Privacy-first era requires a more strategic marketing approach

Richard Wheaton, Managing Director at data consultancy fifty-five, outlines why in today’s privacy-first era, marketing success hinges on a more strategic approach.

For years digital marketers have relied on the dropping of cookies onto internet users’ computers to help them target customers with offers and measure effectiveness.

However, the role of the cookie is now crumbling due to legislation to limit the use of third-party data collection, and the big tech platforms are adjusting their tools to a more anonymised world on the internet. The data landscape is now fundamentally different from what has come before.

To navigate this unfamiliar terrain, a new more strategic approach is required.

These changes have followed a raft of Government legislation in various territories toward increasing user level anonymisation. Apple led the tech industry by imposing limitations on the use of third-party tracking on its devices, driven by a strict interpretation of the legal requirements and by the company's perception that its customers want protection from tracking by publishers and brands.

These changes also had a dramatically negative impact on Facebook’s share price – with its heavy reliance on access to data via Apple’s IOS.

In 2019, Google followed Apple’s moves toward restricting access to data with its landmark announcement that it was moving to a ‘privacy-first web’. This was a game changing moment for the digital marketing industry because Google’s data measures and optimizes a large percentage of the world’s digital media investment.

And although Google has given a stay of execution for the end of the third-party cookie to 2023, it is clear that a new strategy is now urgently required. The direction of travel had been clear for some time. The only direction for third party cookies is toward the exit door.

Failing to plan for the cookieless future

Fifty-five recently commissioned a YouGov study of UK businesses, and the results highlight the lack of compliance in the adoption of data collection best practices in order to comply with the legal requirements. It also highlights the requirement for new strategies for companies to build meaningful online relationships with consumers.

This survey, in which YouGov interviewed marketing personnel across more than 500 UK businesses of various sizes from small to large enterprises, revealed that less than a quarter (24%) were currently developing alternative plans for targeting potential customers when third-party cookies are phased out.

With this date likely to be by early 2023, this is a concerning development and indicates something of an ostrich strategy for those tasked with making these key decisions.

Failure to prepare apparent across business sectors

This failure to prepare was apparent across business sectors. IT and telecoms were the sectors that were the best placed with 38% either prepared or in the process of preparing, followed by media and marketing (31%). Even though retailers have some of the most regular digital communication with customers, the sector was one of the least prepared.

Only 19% stated their company had a fully formed strategy or were in the process of developing one. This is despite marketers in the retail sector reporting the most ardent support from their CEO and senior leadership for digital.

The research also showed a significant gap between the intentions and the actions of businesses. Worryingly, 75% of respondents claimed to be aware of UK laws for privacy and compliance with the data laws, and yet when asked whether their customers are able to opt in or out of communications using a consent management tool (CMP), only 45% of companies surveyed gave a positive response. UK law now requires all websites to provide customers with these options.

Lack of skills inhouse biggest concern

The survey also revealed senior marketers’ biggest concerns in developing their digital marketing strategies in the future. The number one concern was the team not having the skills in-house to develop and implement a robust digital strategy (17%), followed by worries about the team's skills being up to date and relevant for the data and AI-driven future (15%). This was tied with concerns about not being able to accurately measure marketing website activity (15%).

Other foreseen issues included not being able to accurately target customers in the future (14%), being hampered by legacy systems (12%) and facing a fine from the ICO (12%).

As the research highlights, it is clear that the majority of senior marketers are unprepared for the new privacy-first internet and the restraints on targeting customers based on previous browsing behaviour. The new rules around digital marketing and consent are complex, varied and changing. It is therefore perhaps no wonder that there is confusion in terms of best practice for targeting customers, now and in the future.

However, complexity is not a reason for inaction with the damage that failure to prepare could have to the bottom line and a company’s reputation. It is imperative that businesses have a plan in place today for how they can target customers tomorrow.

A new world, a new approach

The new world requires a more strategic approach that utilises a variety of consent-driven tactics and first party data rules, with new types of measurement protocols. The good news is that many businesses already have the tools and customer goodwill to enact a more compliant approach, and they can benefit from this to create alternative means for driving sales and understanding their audiences.

Fortunately, even in an era of increased anonymisation, it is still possible to understand the effectiveness of your marketing activity and make informed optimisation and budgeting decisions. The new approach that businesses will need to adopt should be one based on a modelled approach to help account for the missing signals that cookies used to provide. This is something many of the tech platforms are introducing.

It remains a challenge for companies to integrate performance insights into a truly comprehensive, cross-channel view because these reports require the learnings from various platforms to be combined to create a bespoke attribution solution. The big tech vendors limit the sharing of their data with that of other platforms.

However, Google’s delay in fully eliminating the use of third party cookies from their toolset gives brands is a window of opportunity to really test their performance models against real world data.

Our research is certainly a wake up call for businesses to take action.  It is vital to work with the right experts to unlock this data, particularly given the concerns of senior marketers relating to the skills of their inhouse teams. There is time to do this and develop a new strategy for a new data landscape. But the work needs to begin today.