11 March 2024
Privacy by design - the data exchange
In summary
- 2024 is witnessing some of the biggest changes the advertising industry has experienced as Google puts the final nail into the 3rd party cookie system that we have relied on for targeting and measurement for over 20 years
- Consumers are now being asked to identify and manage the rights of their data across all digital properties
- It is a challenging time for marketers calling to find different ways to build trust with your customer
Evolving privacy landscape
Over the past five years, the APAC region has witnessed a rise in its focus on privacy, in the form of rising consumer concern, increased regulatory intervention and changes to platform policies placing constraints on the use and collection of user data.
The GDPR movement in Europe pre-empted the changes that continue to roll out globally, with new privacy regulations and amended existing privacy laws coming into effect in Australia in 2024. By and large the biggest effect that these changes will have on marketers will be the control that consumers have over how their data is used, especially in the digital landscape.
Third party cookie deprecation
Apple has led the way from a platform perspective, preventing cross-site tracking on its iOS devices and Safari browser from as early as 2017. Most marketers have conveniently ignored the increasing data blocks by Apple over the last few years, however it is impossible to ignore the final date that Google has announced for removing all 3rd party cookies from its Chrome browser. That’s August 2024 for those who still may think the inevitable will not happen.
This is one of the biggest changes to hit the digital marketing landscape since the rise of programmatic trading, largely based on the cookie ecosystem. The loss of 3rd party cookies for marketers is huge both in terms of reporting and attribution, as well as segmenting and targeting audiences across the web. From having buckets of data and insights, marketers only solution is to now rely on their 1st party data, with far less scalability and control.
Advertisers losing full control of first party data
More to the point, first party data is now increasingly controlled by the person who that data point belongs to, not the company or website. Whilst the consumer can not completely eliminate sales data and information, the ability for a company to use that data to build and target audiences, is becoming strictly controlled. These controls extend across all digital media channels including paid media, personalisation efforts, as well as reporting and attribution.
So the next question marketers must be asking themselves is - how do I get my customer to allow me to use their data in this rapidly diminishing environment?
Top 5 tips for privacy first marketing success
1. Trust and transparency
Reports and surveys suggest that consumers are extremely concerned about how their data is being used and with this kind of mindset, consumers are more likely to opt-out of any options around data-usage.
Customers want to feel in control of their data but they often lack the knowledge on how exactly it is being used - so be transparent. By being transparent, you will offer customers the choice of how you communicate with them across channels, but also explain the benefit they receive by enabling the use of their data.
One of the most important aspects to explain is the personalised experience you can provide through using data, to make their engagement with you more relevant, more concise, and far more convenient for them from a time-saving perspective.
2. Incentivise and reward
Insights suggest that monetary reward alone will not guarantee a successful data exchange with your customers. The experience you offer is equally as important to the customer in this value exchange. We spoke about convenience and personalisation above.
Users’ patience on websites that lag, make it difficult to log-in or access information, are all major drop offs, frustrating the customer and diminishing the relationship between the buyer and seller.
Some considerations in the data exchange could be offering logged in users immediate discounts. If you are an e-commerce store, these can be distributed across different channels, such as an email, to keep omni-channel communication open. For publishers, it may be having access to exclusive content, competitions or giveaways that will only be delivered across certain channels. These incentives need to be kept subtle, to delight, and not bombard the customer in order to maintain continuity.
3. Look at your tech stack
As increasing privacy regulations and compliance policies roll out, there are a raft of new companies operating in what some are calling the forensic ad-tech scape. The first of these is consent management platforms (CMP) which have been around for a while now. A CMP offers users the option of how they want a brand to communicate with them across channels, and where their data can be used. It is becoming an integral part of any consumer privacy framework that a brand has.
Alongside the individual ad-tech players, the walled gardens are also revolutionising their processes to adapt to privacy regulations and 3rd party cookie deprecation. These include server-side frameworks for anonymised data capture and transfer, as well as additional opt-in policies.
Meta has long traded on consumer’s data as their business model, but in 2023 they announced they will be asking users to opt-in to behaviourally targeted ads. Google is following suit with the release of consent mode which actively gathers the users consent to use their data across a website or digital property. Brands who do not have consent mode enabled, will automatically start to lose customer data, starting with EU citizens.
4. Bring your teams together
When it comes to data governance and privacy, it’s important to work as a team. Legal should not be sat in a different room to marketing in this case. The closer data, legal and marketing teams can work together, the more readily a business can adapt to current and upcoming regulations.
