Staff Writer
Jun 16, 2022

Aligning privacy practices and marketing strategies with a cookie-less future

In light of changing data privacy practices, marketers must learn to balance data collection and marketing strategy with consumer trust.

Aligning privacy practices and marketing strategies with a cookie-less future

The digital landscape is currently undergoing a seismic shift. For years, brands have used cookies to track website visitors, collecting data about their likes and dislikes, and learning their online behaviour in the pursuit of delivering accurate targeted ads. But as consumers become increasingly savvy about how their personal data is being used, the way that brands use cookies and tracking tools are set to change dramatically. In response to growing demands for greater transparency and user control, we are experiencing a shift towards privacy-first consumer data practices, paving the way towards a cookie-less future.

As part of the Open Internet Myth-Buster Series, The Trade Desk has partnered with Campaign Asia-Pacific to explain how the lack of an identity solution will impact advertisers, why the industry must come together to regain consumer trust, and share a practical guide to support brands on their first-party data journeys.

Challenges in preparations for going cookie-less

Marketers left with only cookie crumbs may find themselves floundering to get their messaging out to the right people while still remaining privacy-compliant. A survey conducted by The Trade Desk shows 51% of marketers are almost entirely reliant on third-party cookies, while 70% feel that these changes will cause digital advertising to move a step backwards.

When it comes to the Asia-Pacific region, Xiaofeng Wang, principal analyst at Forrester Research, says that 43% of APAC marketers reported concerns about the elimination of third-party cookies, with brands, advertisers, and media agencies mainly concerned about the quality and availability of data. Meanwhile, publishers and media owners were most worried about the inability to target and personalise content.

88% of APAC marketers claimed to recognise the importance of privacy, but Wang says it’s clear that they are still in the “very early stages of their privacy-first journey.” According to a 2021 Forrester survey, only 59% of APAC brands and advertisers fulfil the minimum requirements in complying with data privacy regulations; only 30% have a dedicated strategy on communicating data privacy to their consumers; and only 18% believe that their privacy oversight and processes are mature.

Brands themselves reported being most ready for a cookie-less future in terms of strategy (46%), and least prepared in terms of tools (15%) — customer data platforms are therefore the top tools that brands plan to invest in within the next 12 months. Interestingly, investing in consent management platforms ranked lowest in importance, though only 3% of brands considered their consent management process “very sophisticated.” When it comes to managing consumer data, there may be tools available, but it is the people, operations, and processes that need to catch up.

Solving the privacy-personalisation paradox

Notably, Forrester’s research showed that 57% of marketers in the APAC region do not believe that most consumers understand the value exchange of data; specifically, they remain unclear on the kind of data they are sharing, how it’s being shared, whether they can opt out, and how it benefits them.

Chris Ngan, General Manager HK & Taiwan of The Trade Desk

Chris Ngan, The Trade Desk’s general manager, Hong Kong and Taiwan, feels that the industry has “done a bad job [of] articulating and explaining that value exchange to customers”, which explains why they’re “reluctant to share [what is] basically a browsing history-level of data.” And it’s not hard to see why, when 70% of APAC marketers surveyed by Forrester said they do not have a dedicated communication strategy regarding data privacy.

The results of a casual poll conducted during the webinar showed that as consumers, 36.8% of participants are most willing to share their data when they need to access content, products, or websites, illustrating a clear desire for reciprocity from brands — something in return for giving out their information.

Traditionally, that value exchange came in the form of discounts or coupons. However, data collection should be deeper than just buying personal information in a one-time process; the goal should be to build a relationship and retain the consumer. As opposed to monetary offers, customers may already see fair value exchange in something as simple as a better brand experience.

When considering the value exchange, Ngan also emphasises the importance of brand value. Consumers who resonate with brand values are more likely to become loyal customers. After witnessing brands heavily prioritising performance over branding since the pandemic, Ngan urges marketers to make sure they have invested significantly in articulating their brand value to consumers as a crucial step to building trust.

Building a first-party data strategy

Consumer trust is key to cracking the code of a cookie-less future. Between personalisation and privacy, the balanced middle is the vital component of consent. To construct a privacy-centric personalised future for consumers, the primary step in dealing with the deprecation of third-party cookies is building a robust first-party data strategy.

Having seen myriad reactive tactics from brands in the wake of the EU’s General Data Protection Regulation (GDPR) that negatively affected consumer experience and trust, Ian Dejong, principal at Adobe Digital Strategy Group, APAC, suggests brands build real strategies to become GDPR-ready. By taking an identity-based approach and collecting data directly from consumers, brands will be able to measure performance more accurately, improve ad targeting, and build an engaged relationship with the consumer based on consent.

A second poll conducted during the webinar sought to understand how first-party data is being used within organisations. Over a third of participants replied that they collect enough data, but struggle with actionable insights in putting that information to work. Ngan provides a solution with a first-party data playbook developed by The Trade Desk in collaboration with Epsilon, consisting of eight comprehensive steps grouped into three phases.

