Marketing In The Era Of Data Growth And Privacy
This article is part of a special edition of VB magazine. Read the full series here: How data protection is changing marketing.
For more than two decades, the holy grail of marketing has centered on the personal relationship between brands and customers. Companies that have previously used TV ads to target them want to take advantage of technologies like third-party cookies that track consumers online and view vast amounts of readily available data to deliver targeted ads to potentially interested customers. okay
The marketing landscape is undergoing another drastic transformation due to the increased focus on privacy by consumers, regulators, and big tech companies.
By 2023, according to Gartner, 65% of the world's population will have modern privacy standards, up from 10% in 2010. Leading the EU GDPR and California CCPA. Meanwhile, in late June, the Committee on Energy and Commerce formally introduced the US Privacy Act (ADPPA) to the US House of Representatives, marking a major step forward in the negotiations on congressional privacy.
it's becoming true
“I think this is an awakening,” Anthony Katsur, CEO of the IAB Tech Lab, told VentureBeat.
the incident
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The IAB Tech Lab is a not-for-profit consortium with a global community of contributors dedicated to advancing critical digital media technologies and standards. "The industry is starting to respond that this is real, and it's going to get even more real with real fines, real fines and real consequences for your business," he said.
Cosmetics retailer Sephora is one of the companies drawing criticism after last month's $1.2 billion settlement with the state of California.
Third party cookies are almost completely excluded. The most popular Chrome browser remains the last big hurdle, with Google recently announcing that it won't remove third-party cookies in Chrome until the second half of 2024. But while it's giving marketers some breathing room, advertisers are seeing the written word. Third party cookies are obsolete and most big brands have been experimenting with other options for a long time.
Also, some big tech companies have changed their privacy policies. Apple CEO Tim Cook called privacy "the most important battle of our time," and Apple introduced app tracking transparency in an April 2021 mobile software update. Meanwhile, Google announced a multi-year plan. years to update its Android privacy policy in February 2022 to limit Apple's third-party data sharing on its devices.
Marketers put personalized targeting second
All of this has taken a dizzying turn for marketers who must adapt to a new era of marketing in a privacy-driven world.
"I think we're seeing for the first time in 10 years that marketers are questioning whether one-on-one communication and personalization is something they really should value more," said Samrat Sharma, director of global marketing transformation at PwC. "The reality is that it is not clear if this will be possible or necessary."
He stressed that targeted communication will remain the norm: "The question will continue to be how are you going to personalize it, because we know people don't want to be approached one by one."
The reality is that consumers want everything at once, which means marketers must walk an increasingly treacherous tightrope to meet their expectations. According to a Boston Consulting Group (BCG) study, two-thirds of consumers want ads to be relevant to their interests, but nearly half are concerned about sharing data to create personalized ads.
"Essentially, consumers are becoming more privacy conscious and demanding more shared value to give brands more access privileges," Sharma said. "This prompts regulators to act, but then manufacturers and publishers can react," he said.
new marketing direction
What's a marketer to do in a changing marketing universe where buyers want personalization but also privacy? According to experts, the answer lies in smarter marketing, using multiple formats and the latest technologies to help maximize conversions while keeping privacy top of mind.
"Selecting people based on third-party data isn't going to be easy," said Andrew Frank, vice president of analytics at Gartner. "If you're a retailer or financial services company and you have direct contact with your customers, you're likely to get permission for personalized services."
Companies that have indirect contact with consumers, ie. B. In consumer packaged goods, you must grapple with more subtle efforts, such as contextual targeting, an emphasis on individual creativity, and advanced artificial intelligence (AI) and analytics. he explained with impersonal signs.
This has led to many attempts to replace third-party cookies with privacy-based alternatives. Frank says he's excited about recent innovations like the IAB Tech Lab's Vendor Defined Audience. These audiences are categorized by demographics and interests, not by publishers who share personal identifiers with advertisers, such as: B. Identifier based on cookies or email address. and purchase intent using the IAB Tech Lab audience taxonomy standard.
