5 minute read

Widely-Used Marketing Tech Is Under Attack: What’s Your Backup Plan?

Consumer skepticism around personal data continues to rise—the overwhelming majority are concerned about their data privacy (86%) and believe companies know too much about them (79%). In response to tackling transparency, control, and privacy concerns, two major events in early 2020 have marketers, vendors, and the teams that serve them scrambling to re-evaluate their tactics and long-term strategies around third party data.

First, Google announced on January 14 that it plans to phase out third party cookies in its Chrome browser over the next two years. This means the last major browser supplier is joining Apple and other privacy-focused browsers in preventing abuse of this particular technology to cross the “creepy” line in marketing messaging.

Second, CCPA went into effect on January 1 with all the compliance overhead that entails—but one lesser-known point in the regulations updated on February 10 seems to double down on not allowing any data qualifying as personal information to be pooled and shared by vendors across their customer base. (See 999.314 subsection (c) on p. 17 of the regulations.)

Both third party cookies and pooled graphs of third party personal information play key roles in the tools and tactics many marketers take for granted. Here’s how you can expect to be impacted in the coming months/year and how to create a plan that keeps your goals (and customers) top of mind:

The Decline of Third Party Data: What’s the Impact?

Without third party cookies or third party pooled identity graphs, many commonly-used methods for identity resolution for personalization, targeted digital ad buying, view-through attribution, and more will be severely diminished or even unusable.

Identity Resolution

Many identity resolution solutions rely on matching personal or device identifiers with a common ID across all of their customers and then using that entire graph to match the identity of a household or consumer profile of a person on each customer touchpoint.

With third party cookies phasing out, other techniques will have to be used instead—either based off of first and second party data subject to tighter privacy controls, or further crossing the “creepy” line with device fingerprinting techniques based off of specific data points not meant to be used for identification and relying on app-based mobile ad IDs (MAIDs) to maintain the same level of effectiveness.

Also, if CCPA applies to your business, the regulations seem to explicitly state that this technique is not allowed. Until new legislation overrides CCPA or this is tested in court, leveraging solutions that do this present a potentially big risk.

Personalization

Many personalization and Customer Data Platform (CDP) solutions rely on third party cookies and third party pooled identity graphs to identify profiles to incorporate historical behavior and behavior across devices, which are then used to personalize content on the web, in emails, in display ads, and other channels. Simply put—without these techniques, the reach of your most impactful campaigns could crater.

DMPs and DSPs

Most Data Management Platform (DMP) solutions focused on acquisition and Demand Side Platform (DSP) solutions focused on optimizing ad bidding rely heavily on third party cookies and sources of data.

These are perhaps the most directly threatened in terms of effectiveness with Google’s latest change. They often pull in other first party data to supplement and improve along with MAIDs, but can be especially impacted due to their identity resolution techniques. Return on ad spend (ROAS) could become much harder to predict and control.

Attribution

Many common methods of “View Through Attribution” that help determine the effectiveness of digital advertising and marketing campaigns rely on third party cookies to resolve to the right profile of all ad impressions on the web. This could reduce or remove key visibility needed to advertise effectively.

What to Do About It: Building a Backup Plan

If your tools use these methods across retention, acquisition, or both, you will need to get an understanding of how heavily they are used to drive the results you’re measured against as a marketer and start testing your backup plans asap.

Personalization

Reach out to your current vendors and internal teams to understand whether they’re relying on third party cookies or pooled third party data from other businesses outside of your agreement (tip: SmarterHQ doesn’t). If they are, know that while everyone is scrambling with their backup plans, you need one of your own.

Don’t count on alternative identification techniques like device fingerprinting. Those techniques are also in the crosshairs of the big tech platforms—and being the mouse in a cat and mouse game is not typically wise.

If you’re not already, consider working with a vendor like SmarterHQ that is best in class at using first party data for personalization in a privacy regulation-friendly way. Massive reach increases can be found with the right technology and expertise that is competitive and sometimes better than third party data solutions without the risk of it drying up. This is true even when your customers are using multiple devices across multiple channels.

Acquisition

If you focus on acquisition, look into how your DMP identifies segments, what data your DSP uses to make bids, and how any attribution is calculated. If they’re using these techniques, you likely need to adjust how you’re buying digital ads and how you’re attributing ROAS.

You may have to experiment with putting even more resources into the “walled gardens” of Facebook, Google, and Amazon to see where your ad dollars can be effective while the publisher-focused market comes up with new solutions that are as effective for your ad dollar.

Alternatively, it may make sense to redirect more budget and brainpower into increasing the effectiveness of your brand marketing to get more customers coming directly to you.

Strategy

While testing tactics is critical, make sure you stay informed about how the landscape for marketing and digital advertising is shifting. Making sure your retention strategy is airtight is always a good investment. Any strategy going forward has to contend with the new privacy regulations that continue to upend the space—stay familiar with CCPA updates here.

It nearly always costs way more to get new customers and pay to bring them back than it does to retain your existing customers with highly relevant experiences, great products, and great service. Make sure you’re doing your part and that you’re not blindsided when the numbers you’re held to start dropping.