Chrome’s IP address protection initiative presents new challenges for marketers

Google is preparing to test a new feature in Chrome that will allow users to hide their IP addresses by using proxy servers. Initially this will be an opt-in feature like Apple’s Ask App Not to Track. The concern is that IP addresses, like cookies, can be used to track online activity and create persistent user profiles. The logic is that, if cookies are a threat to privacy, IP addresses are too.

IP address protection is nothing new. Just as they have already deprecated cookies, browsers like Firefox and Safari already have some kind of protection in place. But given Chrome’s domination of the browser market, the move will have a significant impact, not least on marketing.

Google is moving fast. Although it’s not the first to offer IP address protection, “Google appears to be going harder than most of the big players,” said Aaron Grote, VP of digital products at data-driven agency Stirista. As for the time it is taking for Chrome to resolve the cookie issue: “We’ve seen part of that being from regulatory attention. What I’ve noticed is that none of that seems true for IP protection. Regulators seem to not view that kind of work as being anti-competitive.”

Despite what Grote called “the accelerated loss of identity signals,” he didn’t foresee new kinds of impact on marketers. “As people are losing cookie signals, especially on the iOS side, we’ve learned to either suck it up and deal with it, or find alternatives.” Nevertheless, he emphasized, this isn’t a move by Apple or by niche browsers. “This is rolling out to Chrome. That’s huge, and it’s not a thing people are used to dealing with.”

It will also be disruptive for some of the solutions that present alternatives to cookie-based identity resolution. “A lot of the identity-based solutions people have moved to in order to mitigate the impact of cookie constraints are definitely incorporating IPs, at a minimum.”

Another challenge for B2B. Account based marketing has, in the past, relied heavily although not exclusively on matching IP addresses to target accounts. It’s one way to track intent as users of an IP address associated with a certain organization browse and download content. The efficacy of this approach took a hit in 2020 as business users dispersed and began using IPs associated with their home devices rather than corporate networks.

We asked Chris Golec, founder of Channel99 (and formerly CEO of Demandbase) if this move by Google presented fresh problems. He saw virtue in a limited use of IP protection. “The spirit of using proxy IP’s for increased privacy is in the right direction as long as it is focused on the bad actor domains tracking IP’s.     If, however, it bleeds across to all domains and impairs personalization, targeted ads, and other useful functionality offered by ABM providers, it could certainly present new challenges.”  

He also pointed to the range of challenges IP address use already faces, such as the use of VPNs, the fact that many company IP addresses are concealed by ISP providers, and of course remote working. But he also sounded a note of optimism: “The B2B sector has always found solutions in privacy friendly approaches.”

“ABM has always been noisy and difficult,” said Grote. “In some ways, it was so difficult already that this really doesn’t matter.”

Why we care. Personalization is about to get harder. Those solutions that present non-cookie-based identity graphs are about to have another tool removed from their toolkit. With many iOS users opting out of being tracked by apps, one has to presume many will opt in to IP protection (if it’s made easy to do so).

Marketers continue to be torn between patching together personalization techniques using a mix of solutions and largely abandoning it in favor of some flavor of contextual advertising.