transform into the solution that they have eagerly awaited. 


About the author

Kean Graham is the CEO and Founder of MonetizeMore. He is a pioneer in ad optimization, covering areas such as AdSense, AdX, GAM, header bidding, and ad network optimization.

He firmly believes in empowering publishers to increase their ad revenues more efficiently and effectively via technology, PubGuru University, and YouTube Tutorials

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