From risk to opportunity: Leveraging privacy for responsible, consumer-centric marketing
Across the digital marketing industry, few topics have drawn more attention in recent years than the onset of privacy-related risks to our status quo way of doing business. And why not? The status quo (e.g., relying on third-party cookies and cross-site tracking) has been working well for marketers. These tactics have created a breadcrumb trail of what consumers see and do online and have become the foundational technology for digital advertising, powering personalized user experiences for brands.
However, it's these same tactics that are now top of mind for privacy-focused consumers and regulators around the world, causing marketers to rethink and significantly change the way they reach consumers.
The question on everyone’s mind remains the same. Do consumers even really care?
Well, what we’ve learned is that consumers DO care about their privacy, and until recently, we’ve been relying on technology and best practices that are almost 30 years old. Think about that for a second. Cookies have been the status quo since the days when we had less than one per cent of the global population online!
The world has changed, with more than 4.5 billion global consumers online, and these consumers have a strong voice that’s getting louder all of the time. Over the past few years, we have seen a fundamental shift in the way users feel about their privacy on the web — they want more trust in how their personal data is being handled, and they want to be in control of their information. We’ve seen the research and data that has been surfacing during the digital acceleration of the COVID era. According to a new report from Google and Ipsos, Privacy by design: The benefits of putting people in control, the perceived relevance of ads shown increased 7 per cent when participants’ data was consciously shared rather than collected via cookies.
Increased demands for improved data privacy standards from consumers, regulators and technology companies — including the ongoing phase out of third-party cookies by all major internet browsers — is spurring the need for a change in the architecture that powers the current online advertising ecosystem. The bottom line is that modern consumers expect their privacy to be respected.
We also know that consumers have increasingly sophisticated service expectations. Consumers wanted personalization before the pandemic, but now they demand it. Personalized communications is a key factor in prompting consideration of a brand, and the Google Ipsos research reveals that, in response to a positive privacy experience with a second-choice brand, 49 per cent of participants across the Americas said they would choose to switch from their preferred brand to their second-choice brand. Consumers live online and rely on personalized digital messaging and transactions. They will be loyal to the brands that they love and trust, and will punish the ones that do not respect their choices.
The good news is that it’s not one or the other; we can reach and serve consumers well, while at the same time being privacy-first. We talk a lot about the risks of not getting this right, but the biggest risk of all to marketers is ceding ground to your competitors who are getting it right. The time is now to flip the script and begin to embrace this new era of responsible, consumer-centric marketing. Those that are moving the most quickly towards their modern marketing aspirations are winning the attention of this new consumer.
Do I have your attention now? Well here’s the thing, most marketers fully understand where they need to go, but are still focusing too much of their time and too many of their resources on the status quo tactics that got us here, and looking for cross-site targeting and tracking solutions that will replace the cookie and app identifiers when they’re gone. How quickly we forget the golden rule. If it smells like a cookie, you can bet it’s in the cross hairs of the technology platforms and regulators that have told us specifically that a replacement for the cookie will not pass the smell test with the consumers they’re sworn to protect. So why waste your time and resources on a band aid when there are perfectly suitable and durable paths forward?
Marketers must adapt to this opportunity. The future begins with having clean, consented and connected first-party data, and using that data to learn about your customers, connect with them and find new ones that look like them. In order to do this at scale, we must lean into powerful AI to enhance performance and insights as identifiers degrade. The marketers that are setting the pace are the ones testing new audience strategies to compare future performance against current cookie-based strategies. This requires us to have a culture of experimentation and an “everything is a test” mentality. To win in the long run you must be willing to fail and have setbacks along the way — as long as we fail fast and learn from each experiment.
This “modern marketing” mindset and culture of experimentation is enabling digitally mature brands to experience tangible results TODAY, such as growing market share, increasing revenue and reducing cost. Ultimately, to turn this risk into an opportunity and to win the attention of this evolving, privacy-conscious consumer, marketers will need to embrace data, technology and experimentation to determine what will work best for their business in the future. Scaling these new, consumer-centric tactics and moving away from the status quo that got us here will be what propels our industry forward. That's when true digital marketing transformation begins.
This blog is part of the CMA Adtech Committee’s Bi-Monthly Blog Series. Have an adtech-related question you want answered in an upcoming blog? Drop us a line.