In the last few weeks, many businesses will be feeling unsettled about the ad industry news around cookies. The main story being that the latest iOS release now enables users to opt-out and block third-party cookies from collecting data via mobile apps such as Facebook which, in turn, has an impact on digital ad profiling and targeting. In fact, initial surveys suggest that up to 80% of users will say no to allowing app tracking cookies.
With these significant restrictions being rolled out to the masses, it is the perfect time for brands to rethink their digital advertising strategy. At Good Rebels, we have put together the key points brands should take into account in order to navigate the significant industry changes that are happening right now and be prepared for a cookieless world.
C is for cookie
Cookies are small snippets of code that get added to your device when visiting a website and they remember various interactions from things like browsing history to login details and are used for advertising processes like behavioral profiling and ad retargeting. There are mainly 2 types (first and third party cookies):
- First-party cookies are created by the website that a user is visiting. They are often used for things like keeping users logged in and remember things like shopping cart info. They only send data back to the owners of the website you’re visiting (these will remain unaffected by the industry changes)
- Third-party cookies identify users across different websites, otherwise known as cross-site tracking and are often used in programmatic advertising, where data gets shared with multiple websites other than the one you’re visiting. All of this data goes into building user profiles via interests and purchase behaviour enabling advertisers to target you with ads across multiple sites. This is where the restrictions come into effect.
For some time now there has been an ever growing concern over how personal data is used, shared, and collected online. As a result new privacy laws have come into place such as GDPR (2018) which provided a set of legal guidelines for the collection and processing of personal data.
More recently, this change is now coming from technology platforms, where internet browsers and mobile operating systems are making significant changes as to how they manage and process third-party cookies. For instance, web browsers are already blocking these cookies by default (Firefox in 2019, Safari in 2020 and Google Chrome plans to do this in 2022).
Furthermore, the latest release of iOS 14.5 blocks cross-app tracking, meaning all apps must adhere to a new tracking framework and request a user’s permission to track them and to access their device’s advertising identifier. As a result, if users opt-out (it’s expected most will) then app data cannot be shared with another company for the purpose of ad tracking under Apple’s new policy.
This means that some of the methods (see examples below) that brands have relied on to reach audiences and assess their value have and will become much harder to do:
The limitations on these data changes have an impact on how businesses create things like audience lists and how they personalise ads, along with frequency capping and being able to report and measure campaigns due to attribution windows getting shorter.
Adjusting your advertising strategy
So with all of these changes in mind, it’s important to consider what steps and actions your business can take in order to still drive growth with your online media.
1. Start building direct customer relationships
Developing a stronger relationship with customers in a post cookie and privacy-first world is going to be vital for brands. Strengthening their direct-to-consumer channels will be key to establish and rely on first-party data from owned websites and CRM’s, and, eventually, to help them grow a successful business. It’s worth stressing loyalty and value here, because if you are asking for a customer to share their data with your business then you need to genuinely offer something useful in return when they visit your website or app.
One of the main considerations for a lot of brands should be to invest in a loyalty program where customers are invited and are rewarded with discounts, deals, credits or this could also be rewarded with exclusive content or products when sharing their email or phone number with your website/app.
Over time, as more customers engage more regularly, the businesses that have established these relationships will gain deeper insights into their customers and can ultimately serve them better and more personalised offerings.
2. Invest and improve analytics capability
In order to avoid looking at your first-party data in silo, consider investing in a cross-platform analytics tool which can help you analyse your most important data in one place.
Analytics solutions like Google 360 will help you to examine all of the first-party data you’ve collected and provide you the ability to combine it with their ad platform audience tools and data. These audience tools for instance can help you to continue to prospect to find new audiences that have similar traits to your first-party data. Things like context targeting can also help target campaigns when you’re unable to identify audience preferences due to the lack of third-party data.
From the first-party data that you get back from consumers this will enable you to analyse things like purchasing patterns and seasonality to help you identify the right moments to promote the right products and content.
3. Unify data into CRM to better understand customers
Investing in a CRM system will help to combine all your ads, analytics and first-party customer data into one place. Furthermore, by using a cloud based platform this also helps to encrypt data to make data storage secure.
Businesses that are more digitally mature are bringing their first-party data together into a cloud solution as this helps to make more informed business decisions, thanks to faster data access and the ability to automate customer analysis via machine learning. This in turn can help unlock deeper insights, such as purchase predictions and customer lifetime value.
