The opportunity and challenges moving from FLoC to Topics

Scott McCarthy
By Scott McCarthy | 25 February 2022
Scott McCarthy

Scott McCarthy is head of programmatic and brand media at Alpha Digital

We’ve known for a while that Cookies are on their way out. And so too now is its replacement. FLoC had its issues around privacy for users, and was not a particularly popular alternative for advertisers given the process for getting assigned to cohorts was unclear, and which cohorts would exist was even more unclear.

Google has announced its demise and is eager to talk up its updated digital marketing framework, Topics API. Industry veterans have already weighed in with their reactions to highlight some of the issues which still remain unanswered. I wanted to discuss some of the opportunities we’re discussing with clients, along with some challenges which at this point remain unresolved.

Failure to prepare…

Brands should already be preparing themselves to look beyond demographical data points to build their high value audience segments. (If you haven’t started this, then it’s time to hit the mild panic button as you’ll need to start ASAP.)  Google's move from FLoC to the new Topics API doesn't necessarily change that point. 

To be successful, you need a crystal clear view on what topics your brand is trying to be known for, but also what kind of topics your audience loves that you can align yourself with. Topics, in this context, is Google's amended affinity targeting, allocating three topics to each unique user based on which websites they've visited over the last three weeks. These are not always in the same category or domain. You could have a dog lover who also is a sports nut; competition could be the key trait which is shared among their passions. 

Though in its current state Topics will be grouped at a domain level, future iterations are likely to take into account other website signals such as keyword & content, meaning the accuracy of a user’s topics will increase. It’s unknown how Google will assign topics, and whether websites can influence this if they are spread across multiple topics. 

Depth of targeting is changing

There is no getting around the fact that the initial depth of targeting marketers are currently used to, will be changing. We’ll be going from millions of disparate data-points that travel stuff you don’t know about yourself yet, down to a comparatively lighter core list of 349 topics. Now depending on who you ask, this can be good or bad. 

The argument for…

The Byron Sharp enthusiasts of the marketing world will relish the shift away from granularity with digital targeting. Brands that have previously relied on ultra-strict targeting profiles will now have to zoom out to much, much broader segments. This will mean consumers are getting exposed to brands that they would otherwise never hear from, and brands may see growth in lighter consumers or consumers yet to enter the market. 

The argument against…

It also follows that with a restricted number of targeting segments available, no doubt a few (like "credit cards") will become the only option for advertisers in categories that are spending millions of dollars on digital advertising. Competition will undoubtedly be increased and as a result this will invariably push up CPMs as everyone scrambles to hit the same audience. 

It will put more reliance on sharper minds to plan for how to reach the audience that you’re looking to target. The old ways will no longer cut it. So it’s time to start thinking creatively about your approach and also plan for how to manage your comparative reporting when marketers still have access to both targeting methods, assuming there is a suitable transition period to begin testing. 

Thinking 1st party first

It’s a message which is not new, but is of increasing importance with this change, your owned first party data is a crucial piece of the puzzle. It’s never been more important, nor can this message be understated, to focus on building your consumer database technology and fleshing them out with as many signals as possible. For the smaller brands, it may not be cheap - but it will be worth it.

Outside of the challenges above, it’s fair to say that for many brands this move will even the playing field in the prospecting space. Those that are still in their digital infancy can catch up pretty quickly when there's only a few options for targeting. For more digitally mature brands, we lie in wait to understand the potential impact in actually activating 1st party data within the Topics API data ecosystem.

We’ve still got at least 12 months to plan for this change, but the opportunities for the brands who are prepared are still there. We’ll wait and hear more about the timings of implementing this new approach, but marketers will be wise to do as much as possible ahead of time, to make the switchover as seamless as possible. 


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