Google has been quietly rolling out a program that allows publishers to use encrypted advertising identifiers in their online advertising transactions while the search giant phases out such tracking tools in other parts of its business.
The program is called Encrypted Signals for Publishers, and it allows websites to work with online advertising identifiers in Google’s ad platform in the post-cookie era. Ad tech executives said encrypted IDs could be a lifeline for publishers in programmatic advertising, which is the way many websites deliver ads to visitors who often show up to their sites without logging in or otherwise identifying themselves. Google has been experimenting with a slew of new tools to replace cookies and other forms of online IDs, which have been the bedrock of programmatic advertising for more than a decade.
Encrypted signals is a way for publishers to work with their preferred ad technology partners in Google Ad Manager to swap data through a secure back channel. The encryption prevents data from leaking.
“Because of publisher pressure, they launched this program, which enables publishers to share their ID with buyers,” said Mathieu Roche, CEO of ID5, one of the digital ad ID companies that is starting to test encrypted signals this month.
Publishers are worried new internet privacy rules could blind their ad targeting systems and decrease the value of ads. ID5, LiveRamp and OpenX are a few of the ad tech companies experimenting with Google’s encrypted signals.
Deepti Bhatnagar, director of product for Google Ad Manager, said that over the past several months the ad platform has been expanding some of the capabilities for publishers to use their data in programmatic ad auctions. “It’s no secret that third-party cookies are going to be deprecated and in general I think there is a lot of emphasis on privacy,” Bhatnagar said. “Ad Manager is working to support publishers once these cookies are deprecated.”
The encrypted signals is one of those initiatives that lets publishers use their data to work with ID providers and ad buyers. “We want to make sure publishers who have trusted relationships with their users are able to use that data in order to monetize it,” Bhatnagar said.
Bhatnagar said publishers use the encrypted signals to pass along data to bidders in internet ad auctions in a way that Google never gets to see that data.
The encrypted ID program rolled out on a small scale last year, when Google started allowing publishers to work with them in direct ad deals. Programmatic direct is when a publisher knows exactly who is buying the inventory ahead of time, and the IDs are used to reach the right customer. The program is expanding to the open web, so publishers can send data signals to more exchanges to find ad matches for their audience. Publishers share their IDs with ad exchanges like OpenX through Google Ad Manager.
“It’s a nuanced message,” said Travis Clinger, senior VP of addressability and ecosystem at LiveRamp. “I don’t think Google is anti-ID, Google’s point is publishers have the right to use IDs.”
Google is eliminating third-party IDs and cookies in its Display and Video 360 demand-side platform, which mostly affects advertisers online. The encrypted IDs are on the publishing side, the sell side, of the equation.
On Github, the online developer forum, the programmatic ad network OpenX said it was testing Encrypted Signals for Publishers, “which allows OpenX to send encrypted signals directly from the page to our server-side bidder,” said the post from July. “For the pilot we will test with our 3rd party cookie.”
“In the future, if the pilot becomes generally available, we will expand the amount of signals we can support to improve match rate of other identifiers,” the post said.
Match rate is a measurement of how successful publishers are serving ads to the intended target audience. The match happens when ad identifiers—a cookie or other ID—connect buyers and sellers in internet ad auctions, which occur behind the scenes every time a visitor loads a web page.
Google is conducting other data experiments, too, within an initiative known as Privacy Sandbox, which is a series of new standards that the company is creating to move beyond cookies and third-party IDs. Google wants to implement stricter privacy controls within its ubiquitous online advertising ecosystem, but it also has to be careful not to create an advantage for its own business.
“They realize that this strategy has limits,” Roche said, “especially because for the rest of the world, identification is very important, especially for publishers.” When publishers can identify users, their ads are worth two to three times as much, he added.
Google has said it will kill third-party cookies in Chrome web browsers by the end of 2023. The move will affect the types of data websites collect when viewers visit through Chrome. Publishers have already been dealing with similar changes to Apple Safari and Mozilla’s Firefox browsers.
Google is a dominant force in internet advertising, generating $209 billion in ad sales in 2021, making any changes to its platform consequential for publishers, ad tech partners and advertisers. Google is both a buyer and seller of programmatic ads, and it provides software that millions of websites use to manage their ad inventory.
There have been concerns from regulators in the U.S. and Europe that as Google applies new privacy practices, it could disadvantage ad tech rivals and publishers. Google has access to its own vast trove of data, while privacy changes could constrain the performance of competitors.
It is a tough predicament though for Google, because it also has to adjust to changing attitudes around online privacy. The overall programmatic ad business has taken heat for exposing people’s intimate internet profiles to third-party companies.
“Google is being pragmatic,” said an ad tech CEO, who spoke on condition of anonymity, because the program was still too nascent to discuss publicly. “They said no IDs, but they are experimenting with tools for buyers and sellers that can work in the future.”