By implementing things like sitewide analytics tags you can make sure you’re constantly feeding algorithms with enough relevant data to help inform measurement around signals like device type, date, time, conversion type etc.
How to adapt your performance measurement
As mentioned earlier these cookie restrictions are going to have an impact on how you can measure and attribute success to your campaign activities. Therefore, here are some solutions that brands can apply to help adjust their performance measurement.
- Actions for Facebook and Instagram advertisers
As a result of the latest iOS update it’s important to update Facebook tracking pixels and adjust your conversion set up. For conversions via your website this involves verifying your domain via DNS/HTML file with Facebook business manager and then configuring the custom events you wish to use on your domain and optimise your ad campaigns for.
If you’re also running app campaigns then you should also update your app to the latest version of the Facebook SDK for iOS and configure your events via the events manager.
Marketers have often tried to tie multi-channel marketing measurement to individual customer journeys and despite admitting that this is flawed they’ve carried on using this as an ongoing approach. However, with consumer data privacy policies continuing to lower the accuracy of measurement results, marketers need to look for alternative solutions – for instance, incrementality.
The main question we really want to answer in marketing is whether what we’re doing is making an impact. Incrementality is an approach that enables businesses to understand how much of their campaign results were caused by their advertising activity, and how much would have happened if their advertising never ran.
This is a different approach to multi-touch attribution which attributes impact across all marketing touchpoints – the biggest problem with MTA is that it fails to assess whether an activity potentially had no influence whatsoever on a conversion.
Consider incrementality as controlled media experiments where target users are divided within a particular channel into two groups. Ads are shown to one group and withheld from the other. This way we can compare activity to determine whether an advertising tactic actually changed consumer behavior.
This method looks at advertising activity as a whole in order to understand whether there is a causal relationship and how strong that is. Thanks to innovations in AI and machine learning, it has made incrementality measurement easier and faster to achieve. Several media management platforms have now implemented their own algorithms to help apply this methodology and enable you to assess whether your business is X% bigger (or not) because of the tactic(s) tested.
- Brand lift
The effectiveness of an ad campaign can also be evaluated by how it affects brand metrics. Brand Lift is a measurement of the direct impact that your ads are having on perceptions and behaviors throughout the consumer journey. This approach provides insights into how your ads are impacting interest, recall, consideration and purchase intent. In order to assess this, ads are shown to one group and withheld from the other. Brand Lift can also help measure the impact your campaign has on organic search demand and growth.
Consider the quality of the attention your ads are receiving and in turn place higher value on your content which causes audiences to spend more time on a platform instead of passive reach.
- Media mix modelling
Lastly, your business’s media mix is hugely important for delivering ROI when running advertising campaigns. By having a diverse mix of media means that you aren’t putting all your marketing or advertising budget in one basket. Therefore, if one channel is ineffective at driving results, the other routes in your mix can help balance out the total ROI. Ultimately, this allows you to test new tactics while having a safety net in place of some channels that you know deliver effectiveness.
This process should be under constant evaluation via your analytics and CRM data applying machine learning–based algorithms to make sure more budget is allocated to the best-performing media, or to reallocate the lowest-performing media budget to a different media altogether.
What does the future hold?
We all know Google dominates web browsing and digital ads and as a result they have certainly relied on third-party cookies for certain areas of their ad business. However, we definitely shouldn’t forget that they own huge amounts of first-party data via their suite of services (Gmail, Maps, YouTube, Android, Google Home etc.) and it’s worth noting none of this first-party data will be affected by these recent cookie changes and so has the potential to become even more valuable as other third-party sources of ad targeting data disappear.
Whilst it will take lots more discussions and testing to agree on an industry replacement, Google has been leading the push to replace cookies with a new technology to help target ads on the web called FLoC (Federated Learning of Cohorts). A simpler explanation is that this new technology will enable interest-based advertising without letting advertisers know your identity, by using web browsing habits that group people via common interests. This means when you visit a website, Chrome will tell that site the visitor belongs to a particular ‘interest group’.
That said, Chrome itself doesn’t plan to assign interest group labels to FloCs, that’s for the ad tech industry to figure out – which does still leave an unsettled vision as to what the exact future holds. However, with Google Chrome cookie deadline coming up in early 2022 and with many advertisers looking for new ways to replace the scale of their audience prospecting to drive growth, it means we should be expecting much more developments this year. Which we’ll of course be keeping you updated on!