What you need to know about data in marketing

It finally has begun: On Jan. 4, Google disabled third-party cookies for 1% of Chrome, or approximately 30 million users. The move represents the first tangible step in the search giant’s plan to phase out the tracking technology for all users in the second half of 2024 — a change that will eliminate a long-standing digital advertising tool.

With the announcement in January 2020 that it would eventually kill the third-party cookie, Google set into motion a race for the advertising industry to build, test and adopt alternative targeting and tracking methods, whether using its Privacy Sandbox proposals or those crafted by other players.

But while a panoply of alternative IDs, identity graphs and data clean room solutions have cropped up in recent years, the missing piece in solving the post-cookie problem could be an application of generative artificial intelligence (AI), the buzzy technology that has captivated the worlds of advertising, technology and general culture for more than a year.

"To remedy the rift of third-party cookie depreciation, it’s crucial for marketers to lean into AI to supercharge strategies utilizing zero- and first-party consumer data," said Anjali Yakkundi, vice president of product marketing at Movable Ink, in emailed comments.

"AI can analyze consumers’ digital behavior like browsing history, purchasing patterns and engagement to provide deeper audience understanding while creating tailored experiences,” the executive added. “Moreover, brands can expand AI and ML within predictive models that garner insights into consumers’ likely next steps, allowing for proactive and strategic development of outputs that meet the consumer where they are before they even know they’re going to be there."

The power of AI

Much of advertising’s focus on generative AI to date has centered on the ability to create text and image assets that can be produced quickly and help marketers meet longtime goals around personalization-at-scale. But the ability of AI to sift through and analyze data with incredible speed and accuracy could help marketers make up for the signal loss created by cookie deprecation.

“2024 is going to be the true rise and scaling of additional intent signals,” said Lynda Clarizio, a media industry veteran and co-founder of early stage venture capital firm The 98. “For a long time, we’ve had web-tracking intent and social intent. Now we’re going to have the rise of transaction intent and contextual intent.”

Generative AI needs three things to work, according to experts: proprietary first-party data, the infrastructure to process that data and data scientists to develop the data to train new models. As applied to advertising, those requirements will put tech players like Google and Amazon in the “driver’s seat,” Clarizio said. 

“We’re really ‘Back to the Future,’” Clarizio explained, connecting the rise of digital walled gardens to the previous walled gardens in TV advertising.

“Now we’re going back in the other direction, and some of that has been because of deprecation of cookies and the inability to use data signals in a broader way,” Clarizio added. “You’re really restricted to first-party data, which makes sense from a privacy perspective but reinforces the strength of some of these larger players.”

However, other players are beginning to leverage generative AI, using the tech for search re-ranking in a fast, effective way and to deliver a more robust, personal experience to users. Other use cases of the technology are still being developed.

“AI will become more prevalent as agencies and talent find practical applications to reduce costs and speed up processes,” said Rob Davis, CMO and president of independent agency Novus, in emailed comments. “This will expand beyond media optimization and data compilation — for example, applying generative AI to simulated focus groups for cost-effective insight generation.”

The race for data and identifiers continues

The death of the cookie will be a major test of efforts to acquire marketing first-party data, as well as zero- and second-party data, in a privacy-safe way. A continued push for data could encourage brands, agencies and publishers to establish more data co-ops that allow entities to share data that can then be used to fuel generative AI efforts.

“I’ve been looking for a long time for the rise of data co-ops that really take first-party data from different web properties and combine that together to rival something that Google does,” Clarizio said. “Maybe you’ll see more of that in 2024 because generative AI will enhance the ability to create that. It’s like identity graphs on steroids.”

Along with solving for marketing first-party data, the industry in 2024 will also have to contend with a still-fragmented landscape of alternative ID providers, including The Trade Desk’s Unified ID 2.0, LiveRamp’s RampID and dozens more, that are jockeying for market share and offering different use cases.

“If you’re a buyer, it’s just mass confusion,” said Eli Heath, head of identity at Lotame, which offers the Panorama ID. “Part of this has resulted in paralysis, because it’s like, ‘What do I use? Is there going to be a winner-takes-all?’”

Marketers should not expect one ID to rule them all. Instead, they will likely have to coordinate behavior-based addressability and contextual strategy in a variety of ways, Heath said.

“It’s really going to be a basket approach, not only within the cookieless identifier spaces, but also in the general strategies and tactics that you deploy within programmatic,” the executive added. “I really think it's going to be all over the place.”

