Data privacy is reshaping how we approach advertising

As consumer privacy continues to become paramount to data providers, social networks and digital environments, the changes have undoubtedly evolved and shaped the future of the advertising ecosystem. 

We’ve seen everything from the introduction of regulations (GDPR in the EU and CCPA in the USA) to the creation of cloud-based environments for derived insights to Safari limiting cookie tracking (ITP), each of which provokes a shift in how advertisers continue to reach consumers and optimize their journey.

How browsers are evolving

With bated breath, the industry has been waiting to see how Google’s Chrome browser will address user privacy and cookie tracking. Unsurprisingly, they announced they would phase out support for third-party cookies by 2022. 

The end of the third-party cookie is almost (actually) here. While Apple and Mozilla eliminated third-party cookies with little or no notice, Google is slowly rolling out changes so as not to disrupt the industry and their businesses too quickly. Google Chrome is utilized by 69% of the global internet users, and with an advertising revenue stream, they are walking a tight line to satisfy consumer privacy needs and meet their revenue goals.

The way we measure campaigns will change

The industry initially started to swirl, but now we’re at a standstill until Google releases technical details on their solution, coined “Privacy Sandbox.” 

Mid-size and small publishers are scrambling to find solutions to maintain their revenue streams. Adtech players jockey to adapt to the changes. Agencies, like ours, are reexamining data flows, attribution models and clients’ tech stacks. 

As of now, it’s unclear how Google plans to solve for measurement, which is critical to advertising campaigns. We should know by the end of 2020 how Chrome will measure conversions.

The opportunity in chaos

While it may seem like doom and gloom, this evolution presents an opportunity for transformation. Third-party cookies are a legacy technology that was never intended for advertising and, frankly, had been a source of concern for consumer privacy. 

They are nonpersistent, non-transparent and highly fragmented. We welcome the shift from a cookie-based world to an identity-based world for advertising, as it will offer a view across devices, platforms and channels based on a persistent identifier of a consumer. 

Ok, so what do we know?

  • Marketers need to collect consented first-party data: First-party data is the new gold, and it’s more valuable if consent is obtained. 
  • Leverage clean rooms for log-level analyses: While this will create silos in analytics, it allows us to deliver insights on an individual level. 
  • As of March 2021, we will no longer have access to ID decorated log files: This is another driver for leaning into clean rooms.
  • DMPs out, CDPs in: Marketers are reconsidering the usage of a DMP for a CDP; historically, a DMP is based on cookies and used for advertising only. CDP provides a cloud-based platform for companies to collect, unify, analyze and activate all data across the organization and connect to a single profile of a consumer, which is based on an identifier such as email. 
  • Users already have notification fatigue: How many of us actually click “learn more” on the e-privacy banners, especially on mobile, vs. just accept by clicking? It’s intrusive; consumers want to get to the content rather than check their privacy settings in the moment.  
  • The walled gardens are getting stronger: Yes, even though we have tried to move away from them, shifting to an identity-based world gives the walled gardens more clout. They are built off of consented, logged-in data. 

On the flip side, there’s more to learn

  • Technical specs for Google Chrome’s “Privacy Sandbox”: The industry is working together to find the solution. Google has stated they intend to share their methodology for measuring conversions by the end of the year.
  • Will there be a unified, persistent ID across the open web? Will the industry lean into one identity vendor to do this, such as LiveRamp?
  • What’s the future of device IDs? These are critical to Apple’s business, but we know Apple is focused on data privacy. 
  • What are other privacy features on Apple’s road map for apps? They released the first features with iOS 13 in October 2019. 

There is no silver bullet to success in a cookie-less and privacy-centric world. While we learn more about Chrome’s solution, there are some things brands can do to get ahead of these changes and use them to their advantage.

What brands can do now to prepare

  • Shift to first-party-based strategies. Ideally, brands should always use their own first-party data. They can supplement it by layering on partner data to make it richer. For brands with little to no first-party data, they can leverage a partner’s (e.g., Google, Facebook, Amazon, large publishers) data, as it’s persistent and consented.  
  • Understand the importance of clean rooms. Since raw data logs are going away (example: Google Data Transfer files globally this fall), clean rooms will be the only way to see user-level data in a safe, private manner. Clean rooms are cloud-based privacy safe environments where you can mingle your first-party data and exposure data from campaigns.

    Google’s Ads Data Hub (ADH) and Facebook’s Advanced Analytics are currently in the market. Amazon is building out its clean room. Using 3–4 clean rooms is not ideal, as we won’t have a cross-platform view of paid media campaigns. Brands should urge (with their wallets) interoperability between clean rooms.
  • Reexamine your tech stack on an ongoing basis. This isn’t a set-and-forget exercise; the tech stack needs to continually be reexamined. Brands should ensure that their measurement, identity, viewability, data and attribution partners have API integrations with the media partners they want to work with. We have seen movement to API-based measurement.

    Based on the little we know about Chrome’s “Privacy Sandbox,” we do know it will be API-based. Additionally, if your attribution partner doesn’t have an integration with ADH, you won’t have YouTube campaigns in your models; you’ll have a portion of paid media that’s missing to be analyzed off to the side. 

We’re all in this together. Without clear-cut “solutions,” the industry will ebb and flow to adjust as announcements are made. Marketers, publishers and agencies will have to continually educate themselves on the changes. 

Hearts is here as a strategic partner for our clients to work through any changes to continually meet, and exceed, performance goals. With the industry evolution, we could build a new advertising ecosystem that benefits everyone — consumers, marketers, publishers, adtech/martech vendors and agencies.