Preparation phase

The preparation phase involves define business objectives, identifying use cases for first-party data that will help brands achieve those objectives, and designing the strategy based on a solid understanding of the consumer. Consider also what kind of data will be collected, and from which channels. What value exchange can brands offer, and how will that exchange be communicated?

Building phase

The second phase focuses on building a well-rounded view using the data collected. First-party data should be acquired from a combination of owned and paid channels — this can be collected at all points of the customer journey, even before the first purchase is made. Information from owned channels can help improve targeting within paid channels, which then drives traffic back to a brand’s own ecosystem.

When collecting data, Dejong emphasises that clarity, transparency, and offering consumer control is essential. “Being clear that you’re collecting the right data for the right reasons keeps you compliant and unlocks value for your customers.” It is also critical to partner with the right platforms that will allow brands to get data at a granular level from digital advertising campaigns.

Because customers hold various identifiers and devices, brands end up with first-party data collected from multiple sources. The challenge here is to build a single, persistent view of the customer. Streamlining this fragmented data into a unified customer view is vital, so brands can understand and more efficiently communicate with their customers.

Once a unified view of each individual consumer has been established, with a good idea of how customers are engaging with the brand across the ecosystem, apply data enrichment strategies, such as progressive profiling and data partnerships, to build a more robust customer profile that allows for more personalised activation.

Activation phase

The third and final phase covers activation and optimisation. Activation should be carried out only when the “who” and “how” of the campaign target is clear. In fact, brands should begin their first-party data strategies by already thinking ahead to the activation stage to avoid common pitfalls, such as acquiring lots of data but ultimately finding no utilisation purpose. In determining early on how they want to apply their data, brands can define the kind of information they actually need, then activate the same consumer along different phases of their purchase journey — as well as across different devices and channels — to create an integrated communications journey.

Dejong adds that demonstrating integrity and responsibility for first-party data also means making sure brand partners are up to par. The last thing organisations want at this stage in privacy compliance is to send their data to partners and channels that end up lowering the bar.

After activation, analyse and derive actionable data insights that can inform future campaign strategy. Leveraging insights from customer value, channel attribution, and campaign responses can help brands target future customers more accurately.

Finally, it is important to optimise by repeatedly reviewing and improving the strategy. Make the best use of first-party data with regular performance reviews. Be clear about the goals to optimise for and optimise for the entire strategy, not just a single channel.

Choosing transparency with UID2

Now that a robust first-party data strategy is well underway, it is time to also consider an equally vital part of the cookie-less solution: alternative identifiers. Ngan likens this to language; every market uses a different dialect, so a common language is needed to bridge communications for everyone to understand the same values within the same context. A unified identity solution can be the common benchmark currency to solve the issue of fragmented first-party data.

Instead of relying on old identifiers like mobile ad IDs, financial transactions, Google Ad ID — or indeed, cookies — Ngan recommends replacing them with the alternative identifier UID2.0 (commonly referred to as UID2), which collates first-party data and connects it to brands’ digital ecosystems in a way that is fully privacy-compliant. Built with consumer transparency, control, and security in mind, this solution preserves targeted advertising across the open internet, helping brands understand their consumers across the ecosystem, while introducing significant upgrades to the realms of technology, encryption, and privacy.

Consumer first-party data, such as emails and phone numbers collected from websites and apps or campaign enrolments, are hashed, salted, and encrypted to create a unique UID2 token. As this ID requires a secret key to access, abuse of data from third parties can be prevented. Brands can therefore activate this collated and secured data back into their own advertising ecosystems, better informing future strategies with data that is simultaneously safer on the consumer end and more well-rounded for the brand.

UID2 also provides a centralised portal from which customers can easily view and manage their data preferences across the open internet. With clear, universal preferences and opt-out options, consumers are afforded more transparency and control over their own data than ever before. As evidenced from the webinar discussion, consumer trust holds much significance, and Ngan sees UID2 as “a perfect opportunity for…brands to hit the reset button, reshape the communication of value exchange to consumers, and win trust.”

As a service that is open source and inter-operable, UID2 is also not proprietary nor for profit to its provider. Instead, it remains free and readily available to the entire ecosystem, with no one corporation exerting commercial interest over the product. From supply-side ad platforms and media publishers to info-tech industry leaders, much of the advertising ecosystem has already shown their support of UID2’s method of independent governance through third-party operators under a strict code of conduct — the growth of this consolidated support will enable marketers and advertisers to progressively tap into more cookie-less options.

Dejong concurs that since “a lot of the key parts of the [privacy] conversation is around the unifying of the profile and its governance,” an alternative identifier is the method through which brands can be sure to remain privacy-compliant. He highlights once again that a key takeaway is for brands and advertisers to carefully choose to work with platforms and partners with the right levels of governance. A future-proof identity solution — whether it be UID2, Ramp ID, or any others currently in development — should undoubtedly be treated as a vital part of the equation to navigating a cookie-less environment.

Ultimately, reconciling a marketer’s need for information and a consumer’s desire for security lies in improving the way brands collect, manage, and govern their data, and determining how to activate them into creating consumer value to improve content personalisation. Building data collection and governance on a foundation of trust is what will successfully propel brands into a cookie-less future.

 

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