Pushing back on Google

Along with ad-tech and agency-based solutions for data and identifiers, marketers in 2024 will still have to grapple with the elephant in the room, Google. If the company’s latest timeline holds, there is still much work to be done before the second half of 2024, and still more questions than answers around verification, measurement and attribution, according to Paul Bell, president of ad-tech firm 33Across. 

“Once the buy-side sees results that can be measured by marketers and/or a trusted third party (i.e. not just Google), Google and the market can confidently move beyond 1%,” Bell said in emailed comments. “To make this transition smooth, Google needs to ensure partners that they can tie their marketing dollars back to a trusted conversion metric. Based on the amount of advertising dollars and the number of partners they need to put at ease, this timeline feels aggressive.”

To assuage concerns about a cookieless future, Google has continued to develop its Privacy Sandbox proposals. Throughout the process, many groups have pushed back on Google’s claims about the effectiveness of its new offerings. Early tests still demonstrate “real challenges,” per the IAB Tech Lab. 

In kind, Google has pushed back against a range of objections to Privacy Sandbox around sufficiency and complexity via a blog post that suggests the company is committed to its timeline and plan.

“We believe the current Privacy Sandbox APIs — generally available in Chrome since September — are ready to carry the ecosystem into a more private future. And we’re committed to pushing privacy-preserving technologies forward for years to come, both in terms of privacy and utility,” wrote Victor Wong, senior director of product management for the Privacy Sandbox.

Still, advertisers should not put all their eggs in the Privacy Sandbox and look to Google — still a dominant player in the market — to be a “savior of the advertising world,” said Mathieu Roche, CEO and co-founder of ID5, in emailed comments. 

“It’s important to remember throughout all of this that there are a number of alternatives including universal IDs, Identity Graphs and Data Clean Rooms that have proven to be effective in cookie-free browsers like Safari and Firefox,” Roche said. “Advertisers only have a few months left to ensure they can effectively engage with their audiences and measure results in the long term.”

The best-prepared marketers will not wait any longer to get their cookieless plans in motion. Plus, the second half of 2024 deadline is still vague and could happen sooner rather than later: Lotame’s Heath predicts that more of the landscape could be cookieless at some point in Q3 to not disrupt the critical Q4 ad-buying period.

Advertisers wake up

A recent survey conducted for the PrimeAudience ad network found that 88% of U.S. marketers feel confident about cookie deprecation, with more than half already testing the cookieless future. Still, almost a third don't know how to use Google’s Protected Audience API (formerly known as FLEDGE), even though 68% plan to use the Privacy Sandbox proposal in 2024. Beyond Google, more than half (53%) of marketers are looking to AI as part of their solutions.

“While it is promising to see U.S. marketers feel confident about their preparation for the cookieless world, there is a desire to continue to put effective solutions in place,” said Mateusz Rumiński, PrimeAudience vice president of product, in a statement. “We believe that new advertising technologies in combination with generative AI and optimal use of first-party data can lead to a thriving advertising ecosystem.”

In line with PrimeAudience’s survey, some observers have seen large parts of the ad industry finally wake up to the reality of what the death of the cookie means to advertising, a shift that will only continue as the clock ticks down.

“There is a wave of action that’s beginning to happen, and I think reality is going to start slapping the industry in the face,” said Matt Hertig, CEO of analytics company ChannelMix. “This is probably one of the most monumental shifts in how we understand marketing’s impact in the past 15 years… and that’s the real excitement that AI can inject back into the marketing analytics space.”

The quickly growing retail media channel was a hot topic at Advertising Week New York 2023 in October, with some attendees expressing the desire for retailers to eventually “decouple” their first-party data and allow that information — a rich asset amid cookie deprecation — to be used for a wider array of applications.

While a full peek behind the curtain may be a long shot, brand marketers are clearly calling for greater flexibility in retail data usage and these demands appear to be resonating. During a session on Oct. 16, Kroger Precision Marketing (KPM) at 84.51°, the retail media arm of grocery giant Kroger, announced it will be rolling out a solution with The Trade Desk addressing decoupling.

