Marketing in the New Age of Data Privacy
In a world of algorithms and big data, it’s no surprise that online consumers are now more conscious than ever about data privacy. Between the facebook data privacy scandal of 2021 and the emergence of regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Protection Act (CCPA), we’re seeing a shift in how targeted advertising and data collection are being perceived by not just consumers, but lawmakers as well. The tech giants are making moves accordingly, with Apple introducing the opt out function for tracking in apps, as well as Google’s decision to eliminate third party cookies in 2023.
These changes are significant for online advertisers, as gathering consumer intel for effective ad targeting is crucial to successful online marketing. With large platforms such as Apple and Google making big changes to their privacy policies, we as marketers have no choice but to adapt. This involves understanding exactly what tools we have at our disposal going forward.
But let me digress for a moment, and give you a quick crash course on cookies, as they are an important part of this discussion. In simple terms, a “cookie” is a piece of code that tracks the sequence of online touch points accessed by a unique web user. A first party cookie is domain specific, which means it only tracks what you do within a certain website. For example, if you’re visiting Nikes online store, the website will gather some information about you such as your login, password, and items you may have clicked on or left in your shopping cart. This enables certain features like an easier log in process on your following visits as well as targeted product recommendations, that help to optimize the user experience.
Third party cookies, on the other hand, essentially follow you around the internet, tracking your activity across your entire browser. These cookies collect behavioral data based on your usage habits and feed you ads accordingly. They are the culprits behind those sinister banner ads that seem to appear on every webpage you visit. It is this type of cookie that Google will be eliminating on Chrome in 2023. Here’s a quick visual explanation for good measure.
Now that we understand cookies and their utility, here are some strategies that marketers can follow once they are phased out in the next few years.
- Leveraging First Party & Zero Party data
While Google plans to phase out third party cookies, first party cookies will still be intact. This is data that brands obtain directly from their consumers, and play an important role in the type of relationship they can build. The utility of first party data is not just limited to product retargeting and creating in-site user profiles. Brands should aim to optimize their collection of first party data through sources including, but not limited to;
- Website analytics
- Social media engagement
- Email interactions
- Purchase history
Having a strong CDP (customer data platform) or Customer Relationship Management software (CRM) plays an important role here as well.
We must also consider the value of “zero-party data” which is first hand data that customers share intentionally. This could include things like purchase intentions, product preferences or communication preferences. Though it is more time consuming to obtain, zero-party data helps to paint an accurate picture of how a consumer wishes to be recognized by a brand. It is also predicated on consent, which helps to create a trustful and loyal relationship with a consumer.
Zero party data can be something as simple as an email list sign up, offering discounts or perks in exchange for a customer’s email address. But we can build on this even further, by offering premium content in exchange for information. For example, brands can offer exclusive video content, previews, custom product recommendations or white papers in exchange for the completion of a quick customer survey. Brands can also incorporate “micro experiences” into the customer journey, such as those described in this article by Stephenie Liu. Not only are these new ways to create value for consumers, it also enables brands to obtain more accurate, first hand insights.
2. Contextual advertising
Contextual advertising is not a new concept by any means, but is garnering more attention lately given the recent changes in data privacy. It takes into consideration the context of a certain piece of content, and places relevant ads accordingly. Instead of targeting ads based on user behavior, contextual advertising uses artificial intelligence to identify context based on specific content aspects, such as keywords, or the environment that a user is browsing in, such as location or weather. For example, an ad for athletic attire may be placed on an article about health and fitness, or consumers in snowy locations may be fed geo ads for winter attire.
The main benefit of contextual advertising is that it improves the relevance of targeted ads. 64% consumers today say that they value relevant content and personalized offers from brands. What’s more is that this form of advertising provides insights that are more present, while behavioral targeting may run the risk of being outdated, or not accounting for changes in consumer habits over time.
Conclusion
At the end of the day, targeted advertising isn’t going anywhere anytime soon. Marketers face two unique challenges going forward. The first is to effectively navigate the new changes in data collection and privacy. The second is to understand the perspective of today’s online consumers, who are extremely cognizant of how their digital footprints are being monitored. Using first and zero party data as well as contextual advertising aligns well with what these consumers value; transparency, personalization and relevance. It is now the job of marketers to leverage these tools creatively, in a way that both fulfills marketing objectives and establishes stronger customer relationships.
