In recent years, there has been growing concern and apprehension regarding the collection, utilization, and sharing of personal data online. However, concurrently, individuals have also expressed a preference for receiving tailored content and advertising experiences.
So, it's time to seriously examine your advertising privacy policies and truly understand to what extent you still rely on traditional technologies like third-party cookies. Companies that can provide advertising relevance for customers while prioritizing privacy experience can stand out in the market, while those who overlook this may risk losing customers: as many as 93% of Americans indicate a preference for companies that prioritize data privacy.
Beyond the changes in existing platforms like Safari and other browsers, and the implementation of the App Tracking Transparency (ATT) policy in iOS, Chrome plans to gradually phase out third-party cookies starting in the second half of 2024. The Privacy Sandbox web version's relevance and effectiveness measurement API is now fully available, with Chrome having default restrictions on third-party cookies for 1% of users globally as of January this year.
Although every major industry shift may seem daunting, it's not unprecedented. Think back to the transition to the mobile era. Initially, many marketers ignored the trend, resisting change partly because the tools used in the desktop era weren't applicable to the mobile era. But eventually, marketers recognized the shift in user behavior and adapted, ushering in an unprecedented era of growth and innovation.
The next few months will be crucial—getting actively prepared for the upcoming changes should start now.
Reshaping Mindsets
Today's digital advertising era demands new marketing strategies. Marketers need to shift from "precision" to "prediction".
While fundamental marketing objectives such as increasing awareness, enhancing purchase intent, and driving sales growth remain unchanged, the way to achieve these goals is evolving. Google is building a range of new technologies to deliver advertising effectiveness without compromising privacy. First-party data, AI, and privacy-enhancing technologies are at the core of Google's approach.
Expectations in the industry have shifted on how to reach and re-engage audiences, and how to measure the effectiveness of advertising campaigns, and this change is quickly reaching a critical juncture.
Remarketing is a prime example. It has arguably been one of the catalysts for concerns about online privacy, as it's perceived as tracking users' behavior on the web. So, in an environment without third-party cookies, pure remarketing efforts might struggle to achieve the scale and effectiveness they currently have without additional technologies like AI.
Developing a Sustainable Strategy around Three Key Elements
In recent years, Google has consistently advocated for the importance of adopting privacy-focused, sustainable strategies and solutions, and now is the critical moment to move forward. Here are three specific recommendations:
Strengthen First-Party Data Strategy: With consumers frequently switching between devices, reaching target audiences becomes more challenging, making it more important than ever to develop and strengthen first-party strategies. Consumer giant PepsiCo, by offering value to users and gaining their trust in the use of personal data, and committing to building long-term relationships, successfully grew its first-party data by 50%.
Embrace AI-Empowered Solutions: AI-driven tools can make predictions with fewer data requirements and fill in gaps in information, helping optimize advertising campaigns to achieve goals. Singapore-based airline Scoot utilized AI to analyze passenger intent and preferences, uncovering new search queries not covered by existing keywords, resulting in at least a 30% increase in total conversions.
Test and Implement Privacy-Enhancing Technologies (PETs): Marketers should start testing and mastering PETs, such as tagging. Like other advertising technology providers in the industry, Google Ads is also testing the Privacy Sandbox's relevance and effectiveness measurement API, yielding promising results in April's Interest-Based Advertising (IBA) test. These results should not be seen as a definitive indicator of IBA performance after the phasing out of third-party cookies. Google also compared the effectiveness of third-party cookies with a series of broader signals replacing them because Google believes the Privacy Sandbox is a signal, not a standalone solution.
Take Action Now
Marketers who still believe the end of third-party cookies is far off are lagging behind the times. Those who have begun embracing new thinking and using privacy-protecting technologies have already seen some initial success. Prioritizing privacy can benefit business growth. These successful experiences have proven to the industry that starting now to find the best methods through testing and learning and making adjustments is crucial.
The industry landscape has shifted. Third-party identifiers are rapidly fading. It's time to embrace this change and move forward together into an era of innovation and growth.