“[Retail media networks] are sitting on something that’s so incredibly powerful, but in some cases, we are trying to solve for many things, and the best way to do that, potentially, is monetizing that data and allowing your advertisers to go and be very specific through self-service or a managed service,” said Aracely Moreno-Mosier, senior director of omnichannel marketing and head of retail partnerships at PepsiCo, during a panel at the conference. “If we can look at it from that perspective, I think that could open up a whole other opportunity in terms of growth.”

KPM’s solution was born out of advertiser feedback and aims to let partners use KPM purchase data from their existing “seat” on The Trade Desk, a demand-side platform (DSP). Seats are the licensed accounts that ad buyers are assigned on DSPs to be able to conduct transactions and access other features.

“This fall, we’re launching a new programmatic offering with The Trade Desk where we’re decoupling our audience, the inventory and the measurement data,” said Jill Smith, vice president of media sales at KPM, during the talk. “In terms of transparency, we’re now allowing brands to activate from their own seat, enabling our retail data to be added onto that buy. It comes from your seat, we don’t want to compromise any brand safety, any reach and frequency.”

“We want to make it easy to offer our data and also offer that daily measurement,” Smith added.

A pivotal moment

As retail media continues to grow, one big question hanging over the channel is whether retailers will follow legacy digital platforms — the Googles and Facebooks of the world — in building walled gardens where getting a transparent view into data is difficult. Decoupling could be the answer brands are looking for.

Retail media networks showing signs of becoming more open with their first-party data arrives as standardization across the channel sits top of mind. Publishers are aware of frustrations with the current model and are seeking to preserve momentum as retail media networks scale to be profit drivers. The retail media category on the whole is forecast by GroupM to surpass the combined revenues of linear and streaming TV by 2028. Kroger has helped the Interactive Advertising Bureau develop its retail media measurement standards, as has Albertsons, a rival the grocer is attempting to merge with if it can clear regulatory hurdles.

The theme of the Advertising Week panel, which also had a representative from Bayer and was led by The Trade Desk, was around “retail data,” a term that doesn’t carry a shared meaning, exemplifying the fractured nature of the current landscape.

“I think we’re at the interesting toddler years of retail media and retail data,” said Stephanie Paterik, the panel’s moderator and general manager of The Trade Desk’s editorial division.

Among advertisers, 81% use retail data in their campaigns, according to a study conducted by The Trade Desk’s intelligence unit in conjunction with Materialplus. But definitions of what “retail data” means varied: 44% of those surveyed believed it is data that retailers collect about their business; 40% said that it is data collected by advertisers around purchasing trends; and 16% said it is data collected by researchers on purchasing trends.

Panelists also had divergent perspectives. Smith stated that KPM thinks of retail data as Kroger’s first-party shopper data applied for media planning and buying for both offsite and onsite channels. PepsiCo’s Moreno-Mosier, whose role supports the food and beverage company’s commercial and sales operations, had a broader perspective.

“For us, it’s really around anything that can inform the business. Retail data can be inventory levels, it can be how things are moving within the store,” the executive said. “It absolutely is about the shopper behavior, but it can inform your promotional calendar.”

Broadening use cases

A push for less rigidity around retail data comes as marketers try to wring utility out of the channel beyond lower-funnel ad formats like sponsored product listings. Experimenting with regional brands was one prospect cited by PepsiCo. NatuChips, a plantain snack focused on Latin America, might play well in certain areas of the U.S., like the East Coast, while not warranting a national promotional blitz. Retail data could be used to target localized campaigns more precisely to promote trial and brand awareness.

PepsiCo at the time of the panel was also running a pilot around what Moreno-Mosier called household elasticity. A diehard customer, or someone with “low elasticity,” might get served less steep discounts since they’re more likely committed to the marketer’s products, which include Pepsi, Doritos and Quaker Oats. Similarly, consumers of different means may get served more tailored ads with the aid of retail data as inflationary pressures continue to affect messaging strategies.

“We’re seeing the bifurcation of wealth happening more and more. It’s getting much more aggressive,” said Moreno-Mosier. “I think there has to be a win for the shopper in this case.”

Sponsored content

By Acronym

In the digital marketing industry, there has been much lament about the impending demise of the cookie and how this will change the way marketers measure and optimize their campaigns. With digital ad spend projected to exceed $600 billion, the ongoing concern around cookies isn’t going anywhere soon as marketers brace for this shift and have concerns about how to adjust.

