Google's New 'Topics', Ad Spend Increases and Social Commerce Wins | Moburst

Google’s New ‘Topics’, Ad Spend Increases and Social Commerce Wins

Jess Ailion | 31.1.22

Here’s your round-up of all the updates in the mobile and digital marketing sphere from January.

Google Introduces Topics to Replace FLoC Proposal

Google’s plans to phase out third-party cookies in Chrome are not new. However, Google first proposed Federated Learning of Cohorts (FLoC) as its post-cookies plan, and has now diverted to a new Privacy Sandbox option named Topics. Advertisers invested a lot of time into researching the implications of FLoC and how to best navigate it when it arrives. Now, this process will have to be repeated with Topics as they attempt to predict how the future of cookieless advertising will work and affect their industry. 

Topics is expected to be even less precise than FLoC, which was already less precise than the third-party retargeting of cookies. 

Topics appears not too dissimilar from contextual advertising, which isn’t new. Is this going to be enough for the industry which would thrive on new, innovative approaches? Especially given that it has only been introduced a few months before the industry is meant to begin transforming their services in preparation for the 2023 full cookie phaseout. 

The idea is that consumers will have preferences whereby they will be able to see and remove topics. Should they wish to, they can disable the feature entirely. 

The fear in the industry is that opt-in rates will be low, as has been the case for Apple after its recent privacy updates. The implications of this could be potentially detrimental to both big and small businesses alike. 

Why the change, though? Well, the replacement of the FLoC proposal with Topics indicates that balancing both privacy and personalization are a priority in the post-cookie era since Google is responding to raised concerns in bringing about this shift. 

Fortunately for businesses and advertisers, cookies don’t affect all in-browser advertising. Not included are social media, streaming video and audio, and paid search. This means that marketers have the chance to make these the central focus. 

US Ad Spending Grew 26% Year-on-Year in 2021. Global Mobile Ad Spending Grew 23% Year-on-Year

In 2021, US ad spending reached $436.3 billion, which was the industry’s strongest performance in ten years. This all happened in the run up to the cookie phaseout (Google plans to phase out third-party cookies in 2023). In light of this, the bulk of the ad spend will likely turn to first-party data collection and clean room solutions going forward, among other methods. 

Data clean rooms are services that enable different businesses to store their first-party data where it will be anonymized, aggregated and matched. They’re cropping up all over the place – even from the likes of Amazon. 

Meanwhile, global mobile ad spending hit $295 billion in 2021 and is set to reach $350 billion by the end of 2022, according to App Annie’s recently released State of Mobile 2022 report. 70% of the 3.8 trillion hours spent on mobile last year were spent on social and photo or video apps, with TikTok and Facebook unsurprisingly taking the lead. 

Social Commerce Expected to Beat E-Commerce

Accenture predicts that the global social commerce industry will grow three times faster than traditional e-commerce. In 2021, the industry was worth $492 billion, and is expected to reach a staggering $1.2 trillion by 2025. This impressive growth will likely be attributed to both Gen Z and Millennials, who together will make up 62% of global social commerce spend by that point. 

Businesses are continuously investing into the social commerce space to stay ahead of the curve, which is also a reason behind the rapid growth. It makes sense that businesses are diverting their attention to social commerce given the increasing amount of time consumers are spending on social platforms. It’s where consumers access everything, from their communications with friends and family to their news and entertainment. So why not commerce too? 

For clarification, Accenture’s report refers to social commerce as the integration of social experiences and e-commerce transactions in a single path to purchase, enabled by a platform.

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