Google unveils 'Topics' cookie replacement after FLoC flop
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Google (GOOG, GOOGL) is overhauling plans for a key technology it had been developing to replace cookies, which are small browser files that track user behavior as they move around online. Advertisers and publishers rely on cookies to make money, as they give them the ability to display targeted advertisements based on relevant topics that interest a user. The term "cookie" was coined by web browser programmer Lou Montulli in 1994, based on the term "magic cookie" (like a fortune cookie), or a packet of information with an embedded message.


Backdrop: In 2019, Google (GOOG, GOOGL) announced that it would replace cookies in its Chrome browser with FLoC, Federated Learning of Cohorts. The tracking protocol was claimed to be far more anonymized, but still able to yield conversion rates of 95% for every ad dollar spent. The plans were found to be less effective and didn't pan out, and in July 2021, the company announced that Chrome would continue supporting third party cookies until at least mid-2023.
Now, Google (GOOG, GOOGL) is taking a second stab at altering the cookie landscape, replacing FloC with "Topics." The API works by pinpointing 15 baskets out of about 350 "topics" like "Fitness" or "Travel & Transportation," and is based on three weeks of browsing history (older topics are deleted). Advertisers will be able to see up to three topics per user, one topic from each of the past three weeks, and could then decide whether to show that individual an ad based on the web history.

Go deeper: While some have embraced a move away from "privacy-invasive tracking cookies," advertisers, website owners and publishers have cautioned that it may further limit competition in the advertising industry. They fear that the loss of cookies will make them more reliant on buying ads from Google (GOOG, GOOGL) and other tech giants because of their massive user databases, with Apple (NASDAQ:AAPL) also making privacy a selling point to consumers and unveiling its own changes last year. Complaints have also led antitrust authorities in the U.S., U.K., EU and elsewhere to closely follow the latest happenings in the industry.