The great cookie divide: first-party vs third-party

It’s true that the longevity and, therefore, reliability of both first- and third-party cookies are changing. However, there is a distinct difference in the changes between third- and first-party cookies. Here are some essential differences to understand:

• Third-party cookies have been phased out by Google in the Chrome browser for 1% of users starting January 4, 2024, with the goal being a full phase-out by the end of this year. 
  
  However, Chrome is the only major browser left that hasn’t substantially phased out third-party cookies; so, for 34% of browsers worldwide the present-day scenario is currently ‘third-party cookie-less’.
• For both first- and third-party cookies, browsers that clear cookies automatically after a set number of days, such as Apple’s Safari browser, will influence long-range user tracking. No cookies are safe from this type of restriction.

The winds of change: legislation, litigation, and consumer pressure

These changes are primarily driven by increased legislation, numerous lawsuits, and consumer pressure along with some existing measurement challenges. Below are some of the most recent changes impacting the shifts in data analytics restrictions for marketers:  

• Legislation: Privacy laws around the globe that restrict the use of cookies without user consent, such as GDPR, CCPA, ePrivacy Directive, and a plethora of others. These laws require marketers to obtain explicit and informed consent from users before collecting and processing their personal data, which can reduce the reach and effectiveness of cookie-based advertising and analytics. 
• Industry: Browser policies that block or limit third-party cookies, such as Safari's Intelligent Tracking Prevention (ITP), Firefox's Enhanced Tracking Protection (ETP), Chrome's Privacy Sandbox, etc. These policies aim to protect user privacy and security by preventing cross-site tracking and fingerprinting, which can undermine the accuracy and reliability of cookie-based measurement and targeting. 
• Consumer: User preferences and behaviors that favor more privacy and control over their online data, such as using ad blockers, deleting cookies, or opting out of tracking to various degrees. These preferences and behaviors reflect the growing awareness and concern of users about how their online data is collected and used, which can reduce the availability and quality of cookie-based data and insights. 

Navigating through challenges: The bright side of the post-cookie era

There’s plenty happening simultaneously, but the sky is certainly not falling. This transition provides marketers with an opportunity to become more sophisticated in the way they analyze and optimize marketing programs. Traditional last-touch attribution models are just not cutting it anymore.

Medium to large-size businesses with a multi-pronged strategy have a plethora of options to assess spend effectiveness outside of cookie-dependent platform data, including marketing mix modeling, conversion, brand lift studies, data clean rooms, multitouch attribution models, and many other methods.  Additionally, there are technologies to help target your most valuable audiences including contextual advertising, cohort-based advertising, and device graphs.

With these tools, marketers do not need the invasive, granular tracking that cookies have so notoriously enabled to make smart investment decisions. Embracing the increased restrictions on cookies as a clear signal from your customers for a less invasive digital experience shows them that you understand their concerns and want to earn their trust. 

Strategies for success: Best practices in the post-cookie world

To successfully navigate the post-cookie era, marketers should consider the following best practices:

1. Utilize first-party data and consent management platforms to collect and store user information in a compliant, transparent manner.
2. Explore alternative methods and technologies, such as contextual advertising, cohort-based advertising, and device graphs, to effectively measure and target audiences.
3. Embrace a customer-centric and value-driven approach to marketing that focuses on building trust and loyalty with users, rather than relying on intrusive and irrelevant ads. 

Don’t tackle it alone, seek expert help. Refine your strategy and update your implementation rapidly by getting assistance from trusted digital marketing agencies like Acronym, which specializes in digital intelligence.

McDonald’s has seen a marketing resurgence in the past few years, partnering with a cadre of pop culture icons and courting favor with young consumer groups that once spurned its fast food. Helping drive the transformation behind the scenes is a bigger prioritization of first-party data, an area where the Golden Arches owner previously lagged. Key to McDonald’s success on the data front has been the brand’s app and a MyMcDonald’s rewards program introduced in 2020, assets it now views as instrumental to growth.

“We really only moved into the space of putting ourselves in the position to have power over first-party data ... when we launched the MyMcDonald’s rewards program. We had an app, but the reality was the app was, at its earliest, a display menu,” said Tariq Hassan, chief marketing and customer experience officer at McDonald’s USA, at an event hosted by the Digital Place-Based Advertising Association (DPAA) in October 2023. The DPAA is a trade group for the out-of-home advertising industry and the discussion was moderated by Barry Frey, its president and CEO. 

