Changes to Google’s Targeted Ads Strategy

Google Plans to Stop Tracking Individual Users

Yesterday, Google (GOOGL) announced plans to stop selling targeted ads based on internet users’ activity across multiple websites. Starting next year, the search engine will no longer invest in buying or building this type of technology.

Google is the world’s largest digital ad company. A total of $292 billion was spent on digital advertising around the world last year, and Google accounted for 52% of that spending. Because Google has so much market share, its decision will have a significant impact on the entire digital ad industry.

No More Third-Party Cookies

Last year, Google decided that by 2022 it would remove its most common tracking technology, called third-party cookies. The tech giant has now promised not to create alternative systems to replace third-party cookies.

Google will instead begin using what it calls a “privacy sandbox.” This will allow the company to send targeted ads without tracking individual people across multiple websites. Google plans to begin buying and testing several versions of this technology in the second quarter of this year.

Opposition to Google’s Plans

While some privacy advocates are cheering Google’s decision, the company has also faced backlash. A number of smaller digital ad firms which use tracking across multiple sites say that Google and Apple are using new privacy systems as a way to crowd out smaller competitors who do not have the resources to pour into new technology.

The UK Competition and Markets Authority opened an investigation into Google’s decision to phase out third party cookies after a group of marketers voiced concerns that these changes would help Google become even more dominant. Advertisers, investors, and everyday Google users will be eager to see how Google’s initiatives will unfold.

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