First-Party Data is King
Rolling with iOS14 and the end of Google third-party cookies
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The world of digital marketing is forever in a constant state of flux, and with data privacy and cyber security now at the forefront of every marketers mind, the forthcoming consumer tracking changes from Apple, Google and Australia’s lawmakers should be on everyone’s priority list.
Marketers, start looking at how you best capture, analyse and leverage your first-party data assets as the world of third-party data access starts to get a lot more restrictive.
A series of high-profile breaches in recent years has put the global spotlight on data protection practices in digital marketing. In light of these breaches, and in response to growing consumer demand for better privacy, a wave of reform is sweeping through the industry.
Specifically, major changes are coming down the pipeline from Apple and Google that will have a major impact on how your users can be tracked and targeted. First, is Apple’s much-anticipated iOS 14 update that released earlier this year and requires people to opt-in before their data can be collected by advertisers for the purpose of developing personalised ads. This is followed by Google’s plans to phase out third-party cookies over the next 12 months.
How will this impact your business? Time will tell, to a certain extent, once these proposed changes come into play. But being forewarned is forearmed. Preparation is key, so start cultivating solid inbound and content marketing strategies to help build trust and rapport with your consumers, and work towards having a high-quality, first-person database.
As we wait for the full extent of changes to land, here’s a high-level summary of what is coming, how to prepare, and some greater context on the global privacy landscape.
iOS 14 Data Privacy Changes
As it currently stands, mobile apps can track users across other apps and websites in order to serve them targeted advertising. This combination of user tracking and targeting is one of the main reasons digital advertising has been so effective to date. iOS 14 will change this in a big way as it will require Apple device users to opt-in to having their data collected and tracked.
This bid to improve transparency and empower users, according to Apple, will hit app developers who rely on third-party advertising the hardest. As the iOS updates roll out, app developers will be required to include a tracking permission pop-up or risk exclusion from the App Store.
For businesses who market to people on Apple devices, your ability to remarket to these users will soon be limited to those who opt-in. On Facebook for example, once a person opts out it will become harder to effectively target them outside their ecosystem (WhatsApp, Instagram and Facebook), as you will no longer be able to serve personalised messages to them. Given this, we expect to see an initial decline in conversion rates.
Similarly, if you rely on Facebook ads to reach your audience in other apps outside of the Facebook ecosystem, you could see conversions decline and the number of ad slots decrease.
Key take away: We’re currently reviewing conversions from within the Facebook Audience Network and broader ecosystem to see where these changes will be felt the most. Conversion lag reports in Google Analytics are also being examined to determine the average time it takes users to complete a conversion event after interacting with a Facebook ad. This will allow us to gain a clearer understanding of how Facebook’s shortened attribution window could impact digital marketing campaigns.
End of Third-party Cookies in Google
In response to heightened consumer privacy expectations, Google is phasing out third-party cookies by 2022. Third-party cookies will be replaced by a “privacy sandbox” solution, which Google says will prevent deceptive tracking practices while still allowing advertisers to target customers within their platforms. The “privacy sandbox” will enable interest-based targeting that people can opt-out of (in place of the current unique IDs that are generated). However, Google will still track IDs from their product users, and this information can still be connected to your online activities.
Key take away: As soon as testing becomes available, our team will put the new sandbox through its paces and report on findings. In particular, the team are interested to see if our own results in testing reflect those reported by Google.
Data Privacy Around the World
The Facebook-Cambridge Analytica scandal was a watershed moment for the industry. Since then, several parts of the world have tackled data privacy head on, bringing new laws into effect.
Europe was first, with the General Data Protection Regulation (GDPR) coming into force in 2018. Far from being the death of digital marketing as we knew it, some information suggests marketers have found the impact of GDPR to be less significant than first thought. This report even indicates that the necessary database cleansing has had a positive impact, with respondents seeing an increase in email open rates (74%) and click throughs (75%).
Key take away: While Europe is still dealing with some teething problems around enforcement, it appears that consumers are still willing to share their data with brands they trust.
In United States, where the California Consumer Privacy Act (CCPA) came into effect in 2020, results to date have been mixed. While some suggest a negative impact on Facebook campaigns, other reports show that few consumers have enacted their CCPA opt-out rights.
Time will tell if the impact corrects in similar fashion to Europe, as consumers opt back in to brands and content they wish to engage with.
What We Recommend
Personalisation and targeting are a key part of what has made digital advertising so effective to date. As tech giants and government bodies continue to hand down changes to data practices and policies, it will likely become more difficult to create personalised ads without first-party data. Here’s a list of priorities to help you move forward with confidence.
It’s critical to put your customers first and clearly inform people about what you do with their data. This is about more than just ticking a box – your audience needs to know you’re doing the right thing by them.
Develop a first-party data strategy
Focus on building a first- party data strategy and also a mobile engagement plan. For example, after a first install or user action, leverage marketing tools like email, push notifications, in app messages, SMS and chatbots.
Leverage your database
Ensure your contact database lives in a proper marketing automation platform or CRM and is kept up to date with accurate details. Leverage this across email, SMS, your prospecting and remarketing advertising efforts.
Review data regularly
Closely review the impact of this change across your live campaigns and across devices. Continually optimise to achieve campaign KPIs.
Consider subscription-based models
Mechanisms like subscription-based models where you can identify users yourself will become more and more popular. Work towards building that all-important long-term relationship with your consumers so they will happily opt into relevant tracking.
Use contextual advertising
Explore contextual advertising as a way to deliver contextually relevant ads to users without violating privacy rights or needing to rely on third-party cookies.
Consider customer data platforms
Analysing web data that previously relied on cookies (e.g., new vs. returning users, journey mapping, attribution models etc.) and creating personalised experiences is going to become difficult. We predict this will drive higher interest for identity resolution platforms (e.g., Segment CDP platform) to work around some of these issues.
Over the next 12 months and beyond there will be a new wave in digital marketing that goes beyond ticking a compliancy box. It’s about being a modern digital business with a focus on your customer.
From an operational standpoint, there are a number of activities that need to be completed on platforms like Facebook Business Manager in light of the iOS update. If you need help reviewing your current account configuration or need assistance refining your digital strategy for 2021, please reach out via [email protected].