Marketers are adjusting their advertising strategies as consumers grow more aware of digital privacy, and technology companies give them a variety of tools to limit data-sharing. Amid these challenges, new identity solutions and ad attribution methods are being developed to help marketers improve their audience targeting, according to several executives who participated in a recent Advertising Week New York panel.
The goal is to make advertising addressable, or personalized for households and individual consumers on any connected device, including smartphones. At the same time, marketers must also be mindful of respecting consumer privacy and cultivating their own sources of data about their customers.
"We are at this interesting tipping point where users are no longer passive recipients of targeted ads, but instead are actively consulted in this value exchange offer through advertising," Meagan Martino, U.S. agencies and advertisers lead at MoPub, said during the Oct. 20 panel. "The implications of this new paradigm mean that the old way of audience targeting — data management and measurement — needs to be reimagined."
The latest hindrances to mobile addressability are already evident in the quarterly reports of companies that sell advertising in their apps. Social media companies Facebook and Snap in the past week said they saw slower revenue growth in the latest quarter, the first full three-month period since Apple introduced app-privacy rules. The iPhone maker in April began forcing apps to ask customers for permission to be tracked online, making it an opt-in feature instead of defaulting to opt-out.
A clearer picture will emerge of how Apple's privacy changes have affected brands as more companies report their results and researchers gather bigger pools of data about the mobile ad market. Spending on mobile advertising was forecast at the start of the year to grow 17% to $123.6 billion as marketers sought to engage people on their preferred channels and devices, according to researcher eMarketer.
Foretaste of cookie-less future
The effects of Apple's privacy changes should inspire marketers to prepare for even greater upheaval when Google ends support for a common tracking technology in its popular Chrome browser. The tech giant in June delayed plans to phase out third-party cookies until 2023, giving brands, ad agencies and ad-tech firms more time to adjust.
"There's still a lot of work that really has to be done to develop and roll out privacy-first solutions," Kayleen Ohneck, director of verified data and technology at Publicis Media, said during the panel. "The core principles of interoperability and addressability of privacy-first solutions are absolutely critical for building the right cookieless framework moving forward."
"The core principles of interoperability and addressability of privacy-first solutions are absolutely critical for building the right cookieless framework moving forward."
Director of verified data and technology, Publicis Media
The idea of addressability has evolved from a focus on one-to-one advertising to understanding privacy-first methods of reaching consumers, Ohneck added. Those strategies can include everything from contextual advertising on online marketplaces like Amazon and Walmart to using encrypted authentication solutions that don't reveal personally identifiable information (PII).
"The need for advertisers to continue to future-proof their business is stronger than ever in order to make announcements from tech companies like Google and Apple — or the next round of legislation we're bound to get — be less disruptive in the future," Ohneck said. "Advertisers are researching and exploring the tactics that allow them to build a library of solutions that balance scale, privacy and overall addressability."
First-party data reigns
Limits on data-sharing have pushed marketers, media owners and app publishers to develop their own sources of consumer information directly from consumers. First-party data can be mined for indicators of purchase intent and receptivity to promotions and other offers.
"[We] strongly believe in first-party data as being the most important value set that can help advertisers connect with their audiences that they're looking to reach," Stacy Kim, senior director of inventory partnerships at demand-side platform The Trade Desk, said during the panel discussion. "When you think about connecting with your audiences, creating that sort of positive consumer experience is a key part of succeeding in this new environment as well."
First-party data underpins ad addressability and personalization as well as the ability to measure campaign effectiveness. Marketers need to ensure their first-party data is accurate to harness its power to drive business outcomes.
"First-party data is genuinely only as good as the consent and the strategy and the technology that is absolutely going to power it," Ohneck said. "Advertisers are getting their house in order, so to speak, investing in technology that enables them to centralize and operationalize their own first-party data."
Identity solutions for mobile
As consumers divide their time among a wider variety of electronic devices, including mobile phones and tablets, the need for privacy-centric identity solutions has swelled. The Trade Desk is among the companies that have developed a method to track online audiences without revealing PII. The company's Unified ID 2.0 is built on anonymized email addresses that are gathered when a consumer logs into a website, mobile app or streaming app.
"We're looking for optionality and something that's future-proof, a framework that's open source and completely free," Kim said. "We've designed the UID2 to be interoperable with others because we frankly don't believe in 'one ID to rule them all.'"
Marketers are looking for flexible identity solutions that outlast the third-party cookie, a technology that has underpinned the digital advertising market since the mid-1990s.
"The goal is to not replace the cookie with something just as problematic," Publicis' Ohneck said. "We need to ensure we're being extremely smart about identity approaches. Every partner, whether an advertiser or publisher, has a role to play in this new idea of value exchange and creating the internet with the consumer."