McDonald’s debut of its loyalty offering in 2020 aligned with a rediscovery of its marketing mojo through efforts like a Famous Orders platform revolving around the preferred meals of celebrities including Travis Scott and Mariah Carey. More on-trend campaigns served as a course correction from a period of directing too much energy toward “haters” — fast food is nothing if not a combative category — and transactional ploys like limited-time offers, said Hassan.

“We were trying to buy our way back and we all know what that story looks like,” said Hassan. “But Famous Orders gave us our swagger back.”

The executive, who joined McDonald’s from PetCo, admitted that the QSR was a latecomer to realizing the potential of first-party data but now operates with the sophistication of a customer relationship management platform. That evolution has provided a major chip in winning over Gen Z, the golden goose for many QSRs that spent years fighting to attract health-conscious millennials. 

“In a digital-first youth market, data is a currency. It’s a form of language,” said Hassan. “If we can use it the right way to create value, you’re going to create deeper relationships.”

The mandate around data acquisition has been aided by McDonald’s massive scale and name recognition. Roughly 90% of U.S. consumers set foot in a McDonald’s at least once per year, according to estimates shared by Hassan, while nearly 60% do so on a quarterly basis. The McDonald’s app was downloaded 40 million times in 2022, and the brand’s total “contactable” user base today is north of 60 million, per Hassan.

“The level of data that we’re now playing with [when wedding first- and third-party data] has fundamentally changed the way we think about the business,” said Hassan. 

Tapping into culture

Implementing big changes in organizational thinking can be complex for a company as sprawling as McDonald’s. The brand has a vast network of franchisees who have traditionally focused on areas like driving daily transactions. A wider data purview means McDonald’s is putting more attention toward lifetime customer value and spending on cost per acquisition.

“For our franchisees, that is a seismic shift,” said Hassan. The marketing chief described his work with franchisees — who can be a combative bunch — as the “congressional part” of his career.  

“At the end of the day, I spend a percentage of all of our operators’ money,” added Hassan. “I’m accountable to that ... It’s a great responsibility.” 

While the data-driven pivot has a lot of moving parts, McDonald’s has been on a winning streak. Heading into October 2023, the chain experienced 83 consecutive weeks of comparable growth and traffic growth, a new record, Hassan said. McDonald’s U.S. comp sales were up 10.3% in the second quarter of 2023, a bump aided by viral marketing like a nostalgia-themed celebration of mascot Grimace’s birthday. 

Despite the momentum, Hassan noted that his organization has opened itself up to addressing failure head-on as it looks to preserve a lead in cultural marketing. The brand has started hosting quarterly celebrations of what the CMO termed “amazing almosts,” concepts that didn’t quite get over the finish line or meet internal expectations, to develop a startup mentality and learn to quickly pivot.  

“It’s about putting the right objectives in place, collaborating, approaching it the right way and then having sound reasons why you didn’t achieve it,” said Hassan. “How do you start to bring a pivot mindset into a corporate culture, that it then begets success?” 

Pop-Tarts Bites, the snack-sized version of the popular toaster pastry, is striking a finer balance between emotionally led and functional messaging with help from data-driven solutions. The brand, launched in 2018, enlisted the help of partner VidMob for an effort that ran on Meta’s Instagram and Facebook and sought to uncover what types of ads resonated best with three different consumer groups — existing buyers, lapsed ones and new customers — at various stages of the marketing funnel. 

Like many legacy CPG marketers, Pop-Tarts Bites is attempting to refine its approach to performance marketing to draw a clearer line between online ads and buying behavior, as brand-building is less of an issue for established names in the category. At the same time, the brand is trying to unlock its next big audience in Gen Z, eyeing technology as a way to deliver the needed level of personalization to engage the young cohort. 

“We have many brands in our portfolio that have great awareness and unaided awareness,” said Nicole Vinson, vice president of global digital, media and omni-shopper experience at Kellanova, the snacking company that was formed when the Kellogg Company formally split into two businesses in October 2023.

“You’ve got to start to think about … balancing the short and long term of your investments and how you’re driving that conversion because it’s not all just about awareness and it’s not all about purchase,” added Vinson. “There is a middle [ground] in there.”

Staying hygienic

Pop-Tarts Bites’ collaboration with VidMob was less of a comprehensive overhaul of the brand’s strategy than an attempt at conducting a bit of marketing hygiene, assuring its best practices aligned with ever-changing platform mandates to create what Vinson described as an “iterative feedback loop.” Insights gleaned from the VidMob pilot could then be scaled and potentially adopted by other offerings in the Kellanova portfolio. Kellanova’s snack portfolio includes Cheez-It, Eggo, Rice Krispies Treats and Pringles. 