It is also important to keep your data clean and understand where it is coming from, and this can never be the job of one team. Having a clear taxonomy in place will help teams speak the same language and avoid confusion, whilst delivering huge time efficiencies in the long run. Data locked in silos prevent companies from fully understanding what their customers want and hampers their ability to follow through with that insight. Customer engagement becomes reactive at best, with adherence to customer consent at risk of being neglected.
5. Keep on testing
As if marketers do not have enough testing going on across their media buys and channels. However the recommendation is that customer engagement and data opt-in frameworks should be under a constant review with companies willing to adapt to different journeys and workflows as the privacy evolution evolves. Importantly, start to look at opt-out channels and how to restructure some of these customer journeys to measure the impact of these changes.
We spoke to a brand the other week who target an older demographic user. Since Apple’s 2021 opt-in policy they have lost 72% of their identifiable site visitors. Once the Chrome cookie changes come into effect later this year, even the most optimistic analysts predict that marketers will lose at least 50% of addressable visitors to their digital properties. Starting this conversation with your customers now and having a number of communication channels in place, should help ease the impact of the changes ahead.
How are companies using data and benefitting the customer?
Netflix creates content based on user preferences
Whenever you access the Netflix service, the recommendations system strives to help you find a show or movie to enjoy with minimal effort. Most of us really appreciate the personalised recommendations we receive, so what is the difference between allowing Netflix to use our historical data and a website?
As a subscription application we actually come to expect high levels of personalisation and tend to feel that our data is more secure on apps versus the open web. Netflix closely analyses all of your interactions with its content and more than just recommending other shows, Netflix now goes one step further and actually produces content that it knows will resonate with its members, ensuring that there is a growing library based on user preference.
Netflix Data Exchange Rating 4 out of 5 (however new payment models see ratings drop)
A strategic alliance between Spotify and Uber
Uber and Spotify are two of the largest technology companies in the world and have a combined reach of over 1 billion users. They have partnered to offer a personalised music experience for Uber passengers, offering them the ability to choose their own music during their ride.
The partnership has allowed Uber to gain insights into their customers’ music preferences, which can be used to inform future marketing campaigns. Whilst for Spotify, it has increased brand presence and generates revenue from Uber passengers who subscribe to Spotify Premium to have more control over their music.
Spotify and Uber Data Exchange Rating 3 out of 5 (not that wide spread yet)
Nike and Apple - taking sports and music to a new level
Nike and Apple have been data partners for decades starting with the Nike Sports and iPod partnership (yes - remember those) bringing sports and music together in 2006. The first product developed was the Nike+iPod Sport Kit, a wireless system that allows Nike+ footwear to talk with your iPod Nano, connecting you to the ultimate personal workout experience. Information on time, distance, calories burned and pace was stored on the iPod and displayed on the screen; real-time audible feedback was provided through headphones.
In 2016 their long standing partnership introduced the Apple Watch Nike+. It is the ultimate tool for anyone who runs. The Apple Watch Nike+ includes exclusive Siri commands, along with deep integration with the Nike+ Run Club app for motivation to go for a run, along with coaching plans that adapt to your unique schedule and progress, and guidance from the world’s best coaches and athletes. On top of this you can choose your own iconic Nike watch face and straps to customise your running accessory.
Nike and Apple Data Exchange Rating 4.5 out of 5
Tapestri - paying customers to keep doing what they do
For a long time now consumers have unknowingly given away their data but are excluded from the financial benefits reaped by a billion-dollar plus industry that a few large tech companies dominate. Enter into the market, Tapestri.
“Data is worth more than oil. And we should be benefiting from it, not just companies” - Andrew Wang - Technology Entrepreneur
No surveys or purchases. Tapestri works seamlessly in the background to allow consumers to earn money from their data. Tapestri is an app that creates a fully consented consumer marketplace where everyone wins. Launched in 2021 and downloaded by thousands of everyday consumers (“Tapsters”), the company has paid out hundreds of thousands of dollars for everyday data that we have previously been giving away for free.
Tapestri Data Exchange Rating 3.5 out of 5 (users are loving the concept but still has bugs)
Next steps
The open web is changing dramatically as data becomes more controlled and privacy regulations increase. The above examples illustrate that consumers are comfortable giving their data to applications and remaining in a logged in environment that is personal and beneficial to them. It’s little surprise then, that as we go about our daily browsing we are being promoted to log into almost every website we visit today. Will this self-identification, control framework continue to work, and for how long?
Get in touch with the team at Louder to discus how prepared you are for the cookie-less future ahead. Additionally, sign up to our newsletter to receive industry and platform news and more articles like this one right in your inbox!
About
Candice Driver
Candice is Agency and Client Lead at Louder. In her spare time you will find her hanging out with her dog Lilly, socialising with friends, and hitting trendy bars and restaurants.