Online advertising: CNIL prepares for changes in business models
The CNIL, with the announcement of the discontinuation of third-party cookies by Chrome next year, expects significant changes in the business models of online advertising.
The Authority commissioned two researchers from Télécom Paris to carry out a study on the economic and competitive implications of this development. The study was based on 25 interviews with advertisers, regulators and industry experts and reached important conclusions.
The Main Trends and Reactions
With the planned removal of third-party cookies, researchers have identified seven types of advertising solutions that may dominate. These solutions include Google's privacy sandbox, which allows users to be targeted by groups and interests, and six other alternatives. These alternatives use or generate different kinds of data, such as surrogate identifiers and contextual targeting.
Seven Alternative Advertising Solutions
- Privacy Sandbox: A Google proposal that allows users to be targeted through interest groups instead of individual tracking.
- Federated Learning of Cohorts (FLoC): A model that groups users based on their interests and allows ads to be shown to groups, not individuals.
- Turtledove: Ensures privacy by separating data collection and advertising processing.
- SPARROW: A model that combines the advantages of Turtledove's data protection with auction mechanisms for better ad management.
- Parakeet: Hybrid approach that combines data isolation with the integration of targeted advertising.
- Dovekey: Allows advertisers to select ads based on fuzzy attributes without access to individual data.
- First-Party Data Solutions: Focuses on using data collected directly from users through interaction with the advertiser's website or platform.
New Dynamics and Risks
The study showed that these changes will create strong competitive dynamics. Big platforms, with their advertising power, tend to define privacy protection as a ban on tracking users outside of their closed ecosystems. This could lead to greater reliance on first-party data, empowering advertisers who have access to large troves of data.
Privacy Protection and Financial Viability
The CNIL states that it will closely monitor developments, especially regarding compliance with data protection regulations. The study highlights the need for balanced solutions that will protect user privacy while supporting the economic viability of new business models. CNIL promotes cooperation with the Competition Authority to address these challenges.
Conclusion
The transition from third-party cookies to new advertising models will bring significant changes to the market. The CNIL, with the economic study it commissioned, seeks to prepare for these changes and ensure that the new business models are sustainable and protect the privacy of users. Cooperation with the Competition Authority will be critical in monitoring the market and ensuring regulatory compliance.
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