Google’s FLoC: Is Affiliate Marketing FLoCed? (#10)

I have been managing affiliate programs since 2005. And building affiliate websites as far back as 2002. Digital marketing was quite a bit different back in the early noughties!

Every year for as long as I can remember the demise of affiliate marketing has been predicted by pundits. I’m still waiting.

Is Google’s FLoc the death knell of affiliate marketing?

TL;DR My guess is no. That said, like GDPR, FLoC will cause a lot of headaches for online marketers.

First off, let’s take a step back…

That Google blog post

In March Google made a blog post titled Charting a course towards a more privacy-first web. To say it made waves is an understatement.

Keeping the internet open and accessible for everyone requires all of us to do more to protect privacy — and that means an end to not only third-party cookies, but also any technology used for tracking individual people as they browse the web. We remain committed to preserving a vibrant and open ecosystem where people can access a broad range of ad-supported content with confidence that their privacy and choices are respected. We look forward to working with others in the industry on the path forward.

Third-party cookies and any technology used for tracking individuals are being ended. While Google is only able to push FLoC through their Chrome browser, this is still a problem. Why? A lot of people use Chrome. According to Oberlo:

As of April 2021, Google’s Chrome is the leading internet browser in the world with a global market share of 64.08 percent. In other words, more than six in ten people use Chrome to browse the internet.

Third-party cookies and affiliate marketing

Third-party cookies have been the primary method for attribution of affiliate sales. They have been the literal linchpin of affiliate marketing.

So how do they work?

An advertiser with an affiliate program finds suitable publishers to run an ad unit. Typically on their website. A user clicks on the ad (supported by an affiliate link). They are then redirected to the advertiser’s website. The user then completes the desired action (purchase, sign up, etc.). An affiliate link typically redirects to ad servers hosted by an affiliate network. It is during this process where third-party cookies are dropped.

A browser that blocks the cookie drop prevents attribution of the user’s action to the publisher. This means that the advertiser will not know where the customer came from. So the publisher will lose their commission.

What is Google’s FLoC?

Google hasn’t given away much on exactly how their FLoC technology works. They have though outlined their vision, Building a privacy-first future for web advertising.

FLoC is a method for browsers (not just Chrome) to enable interest-based advertising. It works by gathering data about a user’s browsing habits. Users are then clustered into groups with similar interests, known as cohorts. The algorithm used to develop cohorts may look at the URLs of sites that the user visited. It may also look at the content of those pages. There is a FLoC proposal on GitHub which gives more background. Information about the cohort is then shared for advertising purposes.

Individual user data will be stored locally in the browser. Only the browser exposes the cohort ID. Cohorts will include enough people to make it difficult to identify an individual. They will also be specific enough to enable effective ad targeting. Users will be assigned into new cohorts weekly, based on their previous week’s browsing data.

There are two primary reasons why FLoC is such a big change.

1. Advertisers are used to targeting via third-party cookies. This enables them to reach specific individuals. With FLoC, individuals are put into a cohort based on their interests. This adds a layer of anonymity which may help user privacy.
2. The assigning of cohorts is done within the browser. This means users’ information is stored locally. With third-party cookies, an advertiser may be storing user data on one of their own servers.

Google’s FLoC is a terrible idea

To say that FLoC hasn’t been well received is an understatement. The Electronic Frontier Foundation (EFF) wrote a must-read piece, Google’s FLoC Is a Terrible Idea.

We stand at a fork in the road. Behind us is the era of the third-party cookie, perhaps the Web’s biggest mistake. Ahead of us are two possible futures.

In one, users get to decide what information to share with each site they choose to interact with. No one needs to worry that their past browsing will be held against them—or leveraged to manipulate them—when they next open a tab.

In the other, each user’s behavior follows them from site to site as a label, inscrutable at a glance but rich with meaning to those in the know. Their recent history, distilled into a few bits, is “democratized” and shared with dozens of nameless actors that take part in the service of each web page. Users begin every interaction with a confession: here’s what I’ve been up to this week, please treat me accordingly.

