FLEDGE: a privacy-friendly alternative to third-party cookies in Chrome

What to expect from FLEDGE

Written by Simon Harris, Trading Desk and Media Performance Director at DPG Media

Google will stop supporting third-party cookies in its Chrome browser. With its Privacy Sandbox, Google is working on a privacy-friendly alternative. Simon Harris shares his insights on the latest development in this area: FLEDGE.

When Google announced the Privacy Sandbox in August 2019, it was a set of proposals to replace third-party cookies in online advertising. At the time, it was ideas rather than ready-to-implement code.

Since then, we have seen counter-proposals from Independent AdTech companies, slow progress during discussions at the W3 Consortium, and little progress on real-life models that can be tested in the wild.

On January 1st, 2021, Google announced plans for its “First Locally Executed Decision over Groups Experiment”, or FLEDGE for short. The announcement on Github describes how they will operationalize TURTLEDOVE for a first test.

Primer On TURTLEDOVE

You’ll recall that for TURTLEDOVE, advertisers put snippets of code on their site that assigns users to an Interest Group; for an automotive company, you can think of Hatchbacks or SUVs, etc.

These snippets of code replace the third-party cookies that advertisers can no longer use. If a user is assigned to a given interest group, it will only be stored in their browser.

TURTLEDOVE envisages ad calls for these interest groups being sent at random intervals with responses stored in the browser. Publishers would then compare bids solicited when users visit their site against the best responses stored in the browser via an API. The browser would then serve the most relevant result, with results being sent back to the publisher ad server and DSPs.

The FLEDGE Documentation

The FLEDGE documentation provides significant detail on the key stages of the first TURTLEDOVE, including:

1. Storing Interest Groups and updating them
2. On-device auctions
3. On-device bidding
4. Ad Rendering
5. Reporting

Most likely, some FLEDGE processes will not make it into future tests (anyone for SLEDGE?) or the final version. Equally, there are likely features in future versions of the TURTLEDOVE, not in the first test. Indeed this is something called out in the Github documentation.

Storing Interest Groups In Browsers

Chrome will keep track of the interest groups it has joined, and it will store information about who owns the group and who can advertise to these interest groups.

Several types of companies may become owners, the most obvious is an advertiser or their agent. Here, TURTLEDOVE is likely used to cover In Category (read: remarketing) purposes, with FLoCs being used for general interest-based advertising.

Beyond advertisers, the FLEDGE documentation highlights that third-party adtech companies might own an in-market segment, or publishers might create and own an interest group of people who have read a certain type of content on their site. The FLEDGE documentation suggests some businesses would charge for the ability to target this list, so perhaps this is how data brokers will live on post the death of the third-party cookie.

The FLEDGE documentation highlights that a browser will remain in an interest group for a limited amount of time, 30 days, unless the advertiser makes another call to it again at a later date to keep the browser in a given group. It’s worth noting that Chrome will allow segments to be updated daily for interest groups with a sufficiently large number of people, e.g., at least 100 browsers.

Sellers Run On Device Auctions

The Fledge documentation tells us that sellers run on device auctions. It had recently been suggested that Chrome would randomly make ad calls as a user browses the web. Still, the FLEDGE documentation shows that a seller will initiate the auction by invoking a javascript API on the publisher’s page.

Invoking this API will cause the browser to execute the appropriate seller and buyer “worklets” in the browser to run an auction for interest Groups.

The on-device auction for interest groups will likely run alongside other S2S auctions, either contextual or powered by identity vendors like Liveramp or iD5. For IG ads, the seller decides:

1. Which buyer may participate
2. Which bids are eligible to enter the auction
3. What the score of each bid is.

The FLEDGE documentation is not entirely clear on how the first test bids on Interest Groups will be compared to auctions that are run outside of the browser or auctions for ads from other sellers for interest Groups.

In the long term, the consensus is that this will be done as per the original TURTLEDOVE proposal. The ad server will pass the winning ad to the browser via an API to compare the winning ad to the bids from the on-device auction for Interest Groups.

Bidding In On Device Auctions

Interest groups can be bid on by their owners and agents of the owner in on-device auctions that occur against standard auctions. When a seller sends the buyer a bid request for the on-device auction, they will:

1. Choose whether or not they want to participate in an auction.
2. Pick an advert and enter it in the auction along with a bid price.
3. Provide required metadata to enable the seller to score an ad.

The metadata accompanying the returned ad is not specified in the FLEDGE document, so sellers and buyers (owners of the interest groups and their agents) are free to establish whatever protocols they want here. This may be an area where IAB style open standards make sense long term.

Ad Rendering

When the Interest Group owner wins an on-device auction, the browser renders the winning creative within a Fenced Frame. This is a mechanism under development for rendering a document in an embedded context so it cannot communicate with the surrounding page. Another safety feature is Fenced Frames will not use the network to load any data from a server.

Reporting

When a winning ad has rendered in its Fenced Frame on the publisher’s site, the seller and the winning buyer each have an opportunity to perform logging and reporting on the auction outcome. Chrome will also provide losing bidders with information about the auction clearing price so they can use this information to inform their bidding.

The Future

We at DPG Media anticipate that auctions on devices for In Category segments will run concurrently with other auctions outside of the browser using existing RTB infrastructure. Think of contextual targeting, first-party data, and other Privacy Sandbox initiatives, like auctions around FLoCs which do not occur in the browser.

What makes sense from a monetization perspective will depend on the individual publisher. They will have to decide whether the loss of transparency — that the current TURTLEDOVE proposal suggests will occur — is outweighed by the benefit of incremental revenue. By adopting these different auction mechanisms, DPG Media will ensure continuity of effective media buying while guaranteeing ongoing privacy compliance.