“Every program, every campaign, every piece of creative, ideally, would start to go through a similar process,” said Vinson. “It’s not that we’re trying to get to a paint-by-numbers … It’s to really understand what pieces of creative are working the hardest to drive that business outcome.”

The tweaks to Pop-Tarts Bites’ ads, which appeared in Instagram Feeds and Stories and Facebook In-Feed placements between April and June 2023, were relatively subtle but made a difference results-wise. One ad was tested with an emotional theme, promoting Pop-Tarts Bites as a morning snack with a “grab your bites” call to action (CTA). The same image with a more functional message centered on flavor and texture, including an emphasis on the pastry product’s “soft-baked” quality and a sharper “Get snackin’ today!” CTA, delivered superior ad recall, engagement rates and in-view impressions. The company declined to share more specific results.

“Once you identify an insight, it’s about then validating that and putting it back into the ecosystem again,” said Vinson. “It definitely met the expectations and it helped to give us more data to support the hypotheses that we had. The whole idea behind data-driven marketing is that you're using the data to remove the subjectivity.”

Eye on AI

Pop-Tarts Bites’ experiment with VidMob aligns with Kellanova’s ongoing bets around data, machine learning and artificial intelligence, areas that have boomed in the wake of ChatGPT and as marketers face down the deprecation of third-party cookies. AI and ML helped the companies better isolate and assess specific elements of the Pop-Tart Bites’ advertisements, including the CTAs, to provide “optimal treatments,” according to Vinson. 

“All of this is about [getting] to more personalized types of messaging so that we can better connect with our consumers so that they can feel unique, they’re individual — we’re not talking to them as if they’re one homogenous group,” said Vinson. “This is where personalization comes into play. It’s not that we’re trying to get to one-to-one [marketing].” 

Kellanova is also attempting to build a stronger bridge with Gen Z consumers, a notoriously picky group. That demographic represented some of the new customers that Pop-Tarts Bites was vying to gain a deeper understanding of through the VidMob pilot and refinements to its messaging. 

“Gen Z is another audience group that we can’t ignore. We can’t talk to every group the same,” said Vinson. “You can drive mass reach but then you also need to blend that with personalization and really understanding your different audience cohorts.”

Spending on marketing and advertising in the U.S. will grow 10.7% in 2024 to reach $570 billion, according to the 18th annual forecast from consultancy Winterberry Group. The growth rate is more than double what was seen in 2023, a period weighed down by macro pressures. Investments in political advertising, connected TV (CTV) and connected commerce, an umbrella term that includes retail media, will boost the industry in 2024. 

Winterberry Group is aligned with other forecasters in believing 2024 will be a more vibrant year for ad spending than 2023 while noting that robust top-line growth does not tell the full story. Case in point: the upcoming election cycle, which will provide a boon for media owners, including in the beleaguered offline arena, but give consumer brands pause as they look to avoid getting tangled up in divisive rhetoric and focus instead on more targeted efforts. 

The upshot is that creativity will be impacted in the months ahead, echoing a staid 2023, while local advertising prices could rise in a cluttered environment for inboxes and airtime. The consultancy expects political ad spending to reach $17 billion in 2024, accounting for roughly 30% of total growth during the year. Tailwinds from political campaigns also mask that underlying growth trends are stabilizing after a wild few pandemic years.   

Many key channels are undergoing transformation that will bring ups and downs for brands and publishers alike. The live sports space, one of the last “moats” around linear TV, is jumping to the streaming arena, as evidenced by Amazon’s deal with regional operator Diamond Sports Group. CTV spending is expected to grow over 30% YoY in 2024 to hit $33.1 billion as advertisers chase emerging opportunities and a proliferation of ad-supported options. 

Networks will respond to these shifts by taking a more disciplined approach to dealmaking, bundling linear and digital buys together and providing better audience-targeting tools, according to Winterberry Group. Blurring lines between linear and digital will still deliver measurement headaches, with more than half (53%) of surveyed TV advertisers citing a lack of common metrics across channels as a top challenge. Pains stemming from data silos were a prevalent theme in Winterberry Group’s findings. 