"This allows publishers and marketers to constructively define their brand's audiences without sacrificing privacy," Frank said. "I think they're still working on changes to the transparency and consent framework that will allow us to create a sort of secure marketplace for concept data in advertising."
According to Vivek Sharma, CEO and co-founder of Movable Ink, zero-side data is becoming a major trend that goes beyond raw data and focuses on information that is voluntarily and intentionally consumed through activity. of the website, news, profiles and surveys. uses artificial intelligence to personalize marketing content.
"When you fill out a marriage registration, it's an example of objective data: you're actively telling them what your priorities are and what interests you," said Vivek Sharma (no relation to PwC's Samrat Sharma). "But the whole world of third-party data, where your data is transferred, over and over again. In the future, no trusted company will be trusted."
However, Katzur says he doesn't think there will ever be a single solution for the future of large-scale targeting, the ability to target specific people, for marketing purposes.
"Whether it's a native identity or a vendor-defined audience, it's going to be a portfolio solution," he said, adding that the IAB tech lab recently formed a working group to develop Privacy Enhancement Technologies (PETs). This working group brings together developers working in advanced cryptography, data science, privacy, and security engineering to develop software standards and tools that improve privacy through encryption, anonymization, and machine learning.
“We are at the threshold of the third movement in digital marketing, where I think there is an opportunity to revive the ecosystem,” said Katsur. "There will be pain and ups and downs, but I will not discount the ability of this industry to innovate to meet the needs of marketers, media companies and consumers."
What should marketers do?
1. Evaluate your investment
"I think it's important to invest in new technology and reevaluate the investments you made three or four years ago because the landscape has changed and will probably continue to change," said Gartner's Frank.
These are volatile times, he explained, with regulatory restrictions anticipated by marketers and major changes in technology and data access.
"This looks like an opportunity for some retailers and publishers because they have the ability to take data and use it as part of relationship building, like a loyalty program," he said.
Others need to invest in new technologies, such as data rooms, that allow companies to securely collaborate with consumer data without sharing personal data with third parties.
"I think these technologies are very promising and obviously require some investment and expertise to get them to work properly," he said.
2. Collaboration within the organization
When consumers value privacy, and this trend is growing, technology solutions need to be delivered to customers, says PwC's Samrat Sharma, which, while easier said than done, should start with collaboration within the company.
"This is what you want to achieve," he said. "If you're not doing it in collaboration with IT or transformation teams, it can replace the DMP, for example, but it won't align with broader business goals."
This means areas like analytics, IT, marketing, and transformation need to come together so everyone knows what the end goals are, and then asks the question, "What technologies and solutions do we use to achieve those goals?"
3. Ask the right question
Frank adds that one of the biggest questions he gets from marketers is, "How can we continue to target and measure our advertising in an increasingly restrictive environment that remains accountable to the business?" It's a question. However, this may not be the right question.
"I think the question you should be asking yourself is how can we build a future that respects consumers' privacy and best interests while allowing us to deliver value to our customers." possible experience” instead of abbreviating the brand? he said. Of course, there is no simple answer to these questions: "I think this is a decision problem." "I think the decision is very complex and delicate."
Marketers won't wait to take action
Of course, today's consumers can easily vote with their feet or by clicking on a website.
"So the marketing and advertising industry has to figure out how to give consumers the privacy, data security and personalization that they want," Katsur said.
"If he gets a raise, he might be eligible," he said. "And let's be clear: Ads are not going away. I think we all get that."
Movable Ink's Vivek Sharma added that the holiday season is right around the corner and a new world of privacy compliance is on the cards.
“Marketers need to put on their thinking caps and go back to the drawing board to create core value for customers and win them over,” he said.
However, experts agree that it is too early to talk about marketing and privacy issues.
"I think I'm optimistic for the long term, but I think it's one of those situations where you have to be careful not to spoil a clear picture in the short term," Frank said.
PwC's Samrat Sharma emphasized that marketers aren't just waiting for the final nail in the coffin from an outside manufacturer. “There is still uncertainty, but they know they have to do something,” he said. “Everyone is tired of kicking a can down the street. They move forward with solutions."
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