According to a study by Pew Research Centre, 72% of consumers believe companies track practically everything they do online and 81% believe the risks they face as a result of that data-gathering exceed the benefits.

One method businesses use to gather consumer information involves cookies — small pieces of data created by a website and stored in the user’s browser. Cookies are used to track website visitors, improve user experience and collect information that helps deliver ads to the right audiences. Companies also use them to find out what consumers are looking up on the Internet when they aren't on their sites.

Cookies that are set by a website other than the one you're currently on are called third-party cookies. An example of a third-party cookie: A business adds a Facebook "Like" button on its website that stores a cookie on a visitor's computer; Facebook then uses that cookie to identify that user and follow which websites they visit afterward.

In a potentially significant shift, Google is planning to phase out the use of third-party cookies on its Chrome browsers by the end of 2023. According to a 2020 post on the Chromium Blog:

“Users are demanding greater privacy — including transparency, choice, and control over how their data is used — and it’s clear the web ecosystem needs to evolve to meet these increasing demands.”

Chrome won’t be the first browser to eliminate third-party cookies, but it is by far the most popular. Google Chrome accounted for around 65% of the web browser market in late 2021, and it’s responsible for more than half of all web traffic worldwide. Its phase-out of third-party cookies is likely to have a large impact on how companies use cookies as well as Google ad-tracking tools. (Safari, Edge, and Firefox — which have been blocking third-party cookies for several years — stand in second, third, and fourth place, respectively.)

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Transition from Federated Learning of Cohorts (FLoC) to Topics API

Federated Learning of Cohorts (FLoC) was developed by Google as a way to track users by grouping people with similar interests together (football fans, truck drivers, retired travelers, etc.). It was meant to protect consumers’ privacy by putting them in a crowd of thousands of people with similar browsing activity.

Recently, Google unveiled a new way to facilitate interest-based advertising that addresses the elimination of third-party cookies — Topics API. (API stands for “application programming interface, which is a software intermediary that allows two applications to talk to each other.)

The goal of Topics API is to provide callers (such as third-party ad-tech or advertising providers who execute an API script) with advertising topics the visitor might be interested in. These topics can be paired with contextual signals from the current page to discover or create an appropriate advertisement for the visitor.

For example, the browser might determine the topic based on site’s host name — dogs.com would be categorized under the “Dogs” topic. Companies also may have the option to tell Google which topics to associate with their sites.

The idea is to track users anonymously and fulfill Google’s four main privacy goals:

1. The technology must make it "difficult to reidentify significant numbers of users across sites using just the API."
2. It should offer a viable replacement for "a subset of the capabilities of third-party cookies."
3. Any recorded data must be "less personally sensitive" than what is being collected today.
4. The API should be understandable to users and transparent in its intentions.

How Do Topics Work?

Google Topics analyzes a user’s browsing history over the previous three weeks to determine areas of interest (older information is deleted).

When a user visits a website that uses Google's Topics API, that website will be assigned an overall category. A website on golfing, for example, might be placed in the "sports" category, while a newspaper article would be assigned to the "local news" category.

Based on that history, Topics chooses three interest areas to share for advertising purposes — one from each of the previous three weeks.

Google plans to add settings to Chrome that will allow users to see their topics, remove topics or turn off the feature entirely.

It's worth noting that Google's current plan for Topics is limited to one channel (the Chrome browser) and won’t apply to the many other ways people access the Internet.