PPC – Early trials show that Google FLEDGE is flopping
Google began testing FLEDGE in AdSense in August but after just four months of trials, it seems to have gone stale, with only only RTB House, Criteo and Google itself using it in any meaningful way.
Ad tech companies aren’t using it because it’s unknown. It’s an expensive test that could prove catastrophic if it fails. As Digiday reports, “No one can afford to be first, especially when there are so many unresolved issues.”
What is FLEDGE. FLEDGE stands for First Locally-Executed Decision over Groups Experiment. FLEDGE is a Privacy Sandbox proposal for remarketing and audiences. It’s designed so that it can’t be used by third parties to track user browsing behavior across websites.
FLEDGE issues. A few reported issues of FLEDGE, and the main reasons keeping ad tech companies from using the technology are:
- FLEDGE only handles the retargeting part of performance advertising. So marketers won’t know if the users who saw a retargeted ad converted, as that’s a whole other workstream from Google
- There are also no proper reach and frequency controls
- Based on the current specifications for FLEDGE, it would seem that there’s one gatekeeper, and to no one’s surprise that appears to be Google
What ad tech companies are saying. Companies skeptical about FLEDGE had a few things to say on why they may be skeptical to test the new tech.
“While we are closely monitoring the progress of FLEDGE, we are not actively testing FLEDGE because we have not encountered much customer demand for testing, and it remains a single browser solution. Also, FLEDGE is a remarketing use case that advertisers use to drive conversion, as opposed to awareness. As such, testing the measurement of advertiser conversions should be coupled with FLEDGE.”
“From what we are seeing and hearing on FLEDGE there is a very limited focus and no one is showing high volumes and performance yet,”
Rob Webster, global vp of strategy at digital marketing consultancy CvE
But not all feedback on FLEDGE is negative.
“So far we are pleased with our progress because we’ve seen improved effectiveness on our device deep learning algorithm for FLEDGE. We plan to add additional complexity to our tests, which means working to improve the integrations with publishers and supply-side platforms and eventually get to a point where we can support a fully programmatic auction inside the FLEDGE environment.”
Lukasz Włodarczyk, vp of programmatic ecosystem growth and innovation, RTB House
Google’s influence. Digiday reports that Google’s influence over FLEDGE is a controversial one. For FLEDGE to work, it needs to take an input of the winning bid from an auction overseen by Google Ad Manager (Publisher’s Ad server). In this scenario, Google picks the final ad. This way, publishers and their ad tech partners can’t disintermediate Google. That changes if FLEDGE API on-device top level auction picks the final ad and when Google Ad Manager participates as equivalent participant in component auctions. Put simply, FLEDGE is predicated on auction decisions happening in the Chrome browser that Google owns — something that could have a material impact on how much money SSPs make.
What Google says. “We’re encouraged by early integration testing from companies like RTB House and by the enthusiasm from publishers to move their inventory to a privacy-preserving supply chain. As we ramp tester integrations and origin trial sizes, we look forward to continued industry input this year on the functionality of the APIs and next year on performance. Our new timeline accommodates for this phased approach and provides time to make adjustments to improve the privacy and effectiveness of the APIs based on the results from testing.”
A long way to go. Google’s FLEDGE has a long way to go to fix its issues and get ad tech companies on board. Companies need to see how much progress and traction they get with FLEDGE before adopting the tech, but for most, the downside is too risky.
Why we care. Publishers who use an ad-tech platform like Criteo may have received a notice that FLEDGE testing was in progress. But for most advertisers and publishers right now, there isn’t much to do. It will be interesting to see if by 2024 the FLEDGE API is ready to launch globally as cookies are (scheduled to be) sunsetted.
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