Hello friends, and welcome to this edition of The 20 Percent.
Today’s edition is about Google marketing in a pro-privacy environment and the emergence of FLOC, a new technology that uses federated learning to profile users for advertising and personalization purposes.
Introduction to FLOC
Federated Learning of Cohorts (FLoC) proposes a new way for businesses to reach people with relevant content and ads by clustering large groups of people with similar interests. This approach effectively hides individuals “in the crowd” and uses on-device processing to keep a person’s web history private on the browser.
Despite the significant pushback upon its beta launch, FLOC has the potential to bring personalization and targeting without significant privacy tradeoffs. Most of the pushback was related to the technology being incomplete rather than its core principles. In my opinion, FLOC is a good indicator of the direction where Google is headed.
Google Marketing in a Pro-Privacy Environment
There are two important questions regarding the future of search engine marketing: A) will Google lose market share to search engines like Neeva, Brave, and DuckDuckGo, and B) how technologies like FLOC will affect marketing with Google?
Generally, it isn’t easy to estimate search engines’ market share, especially across different geographies. For simplicity, I like to focus on the US market since it’s the largest English-speaking market in terms of search volume.
The most notable study I’ve come across so far was compiled with data from Jumpshot, a marketing analytics subsidiary of Avast that was shut down in 2020. The picture the study portrays is that of a monopoly: with over 90% market share, virtually every search in 2018 was performed on Google.
Although DuckDuckGo, Brave, and Neeva are growing exponentially, this is normal for tech startups as they build their foundation amongst early adopters. With that in mind, and in the absence of new data, it’s hard to estimate how Google’s market share changes.
Moreover, it’s challenging to correlate search volume trends with unique monthly users due to the privacy features of these platforms. For example, DuckDuckGo doubling its search volume could indicate that it doubled its users or that the same number of users started to use it more frequently.
Despite the privacy trends we’re seeing, I expect Google marketing not to change too much. Google has taken a pro-publisher stance, and any technology such as FLOC won’t bring significant changes to this, while it will improve the privacy of its users.
I expect ad costs on the search and display networks to remain largely the same, while webmaster tools such as Google Search Console will continue to provide valuable insights.
Undoubtedly, Google has the edge compared to its competition. From office hours where anyone can ask their questions to the extensive documentation on Google Search Central, and webmaster tools like Google Search Console, they are the only ones who understand that search is an ecosystem. This ecosystem is about bringing together searchers and website owners and is equally important to include both.