Advertising Technology is Ready to Evolve
The landscape of digital advertising technology is set for another major change. As public awareness of data collection practices grows and major technological facilitators in the digital advertising space lean in on privacy protection, programmatic and performance marketing techniques are soon to face a reckoning.
The current landscape of ad tech
As it stands, programmatic and performance marketing have been the most effective and lucrative digital marketing advancements to date. Their ability to use consumer data and behavior tracking to facilitate hyper-targeted ad campaigns has generated unheard-of conversions.
The power of these technologies has given rise to digital powerhouses that have built game-changing direct-to-consumer empires. More traditional brands have noticed the success of DTC giants like Warby Parker, Allbirds, and Dollar Shave Club, and poured millions of their own advertising dollars into the same methods.
These methods have become a virtually foolproof digital strategy.
Change is coming
While programmatic marketing is still going strong, the future of its structure is in doubt.
A major shift in the way we view cookie-based ad tech began in April with Apple’s release of iOS 14.5. In an effort to alleviate users’ privacy concerns, the update included a new “App Tracking Transparency” policy that requires apps to get users to “opt-in” before any data can be tracked outside of the app. In May, analytics data showed that users opt-out of data tracking a staggering 96 percent of the time.
Google, whose Chrome browser currently accounts for 60% of all browser visits, has also announced plans to eliminated third-party cookies sometime in 2022. The goal of the move is to make web-browsing more secure for its users, but it’s also sure to send shockwaves through the digital marketing world.
Programmatic and performance marketing are both heavily reliant on cookies, so these changes are likely to have a dramatic impact on their viability going forward.
These efforts by Apple and Google are both a direct response to a third factor that bring significant change in the advertising world: growing public awareness of data collection practices. As the general understanding of how and what information is collected online grows among users, so does dissatisfaction with and distrust of big data. Because of this, odds are that more and more tech companies will either move away from cookies or give users the option to opt out of sharing data.
So what does this shift mean for programmatic and performance marketing?
What it means
Will the loss of cookies and dramatic reduction in available data spell the end of programmatic marketing? Not likely.
While there will certainly be a big change that sends shockwaves through the ad tech landscape, some are predicting that the resulting system will still function in a mostly similar way. The major difference will be the addition of a value exchange between the companies seeking data and the users that can provide it.
Most likely, advertisers will find new ways to exchange content for time and attention. This could come in the form of offers gated by surveys, perks in exchange for authenticated views, or even unskippable ad formats to force an exchange. This will lead to a reckoning in which marketers will have decide what data is most valuable and what they are willing to give up for it.
Users will see this as a win that goes a long way toward balancing the scales between consumer privacy and big data.
What you should do
For marketers, there are some steps that can be taken now to mitigate the impending loss of third-party data.
Understand what you’ll lose
Do an audit your current digital marketing campaigns to see where you stand. This will help you understand what you’ll be losing when cookies begin to disappear.
Grow your first party data
Start growing you first party data now. Take stock of your current first-party audience and data, then form a plan to build it. This can be done through building your email database and running email marketing campaigns designed to capture valuable audience data.
Look for strategic marketplace partnerships
The loss of third-party will mean the loss of most behavioral targeting options. This makes contextual targeting an important avenue for reaching your most viable prospects. Developing a plan for which marketplace partnerships to pursue will help you stay in front of your ideal customers.
The future of digital advertising will look different. The impending loss of cookies and the behavioral data that they provide will be a major blow for marketers. The system that replaces the current one will look different, but there will still be plenty of opportunity for prepared marketers to capitalize on first-party data and creative marketing strategies.