Reimagining the Customer Connection: Life After IDFA and Third-Party Cookies

Tech companies are giving consumers more control over their personal information. Proactive advertisers will adapt—with innovations that meet this new reality.

The ability to track consumer habits online has been an integral piece of digital marketing as we know it. But as consumers demand more transparency on how their personal data is being shared and used, regional governments and big tech are changing their approach to customer information. Privacy regulations are on the rise and, at the same time, companies like Apple and Google are making moves to give consumers more control of their data.

As device owners may have already seen, iOS apps will now require that users consent to identifier for advertisers (IDFA) tracking with a new App Tracking Transparency feature. Additionally, Google recently announced that it will begin phasing out third-party cookies in Chrome by 2022.

It is hard to pinpoint exactly what these changes will mean long term, but one thing is for certain: they are going to disrupt digital marketing.

What does this mean for advertisers?
Consumers are looking for privacy regulations that can help put the control back in their hands. As a result, advertisers are losing capabilities that have become commonplace in the industry: these recent changes mark diminished ROI on campaigns, and reduced measurability and targetability for marketing programs. At the end of the day, it is impossible to effectively communicate with customers you cannot identify by their interests or behaviours.

This calls for creativity on the part of today’s brands and marketers. Advertisers need to rethink how they can continue targeting consumers—and engaging with them meaningfully—without infringing on their privacy or becoming obtrusive.

Adapting to a world without third-party data, marketing is characterized by innovation.

The advertisers who successfully navigate the changing regulatory landscape will be the ones who plot a new course early on...

Evaluating the impact of new privacy regulations
To come out ahead, it will be vital for advertisers to review their current marketing efforts and identify the areas that will be most affected by IDFA and the loss of third-party cookies. Understanding the data transacted on today—and whether their business is heavily dependent on third-party inputs—is a good starting point.

Marketers will have to deliver tailored media without the insights provided by cookies. This will mean exploring opportunities within their own first-party data, through owned channels like email, brand apps, existing loyalty programs, or social media interactions.

It will also be critical for advertisers to look for opportunities within their own channels to boost targeting and personalization. One avenue could be requesting additional data points from customers, such as a phone number on an app registration page or location data during email sign-up.

Assessing the available data
Collecting first-party data is crucial—and connecting the dots to turn them into valuable insights takes technology. While many advertising teams will already have a solution, some will need to invest in first-party data analytics that focus on areas of activation like audience definition, lifecycle management, personalization, and cross-channel lead management. Whether advertisers bring the analysis in-house or partner with another company that is collecting their own first-party data, it is the resulting insights that will drive decision making.

Identifying alternative opportunities for targeting and measuring
When it comes to personalized targeting, advertisers can take this time to research options. Though Apple and Google are in the spotlight for ending individual tracking, both are considering solutions that share some data with advertisers. At the same time, other companies are emerging to offer decentralized data strategies that encrypt first-party data and then purposely obscure it to protect customers while helping advertisers target.

Beyond data, marketers should think about pivoting their efforts from data to context: for example, someone already browsing a retail site is likely predisposed to consider or to buy products, and advertisers can message accordingly. To maximize the value of any new approach, it is important to test, track progress, and determine new ways to optimize.

Restrictions to the existing model should not, however, push advertisers back to older strategies. Just because you do not have electricity does not mean you have to go back to building a fire—success will come to those that see this as a chance to adapt and evolve more strategically.

Resetting the strategy
The customer journey includes many touchpoints before a transaction is made—from social media to a brand app and website to in-store—which spells opportunity for advertisers to create a deeper connection.

In the absence of data generated through IDFA and third-party cookies, there is now an opportunity for other platforms - such as publications or social media sites - to adopt more of the media share. As the tides shift, the last-mile retail media space is one of the most effective remaining tactics for advertisers looking to reach consumers while garnering actionable audience insights. Whether placing ads in the departments most relevant to their customers or purchasing product landing pages with top retailers, marketers can use the omnichannel appeal of traditional retail to ensure their messages land.

Flourishing in the new data reality
As user privacy continues to be a hot-button issue, advertisers who pivot their marketing efforts now will be better for it. What used to be a vast open playing field has been segmented, and brands need to find the sections that make the most sense for their goals. Advertisers can take the time now to assess their data usage, set a new strategy, and chart a course forward with partners who will help them reach their messaging goals. The landscape may be evolving rapidly, but there are always ways to stay ahead of the curve.

At Walmart Connect Canada, we are always thinking about what is next in the digital marketing space. Get in touch to continue the conversation.

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