Navigating the Cookieless Era Part 5: What is Cohort Marketing? Google Privacy Sandbox and Seller-Defined Audiences

Welcome back to our Navigating the Cookieless Era blog series. In this article, we’ll explore more identity solutions, but this time the focus is on cohort marketing via key cohort-based solutions: Google Privacy Sandbox (specifically, Topics API and Protected Audience API) and Seller-Defined Audiences.

According to Google, 81% of their users don’t want to exchange their privacy for free content anymore.  As online marketers, we must respect this.  

We must also recognize that besides owning Chrome, the world’s most widely used internet browser, Google is the largest publisher on the planet, with close to 100% of users logged in. 

In the cookieless world, advertisers seeking addressable audiences will probably move even larger parts of their budgets to Google (and Meta, ie. Facebook and Instagram) properties where user targeting and tracking will continue to be possible. 

This brings us to the alternative tactic for user identity and targeting on the open web: cohort marketing.

In essence, cohorts are what a browser thinks about a user. The browser leverages machine learning to algorithmically classify users into one of hundreds or thousands of categories, or cohorts, based on their browsing habits. This is known as customer cohort analysis. Advertising vendors can ask browsers which cohorts a user belongs to, and decide what ads to show the user.

Cohorts are meant to be privacy safe, because only the browser is tracking the user, rather than every other online vendor. Moreover, cohort marketing is supposed to be almost as efficient as current, more invasive forms of targeting.

Let’s take a look at two types of cohort-based solutions: Google Sandbox and Seller-Defined Audiences.

Google Privacy Sandbox – Topics & Protected Audiences API

Topics API and Protected Audience API (PAAPI) are Google’s evolved version of cohorts (also called “device-managed audiences”), since they both move targeting and measurement to the browser. They are currently being tested by enrolled partners, including Outbrain. 

• Google Topics API is an in-browser API designed to enable advertisers to find broad audiences. It uses Chrome’s browsing history to gather information about users’ interests by identifying a handful of topics (like “cooking” or “fitness”). As Google states, “Because Topics is powered by the browser, it provides you with a more recognizable way to see and control how your data is shared, compared to tracking mechanisms like third-party cookies.”

Google created Topics as an upgrade of its initial proposed solution, FLoC (Federated Learning of Cohorts), based on heavy criticism it received for placing a too small number of users in a single cohort, making individual user identification highly likely. Topics, for their part, have many more users assigned to them, so users remain anonymous. 

• Protected Audiences API (formerly known as FLEDGE) is an in-browser API that aims to enable remarketing to known audiences. At the same time, it respects user privacy by keeping data flows (ad bidding and targeting) at the browser level, thus preventing data leakage. 

Both these solutions place Google as the gatekeeper controlling and holding the data, dissuading supply-side platforms from participating in the trials. For this reason, questions remain around the adoption of these Google Privacy Sandbox solutions.

Google Privacy Sandbox – Topics & PAAPI cheat sheet

Seller-Defined Audiences 

SDA is a privacy-by-design solution that outlines a way of transferring first-party audience attributes in bid requests without sharing a user’s identity. Using IAB Tech Lab’s Audience Taxonomy standard, publishers can create standardized audience groups (cohorts) based on their owned first-party data and categories such as interests and demographics. They then share them with a demand-side platform (DSP) bidding on their inventory in a fully privacy-compliant way, with no user identifiers being shared. Advertisers can check the attributes of an SDA via the data label tied to it, which clarifies who provided the data, what audience segment is described, how the segment was built, and where the data came from.

Today, seller-defined audiences are not yet available at scale, meaning there is no clear feedback regarding their performance. Even so, publishers are hopeful about SDAs because they give them control over how to bundle and sell their audiences. Some advertisers, however, worry that this may lead to inconsistent audience definitions (a publisher can, for example, define an audience very differently from a marketer). 

Seller-Defined Audiences cheat sheet

Thanks for reading our overview of customer cohort analysis solutions as we move towards an increasingly privacy-centric web. 

Read our previous installments:

• Part 1: It’s Not About Cookies, It’s About Profiling 
• Part 2: Facing the User Identification Problem
• Part 3: Rethinking Media Planning with Contextual Targeting and AI
• Part 4: Exploring Identity Management Solutions: 1st Party Data, Universal Identifiers, Data Clean Rooms

We’ll be wrapping up our deep dive into the cookieless world in our next and final blog post: Conversion Attribution Reporting and Closing Thoughts. 

FAQ

What is a cohort study?

A cohort study involves grouping online users based on shared characteristics or behaviors and tracking their interactions with online content or ads over time. This helps marketers analyze user behavior patterns, identify trends, and assess the effectiveness of marketing campaigns in engaging and converting different user segments.

What are the two types of cohort analysis?

In digital marketing, the two primary types of cohort analysis are time-based and behavior-based cohorts. Time-based cohorts group users based on the time they first interacted with a product or service, while behavior-based cohorts categorize users by their actions or behaviors, such as purchase history or engagement metrics.

How would you identify the user cohort for marketing?

To identify user cohorts for marketing, first define the criteria based on relevant factors like acquisition source, demographics, or behavior. Then, segment users into cohorts based on these criteria using analytics tools or customer relationship management (CRM) systems. Analyze each cohort’s characteristics and behaviors to tailor marketing strategies and campaigns to effectively target and engage specific user segments.

What is an example of a cohort?

An example of a cohort could be users who signed up for a newsletter during a specific month. By tracking this cohort’s engagement and conversion rates over time, marketers can assess the effectiveness of their email campaigns and tailor content to better engage this audience segment.

How do I access my Google Privacy Sandbox?

To access Google’s Privacy Sandbox, navigate to the relevant settings in your Google account. You can manage your privacy preferences and control how your data is used for personalized advertising by accessing the “Privacy & personalization” section in your Google Account settings.

Should Privacy Sandbox be on or off?

This depends on your preferences regarding personalized advertising and data privacy. Turning it on allows Google to use aggregated and anonymized data for ad targeting while maintaining user privacy. Turning it off opts you out of this feature, potentially resulting in less personalized ads but greater privacy protection.

What is a seller-defined audience SDA?

A Seller-Defined Audience (SDA) is a targeting feature in advertising platforms that allows sellers to create custom audience segments based on specific criteria such as demographics, interests, or behaviors. SDAs enable advertisers to reach highly relevant audiences tailored to their products or services, enhancing the effectiveness of their advertising campaigns.