‘Enhanced Conversions’ vs. 1st-Party Algorithms
Data Privacy Day — January 28th, 2024.
The perfect day to figure out once and for all your growth plan post-3P Cookie.
Should You Mourn The Death Of the 3P Cookie?
You might think that you — like everyone you hear about — celebrate the death of the 3P cookie. The core issue identified has been it’s cavalier abuse of customer data collection without consent. Let’s examine that further.
Most marketers run programs aimed at driving conversions (i.e. 75% of all digital marketing investment globally). They get that conversion data thanks to 3P cookies. But you might be surprised to find out that 3P Cookie-Driven Conversion Data doesn’t require customer PII to be passed to Ad Platforms at all.
In the diagram above, note the lack of customer PII sent back to the Ads 3P Cookie, and how the Conversion Data only requires order details and the ads click id to populate Ads Conversion Reports.
Wait — so should I actually want 3P cookies after all? Definitely not. But the core problem isn’t — and hasn’t been — that Conversion Data requires consumer identity collection. The core problem with Conversion Data is that conversion data collects and attributes full credit for every customer order. This means that any marketing strategy that uses more than one ad platform will report more conversions than actual sales generated.
This simple fact — not the PII issue — is the core problem with 3P Conversion Data. By definition, it cannot be a useful proxy for true business impact, because it contains duplicate records that cannot be reconciled. This makes growing business outcomes profitably utilizing 3P conversion data virtually impossible. Need proof? The average brand lost $29 per customer acquired in 2023.
The Enhanced Conversions Riddle
So 3P cookies are dead — which is good! — because they weren’t helping you drive profits. But what do you do instead? Thankfully, Google and Meta are here to save you with their newest solutions — Google Enhanced Conversions and Facebook CAPI.
Google tells you that advertisers see 15% more conversions with Enhanced Conversions, and Meta says Facebook CAPI will have these same benefits. In addition, they claim that it’s better for user privacy.
Are these claims true? Let’s unpack them. First, let’s test the notion that these solutions improve user privacy.
Let’s start with the fact that traditional Conversion Data doesn’t require PII data collection & sharing at all.
Now, let’s look at how things like Enhanced Conversions and Facebook CAPI actually work:
Enhanced Conversions and Facebook CAPI require sending PII — although ‘hashed’ — back to GGL/Meta, and require doing so at scale.
Knowing that 3P cookie-driven conversions required no PII sharing, Enhanced Conversions and Facebook CAPI increase user data sharing risks and reduce data privacy. This directly contradicts the ‘privacy’ narrative around EC and CAPI.
But What About The 15% Increase In Conversions?
Critical Insight: Conversions in your ad platform are not the same thing as sales for your business. Let’s explain:
Say I run ads that drive sales to my website. One day, I decide to track those sales with 3P Conversion Tracking. The day my conversion tracking starts collecting data and reporting it in my ad platform, nothing changes about the sales I drive. It’s not like sales weren’t happening before I had conversion data — they were. All conversion data captures is a representation of those sales.
Nothing changes about your sales or ROI performance when you turn on Enhanced Conversions, or send more data to Facebook CAPI. All that changes are the volume of sales that each platform can match back to their customer database — and therefore — the volume of impact their conversion data will show within reporting.
Retain User Data Privacy & Increase Real Sales Impact: Bonsai pCV
Your business doesn’t need more conversion data showing up in your Ad Platform Reports. What your business needs are more actual sales.
Fundamental Bidding Theory tells us that driving maximum incremental profits requires optimal bidding, and to solve optimal bidding, you need to know the expected incremental value of each click.
3P conversion data doesn’t solve incremental value measurement.
Sharing more PII with Google doesn’t solve value measurement either.
What can solve expected iVPC? Robust first-party datasets that capture cross-platform interactions, training purpose-built predictive models, turned into value pipelines driving algorithmic investment that applies Fundamental Bidding Theory principles — with speed and scale.
That solution exists. Bonsai pCV is ready for trial at your company.
Let’s grow profits together.