Amid the death of the cookie, marketers will run experiments with alternatives like first-party identity solutions, per the report, resulting in a boom for the data-driven marketing segment. Obsessions with generative artificial intelligence (AI) and machine learning (ML) will be another theme even as consumer appetites are an open question.

Attempts to tackle cookie deprecation will buoy data-driven marketing but could divide marketers’ attention from fraud, waste and transparency problems. One rising juggernaut is connected commerce, a bucket that encompasses retail media networks. A larger profile for the channel comes with increased complexity around measurement and media buying, a pain point that could be solved by investments in areas like ML and AI, per Winterberry Group.  

“Investment in data-driven channels will flourish in 2024, with spending on data, data services and data infrastructure predicted to top $36 billion — representing a 13.9% increase from last year,” said Bruce Biegel, Winterberry Group’s senior managing partner, in a statement attached to the report. “We believe the market is poised to reclaim much of the growth momentum that’s been lacking for much of the last year.” 

The chase to realize marketing use cases for shiny generative AI tech could also outstrip consumer interest and clash with governance concerns around personal data handling. Just half (51%) of surveyed consumers have tried out software like OpenAI’s ChatGPT and DALL-E, suggesting media hype is ahead of adoption, with Winterberry Group eyeing 2026 as a more likely window for proper acceleration for the category.

As third-party cookies fall out of favor, advertisers have been seeking alternative methods of ad targeting. Such efforts have resulted in the emergence of retail media networks that rely on troves of shopper data, along with other solutions oriented around first-party data. However, while larger brands can leverage these emerging tools to their advantage, the same isn’t always true for small and medium-sized businesses (SMBs). Nearly 90% of SMBs are worried about losing access to third-party data, according to a study by UpCity.

Breaking out the numbers further, 89% of businesses with 100 or more employees and 82% of businesses with fewer than 100 employees hold such concerns. With Google beginning to phase out cookies and increased legislative scrutiny surrounding consumer data acquisition in general, the sense of pressure is amplifying quickly and will be a key discussion point in going forward.

The survey of 300 SMB marketing analytics professionals was conducted using Pollfish in October 2023. Survey respondents were screened according to their role in overseeing analytics and data management. 

Small business, big data

There are many reasons why SMBs have turned to data collection and analysis, according to UpCity. Seventy percent of survey respondents reported using data for more targeted campaigns and 59% reported using data to improve market forecasting. Over half of participants (57%) use data for more defined market segmentation while 36% do so for improved attribution modeling and 34% for better A/B testing. 

Return-on-investment (ROI) was ranked at the top of the most important types of data for SMBs, with 47% of survey respondents indicating this is the case. In second place was customer lifetime value at 36%, followed by customer acquisition cost at 34%. Conversion rate was of importance to 31% of respondents, website traffic volume to 29% and engagement metrics to 28%, according to the report. 

While data brings benefits, it also brings heavy costs. Thirteen percent of SMBs report investing $901 or more in first-party data per month, compared to just 10% of SMBs who invested that amount in third-party data. 

First-party data is more likely to yield a higher return when compared to third-party data. Sixty percent of SMBs see an ROI of $30 or more per dollar spent with first-party data, compared to 50% getting a similar return for third-party data. Third-party data was also more likely to deliver an ROI per dollar spent of $0 or less, with 10% of respondents seeing this with third-party data compared to just 2% for first-party data.

Collection starts now

While first-party data has a clear advantage over third-party data, its use and collection can be costly. Smaller companies may have a harder time accessing consumers as the shift to first-party data continues. However, SMBs cannot wait to invest in first-party data, according to the UpCity report. 

Digital marketing agencies may prove a lifeline for SMB marketers in the coming years. Ninety-two percent of respondents who utilize third-party data report looking to digital marketing agencies for support, with 56% already doing so and 36% planning on doing so in the next year. 

Data sharing also provides a valuable opportunity for SMB marketers. While on their own SMBs cannot match the data power of massive corporations, data sharing can help amplify their abilities. Forty-seven percent of SMBs already share their data with other SMBs and an additional 34% plan on doing so. 

Software and consultants remain another option for data help, with 61% of SMBs already investing in software and another 32% planning on doing so in the next year. Over half (47%) of respondents have already hired a freelance marketing agency or consultant and 42% plan on doing so in the next year.

