Google’s Confidential Matching: For privacy concerns or to calm regulators?

Even as Google heads back to the courtrooms for a second time with another antitrust trial, this time around for its adtech practices and dominant role in the rapidly growing sector, the global tech giant said last week that it will be introducing Confidential Matching to its advertisers.

In a Google blog announcing the update, Kamal Janardhan, Senior Director of Product Management, Measurement, wrote, “We're introducing confidential matching, a new way to securely connect your first-party data for our measurement and audience solutions. This marks only the first use of confidential computing in our ads products, and we plan to bring this privacy enhancing technology to more products over time.”

Confidential Matching falls under a family of techniques and technologies used to match user data from different sources without exposing or directly sharing sensitive personal information. This is particularly relevant in digital advertising, where advertisers and platforms want to target users without violating privacy regulations, a concern that has increasingly come to the forefront of digital policy issues around the world, as exemplified by the spate of new laws concerning the same.

Saurabh Gupta, CEO and Founder of VeriSmart AI, says, “Google's Confidential Matching is one of their alternative attempts to fulfil their responsibilities, particularly in light of their failure to successfully ban third-party cookies . The Trusted Execution Environment (TEE) used by Google for storing passwords and other sensitive information will now extend to the adtech industry, helping businesses achieve privacy-compliant hyper-personalization.”

Janardhan emphasized Google's commitment to accessibility and collaboration in her blog post, writing, “In line with our privacy principles, we're committed to making confidential computing and other complementary technologies accessible to everyone. That is why confidential matching will be available at no additional cost to customers. Also, we're sharing our TEE architecture along with a few open-source examples to help others build confidential solutions. We're continuing to work alongside others in the ads industry to further adopt and build standards for this privacy enhancing technology.”

Gupta highlighted potential concerns and the importance of data quality, saying, “The effectiveness of this feature will largely depend on the quality of an organization's first-party data—specifically, how it was collected and whether user consent was obtained. There is a concern that many first-party platforms may begin trading data outside of Google's platform, potentially without user consent, in an effort to maximize audience matching for ad delivery and measurement.”

Given that Google leads digital advertising and is under legal scrutiny for its allegedly outsized role in global advertising, it could be argued that Google introduced the new technology just as it is in the process of fighting antitrust and anti-competition lawsuits as a means of ameliorating accusations around data and privacy.

The tech titan finds itself in a situation much akin to Microsoft's legal troubles from the 1990s, or even the downfall of Rockefeller's oil barony during the beginning of that century. Data is indeed the new oil, and how Google manages this resource will likely shape the future of digital advertising and privacy.

An anonymous adtech expert commented on the timing to this reporter saying, “It's interesting that Google happened to introduce Confidential Marketing just as privacy regulations come increasingly under scrutiny around the world. It's totally a coincidence of course, but a convenient one. It's also worth noting that similar technologies have been introduced by other companies earlier. With Google now introducing them, it could be a strong indicator that the industry is taking privacy and data regulation truly seriously.”

Google has already offered shared audience functionalities on Google Ads and DV360, where encrypted data is used for audience matching. However, this has been limited to large organizations and agencies. The introduction of the Confidential Matching platform could streamline and enhance this process, making it a default feature across all key ad tools and data management systems, according to Gupta.

He explains how the new platform leverages Google's existing infrastructure, observing, “This platform will also leverage Google's cloud infrastructure and managed services, such as Confidential GKE (Google Kubernetes Engine) and Confidential Virtual Machines (CVM), as part of a binding product module. These services will likely encourage organizations to adopt more privacy-compliant processes when sharing first-party data with Google's Confidential Matching platform.”

While experts anticipate significant improvements in ad-targeting performance, he believes the process of linking first-party platforms with Google will become more streamlined and privacy-preserving. It is assumed that brands and advertisers using Google Cloud might find it easier to adapt to Confidential Matching due to existing end-to-end managed services with hardware and software-level encryption.

As Google continues to navigate the complex landscape of digital advertising, privacy regulations, and antitrust scrutiny, the introduction of Confidential Matching represents a significant step towards addressing privacy concerns while maintaining its dominant position in the adtech industry.