A guide to Google FLoC’s: Build your first-party data with Lytics

The world of digital marketing is changing. With many ad platforms announcing plans to eliminate cookies, marketers that rely on third-party data are forced to transition to first-party data strategies to avoid revenue loss. Google’s 2019 study estimated that publishers’ digital ad revenue would be reduced by 52% on average without third-party cookies. Google’s Federated Learning of Cohorts (FLoC) is giving us our first look into the future of digital marketing campaigns.

“Google’s 2019 study estimates that publishers’ digital ad revenue would be reduced by 52% on average without third-party cookies.”

What is FLoC?

Google plans to phase out third-party data tracking in 2022 and transition to its new model: FLoC. Google’s proposed solution will allow marketers to target users with relevant ads by clustering them into cohorts—groups of browsing activity with overlapping behaviors and interests. The FLoC approach aims to give individuals more privacy on the web. Basically, it helps them blend into the crowd.

The impact of FLoC on digital marketing strategies

With the implementation of FLoC, Google will begin tracking user activity with its own first-party cookies rather than using third-party data. How will that affect your marketing strategies?

Google’s FLoC means that collecting your own first-party data will no longer be optional; it will be a core component of any successful digital marketing strategy. Marketers will have to start offering real value to their customers in exchange for their data.

While FLoC is causing an uproar in the marketing community, we believe that it’s a step in the right direction: First-party data should replace third-party cookies because it creates better customer experiences and optimizes your marketing efforts.

First-party data is more predictive of your customers’ behavior and preferences which leads to higher conversion rates and ROI for your marketing campaigns. Nestle Purina tripled its conversion rate and slashed its cost per conversion(CPC) by 90% in a Facebook ad campaign using first-party data captured by Lytics’ customer data platform.

How FLoCs will affect digital advertising

The practice for ad selection relies on third parties, such as advertisers, tracking users’ browsing data and device fingerprinting. With FLoCs, individuals’ names and browsing history will not be revealed to advertisers, publishers, or ad tech platforms. Users’ data will not be extracted or stored by FLoC services. Cohorts will be a grouping of browsing activities. This furthers the need for marketers to identify unknown users to provide them with relevant ad experiences.

Source: DevWeb

The marketer’s solution to FLoC: Leveraging first-party data

Following Google’s recent announcement about user privacy and third-party data, we’ve seen some concerns regarding the future of advertising without access to those cookies. Many Lytics users are already moving away from third-party cookies and leveraging their first-party data, and the results have been phenomenal.

Access to customer intelligence gave Industry Dive a clearer picture of who was engaging with their content. The result was a more than 40% increase in click-throughs that gave them a significant boost in new subscriptions.

Source: Lytics + Industry Dive Case Study

While Google’s FLoC solution to cookie-less advertising is still in the early stages and leaves some questions unanswered, there’s one thing that we do know: Marketers can utilize first-party data to give their customers the personalized experience they crave while respecting their privacy. A customer data platform(CDP) makes your first-party data actionable in your marketing automation tools so you can personalize your marketing at scale.

How Lytics helps brands personalize marketing at scale

With Lytics’s CDP, marketers can offer custom web experiences to visitors.

Lytics allows companies to:

• Avoid annoying visitors who already completed desired actions by hiding forms.
• Show users the right call-to-action based on their behavioral and event-based characteristics.
• Let eligible users know about a targeted sale or promotion.
• Keep audiences engaged by serving them content that is personalized to their browsing behaviors.

Start building a first-party data strategy now

Don’t wait until you lose access to third-party cookies and your advertising revenue drops—start building your first-party data right now. Collecting, analyzing, and leveraging first-party data will help future-proof your marketing strategies.

What’s the best way to gain first-party data from your customers? Encourage them to share it with you by giving them something valuable in return. Most digital consumers recognize that by giving companies information about themselves, they get more personalized offers and relevant content from the brand.

“ 73% of consumers are willing to share more data if a company is transparent about how and why it is used.”

Customers are much more likely to share their data with a company that’s transparent about how they track and use it. In light of the looming elimination of third-party cookies, digital marketers are taking the initiative and implementing new strategies to gain users’ information. By obtaining this information sooner rather than later, marketers and their brands will have a smoother transition once Google’s FLoC kills the third-party cookie.

Retargeting without third-party cookies

FLoC is looking to be a viable way to target groups of people with similar interests and bring in new customers, but many marketers are worried about its effect on their retargeting campaigns. However, we’ve seen many of our users utilize first-party data and Lytics’ integrations to optimize their ad campaigns and capture leads.

Using Lytics’ identity resolution to create intelligent audience segments, marketers can easily retarget their customers by personalizing and delivering lists directly to ad platforms based on customer behavior. You can identify inactive users and provide them with meaningful, personalized incentives to come back to your brand without the need for third-party cookies.

Identify and reach your high-value customers with lookalike models

Lookalike modeling is a way to share first-party data with an emphasis on individual privacy and is basically how Google’s FLoC forms its cohorts. Lytics users have already seen success from using lookalike models to set up predictive audiences and find users that share behaviors with their highest-value customers.

Google has troves of high-quality first-party data, and with the introduction of FLoC, marketers will have the ability to extend their reach by using that data to identify and target the people who share similarities with their best customers.

Because third-party tracking data will become much less accessible once Google fully implements its FLoC, marketers will have to rely more on first-party data to fuel their campaigns and reach the right users.

Watch how to leverage lookalike audiences on Facebook ads with Lytic’s Customer Data Platform

FLoCs and the future of digital marketing

The full implementation of Google’s FLoC and the shift from third-party cookies to first-party data is a matter of when not if. While FLoC has been a source of uncertainty for marketers recently, one thing is clear: It’s time to get serious about creating and leveraging a first-party data strategy.

Are you prepared for the future of digital marketing? Collect first-party data and reach engaged customers who are ready to convert with Lytics’ customer data platform— Watch the No More Cookies webinar on-demand to learn how.