- Brands must adopt transparent data collection and consider consumer privacy in marketing strategies to address declining consumer trust
- Advertisers must find alternative methods for tracking consumer behavior as third-party cookies phase out and tech giants, Apple and Google, tighten privacy policies
- Here are some ways in which changes in the way consumer data is processed will alter the landscape of marketing in 2023
Over the past two decades, the objective of marketing has been to establish individual connections between brands and consumers, as opposed to data privacy. To reach a wider audience, companies resorted to using television advertisements and leveraged technologies such as third-party cookies, which enabled tracking of consumers across the internet. This enabled them to collect vast amounts of data to serve targeted advertisements to potential customers.
However, the marketing industry is undergoing a transformation due to increasing concern for data privacy from consumers, regulators, and technology companies. By 2023, it is predicted that 65% of the world’s population will have access to modern privacy regulations such as the European Union’s GDPR and California’s CCPA, and the recent introduction of the American Data Privacy and Protection Act (ADPPA) in the US marks a significant milestone in data privacy negotiations. Consumers are concerned about the privacy of their data when shopping online, resulting in a decline in consumer trust in the data collection practices of advertisers. To address this issue, brands must adopt transparent data collection practices and consider consumer privacy concerns in their marketing strategies.
How have the big tech companies reacted to data privacy?
As concerns about data privacy among consumers continue to rise, companies are facing increasing pressure to ensure that their data collection practices are transparent and secure. The beauty retailer, Sephora, recently faced legal consequences for its data collection practices, settling with the State of California for $1.2 million.
With the phase-out of third-party cookies, advertisers are being forced to consider alternative methods for tracking consumer behavior and targeting advertisements. Major technology companies such as Apple and Google have also taken steps to tighten their privacy policies, with CEO Tim Cook calling privacy protection “the most essential battle of our time” and implementing App Tracking Transparency in its mobile software update. Google has also announced a multi-year plan to update its privacy policies in Android devices to align with these privacy efforts.
A new marketing direction for data privacy
In an ever-evolving marketing landscape where consumers have a very high bar for the experiences they demand online, but privacy protection is also paramount, marketers are faced with a dilemma. The solution, according to industry experts, lies in smarter marketing practices, utilizing a variety of formats and innovative technologies that can enhance conversion rates while placing data privacy at the forefront.
Efforts to replace third-party cookies with privacy-focused alternatives are underway, with Andrew Frank, VP analyst at Gartner, expressing his confidence in innovations such as IAB Tech Lab’s seller-defined audiences. In this system, audiences are categorized based on demographics, interests, and purchase intentions, rather than sharing personal identifiers like cookie-based IDs or email addresses.
Zero-party data, a type of data voluntarily and deliberately shared by consumers through activities such as website interaction, messaging, profiles, and quizzes, is also emerging as a crucial trend in the industry. As Vivek Sharma, CEO and Co-Founder of Movable Ink, explains, “The era of third-party data where information is broadcast is coming to an end, and credible companies are no longer betting on it for the future.”
Despite the challenges, there may be potential for a revival in the digital marketing ecosystem. As Anthony Katsur, CEO of IAB Tech Lab, states, “We are on the brink of a third act in digital marketing, with a chance for a renaissance in the industry. While there will be challenges and difficulties, the industry’s ability to innovate and solve the needs of marketers, media companies, and consumers should not be underestimated.”
The future of data privacy and marketing measurement
In 2023, while some priorities persist, the importance of their resolution has increased. The following are several ways in which the realm of data will alter the landscape of marketing.
Building trust and owning datasets
As the emphasis on data privacy continues to grow, the significance of establishing trust with consumers will become increasingly crucial. With the decrease in the availability of third-party data, the value of first-party data has increased significantly, making it imperative for organizations to establish trust with their users and data owners. Providing transparency and control over data usage is crucial to gain such trust and is expected to be a key objective for organizations in 2023.
The significance of owning customer datasets for evaluating the effectiveness of marketing strategies has become apparent to all brands following the implementation of iOS. It is essential to have control over these datasets for accurate marketing measurement. He went on to explain that other sources, such as Meta, Shopify, and Google, cannot provide a single source of truth and that it is the responsibility of companies to determine their own marketing strategies based on their own data.
New signals from aggregated data analysis
As mobile usage continues to rise, marketers are facing challenges in delivering and measuring targeted advertisements to consumers. The phasing out of mobile identifiers (IDFA) by Apple has limited the device data that is available to advertisers, making it more difficult to track consumers at an individual user level, so much harder to report on the effectiveness of advertising using traditional techniques.
In response, smart marketers are leaning more toward aggregated data analysis that doesn’t rely as heavily on tracking users, such as Media Mix Models, incrementality testing, or SaaS solutions like Fospha that combine traditional first-party data approaches with cutting-edge data science to measure clicks and impressions in one privacy-safe view.
Intelligent web page design and email campaigns
In order to improve consumer engagement and access to relevant content, marketers, and publishers are looking to make modifications to web page designs and login-based environments. These modifications will be based on a deeper understanding of the user’s profile and preferences.
Moreover, the use of intelligent email campaigns and artificial intelligence (AI) will become increasingly important in capturing consumer data and improving the overall user experience. AI will be utilized to understand web behavior and learn from the way consumers interact with the website, in order to capture their data. Additionally, AI will also be used in email campaigns to suggest recommended related content to audiences. The use of AI to capture data from the first letter typed, rather than only upon form submission, will also play a crucial role in improving marketing and advertising efforts.
Deeper data insights from AI, and more humane marketing work
The integration of AI in the form of analytics or generative AI into the marketing workflow has the potential to transform the work environment for marketing professionals.
Instead of leading to an AI-dominated dystopia, the incorporation of AI in the marketing field is expected to result in even more personalized and high-quality customer experiences. This integration will also bring a more humane work environment for marketing professionals, offering greater flexibility in terms of location, work hours, and the ability to apply their creativity, expertise, and empathy in a more versatile manner.”
The key takeaway
In conclusion, as the marketing industry continues to evolve and adopt new technologies, data privacy has become a pressing issue that cannot be ignored. By adopting transparent data collection practices and considering consumer privacy concerns, brands can establish trust and build lasting relationships with their customers. Furthermore, implementing appropriate measures to measure the effectiveness of marketing campaigns while still maintaining data privacy will ensure that brands remain competitive in the industry.