Looking Beyond the Cookie: The Rise of PETs in Modern Digital Advertising

Every click, every search, and every like — our digital interactions are leaving traces in a vast online realm. But what happens when the footprints we leave behind become commodities for advertisers?

Over the past 20 years, we’ve witnessed the digital world become an integral part of our everyday lives. It’s influenced everything from global economies to our daily habits. But this integration has a side effect: we leave digital footprints all over the internet. While these footprints might seem harmless on their own, they’ve become the backbone of the digital advertising sector. Brands and agencies rely on this data to track, monitor, and engage with their customers on an unprecedented scale.

MidJourney prompt: A panda that is concerned with his digital data. He is a cartoon panda.

However, while we’ve been busy embracing the digital age, we’ve overlooked one important aspect: responsible data management. This gap has led to issues like data breaches, misuse of our personal details, and more nefarious tracking and advertising methods. But handling data responsibly isn’t just about using it correctly. It’s about the entire process, from collection and storage to protection — Data Governance. If we don’t have this kind of approach, we risk our consumers’ data.

With companies like Google and Apple tightening privacy measures and the introduction of new privacy regulations, brands are now facing a dilemma. How can they function in this new environment that values privacy and still respect an audience that’s more aware of their digital privacy than ever?

That’s where Privacy Enhancing Technologies (PETs) come in. These technologies, combined with the right policies, offer a solution where we don’t have to sacrifice personalization for privacy. Let’s dive deeper into what PETs are, the challenges they face, and why they might be the future for digital marketing professionals.

What are Privacy Enhancing Technologies (PETs)?

Privacy Enhancing Technologies (PETs) empower brands to pinpoint their audience, tailor their messages, and assess their campaigns’ outcomes, all the while ensuring personal privacy is protected. Let’s delve into the key terms that define PETs:

• Differential Privacy: Think of this as blending into a large group where your unique identity melds into the collective, making you indistinguishable from the others. By sprinkling in some randomness to data, differential privacy cleverly blurs individual data, focusing on broader trends. Big players like Apple’s SkAd Network and Google’s Privacy Sandbox have adopted this approach.
• Multi-party Computation (MPC): Imagine a confidential group project where each participant contributes insights without revealing their source materials. Companies can pool their knowledge without sharing their secret sauce. This approach is at the heart of many data clean room initiatives.
• Homomorphic Encryption: Picture trying to solve a mystery wrapped within an enigma. Through homomorphic encryption, companies can work with encrypted data, drawing out insights without ever seeing the sensitive data in its raw form. It’s a game-changer in how we handle data security.
• On-device Learning: Just as the name suggests, this is akin to keeping your diary locked in a drawer at home. Your data stays put on your device, and specific computations are done right there, sending out only generalized, anonymous results.
• Synthetic Data: Think of this as a stand-in or double for real data. While it’s not the real thing, it mirrors the main characteristics closely enough for practical use. It’s like a replica, capturing the overall structure without using any real personal details. This technique is perfect for testing and analysis while keeping real user information out of the picture.
• Federated Learning: Envision a worldwide study group where each member learns on their own but shares their insights to enrich everyone’s knowledge. Devices learn and adapt on their own, but the generic learnings are pooled, refining a master model without touching individual user data.

So, how will PETs impact AdTech?

While many of these technologies have been in existence for a while, their adoption hasn’t become widespread in the digital advertising realm. When Apple scaled back on tracking with their App Tracking Transparency framework and SkAd Network in April 2021, numerous digital marketers shifted their focus and budget to Google — somewhat like an ostrich burying its head in the sand. The industry’s adaptation has been a slow burn since then. But with Google’s projected discontinuation of third-party cookies by 2024 (a timeline that feels realistic, for once), marketers and brands are delving deeper into the capabilities of PETs.

MidJourney prompt: A panda that is in a future with privacy-first digital advertising. He is a cartoon panda.

