October 4, 2022

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Google handles other people's cookies.  This hits Facebook's revenue model hard

Google handles other people’s cookies. This hits Facebook’s revenue model hard

Internet giant Google has announced additional measures to protect Android phone users from advertisers who follow them invisibly. This made the company Wednesday a favour

This change, which will be completed in the next two years, is a sensitive one. Google itself has a dominant position in the online advertising market, which makes it difficult for competitors to provide personalized ads. As an Android developer, Google itself has more options to track users and serve them targeted ads.

The apps you install on your Android phone can now easily follow user behavior, without them noticing. A new feature, “Privacy Sandbox”, aims to prevent this.

Advertising companies prey on a user’s phone data because it contains a lot of personal information – including a user’s location. Android is the most popular operating system on phones, with a global market share of about 70 percent. Apple’s iOS, the iPhone operating system, accounts for more than 25 percent of the market.

brakes on data flow

Apple introduced new privacy terms last year that provide a choice in advance whether you want apps to track them. Most iPhone users choose the “No” option. This affects Facebook’s revenue model, which means it is less aware of what ads users are seeing. The company announced earlier this year that Apple’s changes would cost Facebook at least $10 billion in revenue. The impact of brakes on data flow from Android may be greater.

Google says it wants to implement the privacy changes in a less “gentle” way, in consultation with competition authorities. “We want to make sure that we don’t favor our own advertising products,” wrote Anthony Chavez, who is responsible for privacy settings at Google Android.

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The company is under fire due to complaints of abuse of power in the advertising company. Google occupies all the strategic positions in the advertising chain: it runs the most popular search engine, auto ad auctions, the most popular web browser, the most used mobile operating system, and the largest video site (YouTube).

No more cookies

Changes in Android are accelerating fundamental changes in the digital advertising market. Stricter privacy rules will soon make targeted advertising almost impossible.

European regulators want to ban the use of the so-called Third Party Cookies for targeted advertising forbidden

Google, which is developing the Chrome web browser (70 percent of the market share), announced the end of this cookie years ago. Fluke, the technology that Google developed for this purpose, ended in failure. The intent was not to follow consumers individually, but on the basis of larger groups with the same interests.

This quarter, Google generated $61 billion in advertising revenue, primarily based on searches.

On the iPhone, Google is not affected by the restrictions imposed by Apple, because Google Search is the default search engine in the Apple browser. For this preferential position, Google pays Apple billions annually.

Google will face more competition in search advertising, especially from Amazon, which has developed an ad network for its online store. There, sellers can also promote their articles. Last year, Amazon generated $31 billion in ad sales.

Meta, the parent company of Facebook, is the other digital advertising superpower with quarterly revenue of $33 billion. Meta invests a lot in 3D technology. With its “metaverse,” an online 3D world, Meta hopes to make itself less dependent on streams of dried up data from Apple and Google’s mobile devices.