In a world where personal data fuels digital ecosystems and privacy concerns cast long shadows, Google is walking a fine line. With its latest feature—“Confidential Matching”—the tech giant aims to cater to advertisers’ thirst for precise targeting while safeguarding user privacy.
This new tool, leveraging advanced cryptography alongside Google’s vast data reserves, enables advertisers to match their customer data with the platform’s user base—without revealing any personal, identifiable details. The magic lies in confidential computing, a technology that uses Trusted Execution Environments (TEEs)—specialised software and hardware designed to isolate and encrypt business information during processing. This ensures that no one, not even Google, whose advertising revenue soared to $237.8 billion in 2023, can access the data being matched, offering an added layer of security.
“Measures such as Confidential Matching are intended to enable third-party businesses advertising on Google’s platform to use its measurement and audience solutions, without compromising on the privacy of their end customers,” says Karnika Vallabh, an advocate specialising in IP, TMT and data privacy.
For advertisers, the shift toward tools like Confidential Matching and similar franchise-style solutions means they’ll need to rely more heavily on first-party data collected directly from their customers, says Delphin Varghese, co-founder and chief revenue officer of AdCounty Media. For internet users — their potential targets — this shift offers relief from invasive tracking. With greater control over their personal data, users can expect a safer and more private online experience, where their behaviour is less exposed to intrusive monitoring.
The move comes despite Google’s decision earlier this year to abandon its four-year effort to phase out third-party cookies in Chrome (which commands around 65% of the global internet browser market), even as competitors like Apple’s Safari and Firefox have already moved to block their use by advertisers. Analysts suggest Google’s change of mind might have been driven by concerns over the market’s readiness and the lack of sufficient first-party data for precise targeting. Tests by ad platform Criteo, for instance, had revealed that publishers could face up to 60% revenue loss from Chrome if third-party cookies were fully deprecated.
Setting boundaries
So where does Confidential Matching fit in in Google’s scheme of things? Experts point to a broader trend toward a more privacy-focused digital landscape, where privacy is no longer a luxury but a necessity for today’s internet users. “As more privacy-oriented measures take centrestage, marketers will need to rethink how they collect, process, and utilise consumer data,” says Kamil Khan, CTO and director of affiliate marketing firm Sellergize. “They’ll be pushed to implement more transparent opt-in mechanisms, clearly disclose data usage, and set strict boundaries on data storage and third-party sharing.”
Advertisers, therefore, must prioritise building strategies around first-party data and adopting cutting-edge technologies for privacy enhancement, says Delphin Varghese, co-founder and chief revenue officer of AdCounty Media. Using tools like Confidential Matching could help achieve that.
Evolving privacy regulations like Europe’s General Data Protection Regulation (GDPR), the US’ California Consumer Privacy Act (CCPA), and India’s upcoming Digital Personal Data Protection Act (DPDPA) will place stricter controls on how companies collect and use consumer information. “For example, the DPDPA mandates that data must be collected for a specific purpose, used only for that purpose, and deleted once the purpose is fulfilled. Crucially, the responsibility for ensuring data protection—and the penalties for non-compliance—fall on the ‘Data Fiduciary,’ the entity that determines the purpose and means of processing personal data,” explains Vallabh.
Since it will be difficult for bigger players to track the various nodes through which data flows out in their system, including through the various “data processors” such as service providers, the market practices are moving increasingly towards data minimisation and encryption, she points out.
These are not the only steps that Google has taken to assuage privacy concerns around advertising. Yasin Hamidani, director, Media Care Brand Solutions, points to the Privacy Sandbox as one of the most significant measures, aimed at developing alternatives to third-party cookies while still enabling personalised ads. Another key feature is the Federated Learning of Cohorts, which groups users into anonymous cohorts based on browsing habits rather than tracking individuals. That apart, Google’s Consent Mode helps advertisers measure conversions while respecting user privacy by adjusting tracking based on user consent preferences.
All this will help build stronger trust with users, says Vinay Babani, vice president of operations at SRV Media.
However, the platform still has a long way to go. Ambika Sharma, founder and chief strategist, Pulp Strategy, says Google can look towards adopting frameworks such as Apple’s App Tracking Transparency, which emphasises user consent and transparency in data tracking. Techniques such as differential privacy and on-device processing used by other platforms can also be adapted to enhance privacy, and by processing data locally on the user’s device and only sharing aggregated information, companies can reduce the risk of exposing personal data, she says.
Net net, the tech giant has to evolve with the rapidly developing online advertising landscape. As governments worldwide implement better privacy laws, advertisers can no longer afford to take a reactive approach. “They must now build trust by ensuring transparency and giving consumers more control over their data. Privacy first isn’t just a trend, it’s the future of advertising,” concludes Ayush Nambiar, director, Flags Communications.