Here are some standout uses of privacy tech, often employing one or more components discussed earlier:

• Apple’s SkAd Network and App Tracking Transparency Framework: Apple has championed user privacy with these tools. SkAd Network offers campaign attribution without revealing user identity, while the App Tracking Transparency framework gives users a choice in their tracking preferences across third-party apps and sites.
• Google’s Privacy Sandbox for Web and Android: Google’s initiative seeks to establish privacy-centric standards for the web. It aims to arm publishers, advertisers, and developers with the tools essential for digital commerce, all while respecting user privacy.
• Meta’s Conversions API: Born from growing privacy constraints, Meta’s Conversions API lets advertisers relay web events directly from their servers to Facebook. This sidesteps browser-based tracking, resulting in a more reliable and secure ad performance measurement.
• Data Clean Rooms: These protected spaces enable data integration from diverse sources without giving either party direct access to the other’s raw data. Especially within retail media, data clean rooms are becoming popular, facilitating shared insights without revealing proprietary information.
• Unified ID Solutions: A notable instance is Trade Desk’s UID 2.0. They offer an alternative to cookie-based tracking with a focus on enhanced user privacy. It’s worth noting that discussions about the privacy implications and effectiveness of these solutions are ongoing.

These technologies, though promising, aren’t without their own challenges. But as tweaks and refinements occur, it’s clear they have the potential to balance consumer protection with the data needs of digital marketers. Remember, PETs aren’t here to mirror old tracking methods. The future demands marketers to be strategic, harnessing selective resources and data points, and, importantly, returning to the foundational principles of media planning and measurement.

What Can We Expect Over the Next 2–5 Years?

The next few years promise change and a digital technology landscape that is even more vast and interconnected than ever before. As we embrace and increase our expertise in PETs the interplay between user personalization and privacy is set to deepen. We’re transitioning into ‘conscious connectivity’. Users today, and certainly tomorrow, won’t just be hungry for tailored experiences. They’ll also have a heightened awareness and expectation of how their data is used.

• Consumer Control: The modern user, who is increasingly digitally savvy, will want more say over their data. This will push platforms to provide more detailed privacy settings and clearer data usage policies.
• Two-way conversations: It’s more than just data collection. Brands now have the opportunity to initiate meaningful dialogues. Leveraging platforms like real-time surveys, interactive content, or even community forums, brands can gather insights directly from their audience. It’s about mutual respect — asking consumers how they want to be engaged with, understanding their preferred channels and formats, and using that information to foster genuine connections. This proactive engagement will not only build trust but will also add depth to the brand-consumer relationship.
• Data Minimalism: We’re leaving behind the ‘collect it and forget it’ mindset, pivoting to ‘only collect what’s needed”. Brands will adopt a more selective data collection approach, focusing on what truly matters to enhance user experiences.
• Privacy by Design: With frameworks like GDPR and CCPA already in play, we can expect new tech innovations to have privacy considerations built into their DNA, rather than tacked on as extras.
• PETs Evolution and Integration: PETs aren’t static. I foresee them becoming even more intricate, maybe even joining forces with tech like Artificial Intelligence (AI). The goal? Craft intelligent personalization tools without compromising security.
• Value Exchange Dynamics: As our collective awareness of data privacy grows, businesses will need to spotlight the give-and-take nature of data sharing. Maybe we’ll see more loyalty schemes, unique content, or tangible perks for those who opt to share their data.

Conclusion

The intersection of technology and ethics is increasingly becoming a focal point in today’s digital landscape. As we stand at this juncture, the choices made by businesses, developers, and policymakers will shape the trajectory of our digital future. The emphasis here is clear: while innovation drives growth, trust ensures sustainability.

Just imagine: PETs seamlessly merging with AI and other breakthrough technologies, all in harmony. This integration suggests a future where technology not only enhances our digital experiences but also respects and protects our individual narratives in an interconnected world.