Data Darwinism & IP Protection

Did You Know? Only 51% of marketers are prepared for the deprecation of 3rd party cookies, which is expected to happen by the end of 2024. (Source)

Staying ahead of the curve in the ever-changing marketing landscape feels like watching a nature documentary narrated by the irreplaceable David Attenborough.

In the lush undergrowth, a stirring of marketers gathers at the dawn of a monumental shift. The once clear paths carved by direct access to consumer data are now obscured by advances in both technology and regulation. Here, in this vibrant ecosystem, the air buzzes not with the calls of exotic birds, but with the fervent discussions of panicked advertisers seeking new strategies to ensure their mere survival.

Observe as the most adaptable marketers hone their instincts, tuning into the subtle consumer behaviors that flicker like shadows. They evolve, crafting new methods to engage their audience, respecting the dense growth of user privacy protections.

This isn't just change—it's a marketplace metamorphosis, demanding the resilience and adaptability seen in nature's most successful creatures to thrive.

In this digital jungle, only the strongest will survive.

This morning, Search Engine Journal published an article called “Google Testing IP Proxies: What This Means & How You May Be Impacted.”

The article breaks down an article published to Github over 6 months ago in October 2023 detailing a proposed strategy by Google—called IP Protection—to help prevent “covert IP tracking” of individual users.

More recently, Google published (or perhaps updated) their documentation about IP Protection in the Developer’s Privacy Sandbox.

Today’s edition of Data-Driven Marketing seeks to answer a few questions about Google’s proposed IP Protection:

1. Brief background on IP addresses

2. What is IP Protection?

3. Why IP Protection?

4. What are the potential impacts of IP Protection?

Let’s get started.

1/ Brief background on IP addresses

An IP address is a unique alphanumeric string that identifies your device’s connection to the Internet. Some devices have static IP addresses that never change. Others have dynamic IP addresses that change with varying degrees of frequency. IP addresses are used as device (and thus, user) identifiers.

Privacy protection features can obscure the IP address of a device used to connect to the Internet. Dynamic IPs offer more anonymity and privacy protection than static IPs. VPNs and IP proxy services offer even more privacy by intentionally obscuring a user’s IP address, often making it look like the user is browsing from a different country.

Fun fact: Technologies enabling this sort of anonymity are what power the dark web. Entire web browsers, like the Tor browser, anonymize everything you do online by routing, re-routing, and re-rerouting your IP address so that tracing your original connection is like peeling back the layers of an onion.

2/ What is IP Protection?

IP Protection is a proposal by Google to change the way user IP addresses are handled by Chrome. With Google’s proposed IP Protection measures, Google will use two proxies to mask your IP address when using the Chrome browser:

1. Proxy 1: When you pull up Google Search, your real IP address will be converted to a fake IP address, and this fake IP address is what actually makes your search request.

2. Proxy 2: When your search results are returned, your real IP address will be converted to a different fake IP address, and this second fake IP address will be used to browse your target website, so that website only sees your second fake IP address.

That places crucial barriers between who you are, what you’re searching for, and the sites you find as a result of your search.

As for timeline, Google’s Privacy Sandbox documentation states, “IP protection won’t launch as a default setting for Chrome users before 2025.“

3/ Why IP Protection?

Google's initiative to work on IP Protection, particularly the efforts to mask IP addresses, is largely driven by broader trends in Internet privacy concerns and regulatory pressures.

GDPR, CCPA, and other regulations continuously force companies to minimize and obscure personal user data. It’s in Google’s best interest to work with regulators to ensure compliance with both current and potential future regulations.

Beyond legal requirements, consumer awareness of and sentiments toward increased privacy help shift big tech giants like Google toward more privacy-focused products and services.

4/ What are the potential impacts of IP Protection?

Let’s look at what this means for two groups:

1. Advertisers

2. Users

Impacts for advertisers

For advertisers, more user anonymity generally means decreased targeting abilities, and that means more inefficient (and more costly) advertising campaigns.

All of this IP masking also makes it harder to detect and prevent click fraud in advertising campaigns. It’s likely that more sophisticated, AI-driven machine learning tactics will need to be developed to prevent bot-driven attacks.

Geotargeting is one of the biggest concerns, as Google is likely to aggregate smaller, more targeted geographies into much larger, more general geographies.

Here’s what Google’s Github post says about defining and dividing geographies in an IP Protection world (emphasis mine):

If I’m reading that correctly, advertisers might only be able to target ~700 geographic areas. I don’t know exactly how many there are now—the CSV file available here shows 194,956 distinct geos, but many clearly are aggregates of multiple smaller geos—but that ~700 figure definitely is much more restrictive.

Case in point: The Search Engine Journal article inspiring today’s email mentioned Boston, specifically. Boston has a population of around 650,000 people, which is larger than the “470,000 people per geo on average,” but not by much. That indicates Boston might be broken into just two geos.

That differs dramatically from the current state. Consider this very grainy map of Boston ZIP codes:

I count at least 19 different ZIP codes, each of which you can target right now using Google Ads.

If IP Protection eliminates all of that granularity, advertisers will have to change how they target their ideal customers. Search Engine Journal proposes using more targeted exclusions. They’re probably right.

And this type of targeting roll-up likely won’t just affect geographies. You can expect similar difficulties when targeting specific interests, shopping habits, industries, and more.

Impacts for users

Users generally like the idea of privacy and protection. I know I do, so I won’t try to argue that all of this privacy protection is a bad thing. It isn’t. It’s a good thing for users.

However, there are downsides to this kind of anonymity:

• Users will see less relevant (and probably more annoying) advertising.

• Personalized feeds likely will become less accurate.

• Services based on geotargeting might face serious challenges.

As for that last case, consider this example described by an article on AdMonsters about services that need to adhere to different legal requirements in different geographies.

A personal example: I’m a big fan of those daily fantasy sports contests you see advertised literally everywhere. I love entering contests on NFL Sundays and then kicking back for 8 hours watching 13 different football games (thanks, NFL Red Zone!) while my friends and I collectively freak out in our group chat.

Me when some obscure player on a team I don’t follow scores a touchdown with 37 seconds left in the 4th quarter of the last game, propelling me to victory:

Each state has different rules and regulations about entering these types of contests as shown in this map:

If it’s more difficult for these types of services to pinpoint where a user is, then those services will start blocking those users from accessing these services. Speaking from experience, that can be supremely frustrating!

Other potential examples:

• Services like YouTube TV, which allow you to declare a home region and often blackout content based on that home region, your current geography, or both.

• Both streaming and general content services that depend on geography for content localization.

• Rideshare and food delivery apps that pair users with drivers in their area.

• Location-based apps and mobile games.

And probably a lot more.

Don’t get me wrong—expanded privacy protections are a big win for users—but both for marketers and consumers will have to adjust to the changing landscape.

Then again, that’s always been the case.

It’s just another example of survival of the fittest.

Everyone say, “Hi!” to Maggie J 👋

Question: What’s the most random fact you know?

Maggie J’s Answer: “Cleopatra lived closer in time to the Moon landing than the construction of the pyramids. Time is freaking wild!“

Editor’s Note (from me, Bryan): I check this and yup, it’s true! Cleopatra was born around 69 BCE and died in 30 BCE, so right around Year 0. The Great Pyramid of Giza was built by Pharoah Khufu, who reigned from 2289-2566 BCE, so this fact checks out.

ChatGPT-Generated Joke of the Day 🤣

What did one eye say to the other eye?

Between you and me, something smells!

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