A number of discussions at Advertising Week’s 2023 New York conference, which was held from Oct. 16-19, revolved around how marketers can build consumer trust and loyalty for their brands. DoorDash CMO Kofi Amoo-Gottfried at a Thursday session reminded attendees that such strategies are more difficult than many imagine.

“It’s a bit of a highfalutin notion, the idea that people can be loyal to a brand, but people are not loyal to their partners,” Amoo-Gottfried said to chuckles from attendees. “We will never be in a position where someone is 100% loyal all the time. But how do you earn more and more of their business?”

The DoorDash executive’s position was echoed by fellow panelist Dane Mathews, Taco Bell’s chief digital officer, who noted how even a brand like Taco Bell that has strong consumer preference must work to maintain it in a highly competitive QSR landscape.

“There are lots of entities … trying to get better at it and trying to shave away that preference. You’re always trying to optimize, you’re trying to get better at it and it has nothing to do with what you’re doing today,” Mathews said. “You need to hold on to how you exist [now], but you need to strive and find new ways to drive engagement.”

Tapping ‘discrete audiences’

Both DoorDash and Taco Bell have worked to drive engagement through subscription services with the DashPass and Taco Lover’s Pass, respectively. DashPass gives DoorDash a sense of its most loyal users’ engagement habits, while the Taco Lover’s Pass seeks to drive greater frequency from an audience that already has high frequency.

“Product innovation needs to be really tied, not to broad-based audiences, but to discrete audiences that you’re trying to grow specific, defined behaviors out of,” Mathews explained. “The metrics show where and how to do that.”

DoorDash measures loyalty in a number of ways, with retention and frequency as key metrics. For Taco Bell, consumer behavior is most telling. As an example, Mathews noted that the brand sees devotees, internally dubbed “Purple Knights,” who help other consumers learn about new Taco Bell products at launch on social media.

“We look at the sphere of loyalty beyond just purchases,” the exec said. “It’s about, how do you rep the brand and how do you rep other consumers that want to be engaged with the brand?”

Central to establishing brand loyalty is trust. Amoo-Gottfried noted two dimensions of trust: doing the job for which you’ve been chosen by a consumer and being aligned with a business purpose and how it operates. For most consumers, the latter is secondary to the former. 

“Do I care about your highfalutin purpose? Turns out people don’t — they care about me doing the thing they hired me for,” the exec said.

Coming together for Taco Tuesday

Taco Bell and DoorDash formalized their relationship in November 2022 when the chain added delivery to its rewards app. But at first, the relationship between companies was simply transactional, Amoo-Gottfried noted.

“We [wanted] to figure out how to get it to a different place,” he said. “How do you build more engagement? How do you build more trust and get to the place where we’re both deeply invested in growing each other’s businesses?”

The companies had a major opportunity to do so as part of Taco Bell’s efforts in 2023 to “liberate” the phrase “Taco Tuesday,” which had been trademarked by Cheyenne, Wyoming-based chain Taco John’s for years. Taco Bell’s campaign, which included an online petition and spots with LeBron James, was born out of the “ridiculousness of the whole situation” wherein mom-and-pop taquerias would sometimes receive cease-and-desist letters for using the phrase “Taco Tuesday,” Mathews explained.

Taco John’s later abandoned the trademark and launched a marketing push of its own, which Taco Bell soon followed with an effort that saw it pick up the tab on taco orders placed with participating Mexican food vendors through DoorDash. The companies pooled $5 million to comp taco orders on Sept. 12 to mark the occasion.

“The surest, fastest way to celebrate it was through delivery. If we wanted to reach the taqueros, if we wanted to amplify and celebrate their ability to use Taco Tuesday, the most simplified, straightforward platform to do that with was DoorDash,” Mathews said.

The collaboration was an unusual one, with Taco Bell pushing consumers toward mom-and-pop taquerias via DoorDash, and required unorthodox work behind the scenes. Taco Bell drove the effort via its customer relationship management platform, and the brands set up a war room to monitor how consumers responded to make sure local taco spots weren’t overwhelmed by the effort. Both executives are proud of what the Taco Tuesday push means for their brands.

“We believe it’s a way for the category and taco culture to continue to thrive in a burger world,” Mathews said.

Meanwhile, Amoo-Gottfried borrowed a term, #TombstoneGoals, from Taco Bell CEO Sean Tresvant to describe the partnership.

“The things that we do together have to be the types of things that can go on our tombstones,” he said.