DuckDuckGo has announced plans to block FLoC via its browser extension and website. The DuckDuckGo Chrome extension will block all FLoC interactions. Users who search via their browser-based search engine will also be opted out from FLoC.

Then there’s Microsoft.

Lawrence Abrams reported—Microsoft disables Google’s FLoC tracking in Microsoft Edge:

This month, Google began testing a…controversial FLoC browser-based tracking feature. …Called Federated Learning of Cohorts [it] places users in anonymous buckets, or cohorts, based on their interest and browsing behavior.
…
Unlike third-party cookies used by advertisers to track your behavior and interests across different sites, FLoC is built into the web browser, which assigns you to behavior cohorts and shares that information with websites and advertisers. [In] Chromium-based browsers, Google has enabled support for FLoC by default.
…
[But] with Microsoft Edge…the component is not available in the browser.

Reports also show that Apple, Brave, WordPress, and others will turn their backs to FLoC.

What can a business do without third-party cookies or tracking ID?

This is the proverbial million-dollar question. Smart businesses are using first-party data. This means that they keep track of what users do while inside their website/platform. A Customer Data Platform, or CDP, is necessary if you want to end reliance on third-party cookies.

Greater numbers of companies are making the switch to first-party data. The best examples are newspapers, news websites, and online magazines. This is due to their near-total reliance on advertisers.

Ultimately, anyone who wants to offer users a personalized experience, across all channels, must switch to first-party data.

The alternative to third parties collecting data – which will allow targeted advertising – is to offer paid accounts. This though will mean that only the well-off will be able to access the best online content.

There is a fine balance between privacy and an open internet.

Are there any other alternatives?

Customer Identity Access Managers (CIAMs) are an interesting ‘plan B’. These are platforms which allow users to create their own profile. They can then use this profile to log in to various websites or applications.

A CIAM provides both ease of login for users and the ability to collect metadata from those same users.

CIAMs function in the same way that you can log in to several websites via your Google or Facebook account.

However, with CIAM, you have much more control over what happens with your data.

More and more companies will be allowing customers to log in via CIAM platforms in the coming years. With this said, users will be less and less aware that they are logged in to many platforms. (Like they are with their Google and Facebook accounts).

What will happen to affiliate marketing after the cookie crumbles?

The short answer is probably not much. Major players are aware that access to free online content relies on ad dollars. The phasing out of third-party cookies will not end one core source of ad dollars. Affiliate marketing.

Alternative tracking options are available. And (yet invented) less invasive solutions will fill the gap created by the end of third-party cookies.

There are two ways affiliate marketing can implement tracking without the third-party cookie:

1. First-party cookies: As discussed above, tracking is be done with first-party data. This is data that the website owner collects. It requires business partners to synchronize their data in the background.

2. Server-to-server tracking: Allows affiliate and Advertiser to track without the use of cookies. Servers on both sides interact when an action or conversion event occurs. Many affiliate networks have been switching to this form of tracking.

Final thoughts

Google is already running a trial of FLoC on about 0.5% of users. Regions include Australia, Brazil, Canada, India, Indonesia, Japan, Mexico, New Zealand, the Philippines, and the United States. You can check to see whether you’re one of those users at the EFF’s site Am I FLoCed?

I’m considering either opting out of FloC per the instructions on How-To Geek. Or even retiring Chrome completely. (Something that I have been considering for some time now). Brave and Vivaldi, both built on Chromium, have pledged to disable FLoC by default. Safari is built on Webkit, not Chromium, so FLoC isn’t an issue there. The makers of Firefox have also said that they won’t take part. Microsoft has disabled FLoC in its Chromium-based Microsoft Edge browser, too.

What are you doing about FLoC? Are you worried that it will affect your business? I’d be very curious to hear your thoughts in the comments!

Check out more ‘Revelations’ here.