The new encoder is called Guetzli - Swiss German for "cookie", apparently - and according to Google, it can create "high quality JPEG images with file sizes 35 percent smaller than now available methods". This will enable webmasters to develop webpages that can load faster while using comparatively less data. Guetzli is the Swiss German word for "cookie", and the Guetzli project was led by Google Research's Zurich office in Switzerland.
Images pushed through the Guetzli encoder are still available in a regular JPEG format, making them compatible with just about every application and browser now on the market. Per the example below, the uncompressed image is on the left, libjpeg-shrunk in the center and Guetzli-treated on the right.
Guetzli employs a search algorithm that tries to overcome the difference between the psychovisual modeling of JPEG's format and Guetzli's psychovisual model.
"The visual quality of JPEG images is directly correlated to its multi-stage compression process: colour space transform, discrete cosine transform, and quantization", wrote Google. Images created by Guetzli are on average 35% smaller than those from the current industry-leading encoders. Other methods mostly get the job done by leaving out minor details, while Guetzli compresses the image without compromising on the quality. Another upside is that the transition to using Guetzli will happen quietly in the background without any disruption to that next image search you perform looking for cute cats. That may seem like a deal-breaker but because of how well it performs in the quality department, Google feels the slower compression time is a worthy trade-off.
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Speed is everything on the internet, and as a general rule of thumb: the smaller the file, the faster it'll load. Right: Guetzli. Google claims that Guetzli has fewer artifacts without a larger file size.
The only downside to Guetzli is that it's slower to encode JPEGs than with libjpeg. Alternatively, it's now possible to significantly improve the image quality of a file without raising its size.
The downside to this methodology is that compression takes significantly longer than now available methods.
As you can see, the new encoder fares better than libjpeg, although, as we said above, it needs more time to produce results.