The Taggesschau article Google stops personalized advertising from March 3, 2021 is explosive and makes the digital economy quake and tremble once again. Google is stopping personalized ads in search and elsewhere starting in 2022. Digital and marketing companies, as well as other advertisers, look shocked that suddenly the biggest player in the advertising world no longer wants to offer personalization. From 2022, this is to be terminated. But it’s not enough to be doing away with personalized ads, no, it gets even better: Tracking will also no longer be on a per-person basis, but only in groups of profiles. We as users are therefore no longer personalized individually, but are instead grouped into "profiles" with other users who behave similarly.
The perfect world in which advertising can be personalized and targeted is over. It's also fascinating that Google states they don't want to develop alternative tracking methods. This could, for a very, very short time, open a door for alternative providers. But beware for all those who are now looking for alternatives - in two to three years this will also be over - so be careful with medium-term decisions.
It’s not Google's "don't be evil” DNA that forms the basis for the swing in the business model, but rather the quite hardcore laws of the EU and increasingly the privacy ambitions of some US states. Already in 2019, Google has begun to capitalize and monetize its own services. Google's strategists have also realized that limitless tracking won't last forever. And, as you would expect from Google, they have been terrifically consistent. From my perspective, the end of personalization based on Google tracking without consent is over. The alternative providers that will still exist for a short time will hardly be able to develop such a reach and that in only a few years that the business model can still be operated legally. At the latest when the e-privacy regulation is ratified, that will also be over. Without opt-in, nothing will work anymore - well, at most the partially personalized use of rough user profiles will still be permissible, without concrete user reference. And already it becomes clear why Google will keep this as the only feature.
So it's not Google's pretextual and suddenly emerging privacy respect that is driving them to move away from tracking and personalization issues, but the increasingly stringent legal issues, both in the EU and globally. That said, I think it's fascinating how Google is taking advantage of its platform and the lock-in effect it's created to flip the business model. All platform builders and operators should take this as an example. And looking towards Facebook, even that platform has started to monetize users and platform via simpler mechanics than personalized ads. Let's just think about Project Libra for a moment, which is nowhere near as dead as they say. Or let's take a look at how Corona's Facebook and Instagram efforts were used to give a massive boost to social shopping. Payment via Facebook is just a little hop further. If it succeeds, and even if it's only once via PayPal, then Facebook no longer needs personalized, tracking-based marketing, since advertisers will voluntarily pay for service and other digital services. And the customer at the same time.
But there are two sides to every coin, in this case the e-privacy coin. In cooperation with the Esslingen University of Applied Sciences, we saw the opportunity in 2020 in a bachelor thesis and developed a business model that precisely addresses the measures from the e-privacy regulation in connection with cookie use and personalization. The model is mathematically viable and lucrative, just unfortunately not usable for every marketing venture. The main reason for this is again a lack of coverage or insufficient positioning. The only interesting partner or operator for our business model was Payback or one of the big Consent-Management providers. If you want to learn more about this, don't be afraid to email us.