Privacy Marketing & Advertising Trends

Privacy rights have taken center stage, which has far-reaching implications for how marketers, retailers, and publishers target consumers. Apple’s new App Tracking Transparency feature and Google’s decision to remove cookies from its Chrome browser have escalated the need to create a transparent value exchange with customers that’s built on consent. Below, Catalina answers seven trending questions about how to balance privacy rights and personalization:

What’s a first-party cookie vs. a third-party cookie?

Cookies are tiny digital IDs that remember what consumers do across digital platforms and help marketers create personalized ads and relevant offers to them.

First-party cookies help publishers measure advertising performance. It includes information gathered from a company’s website, app, CRM, social media or surveys. Only the publisher can access the information. (Second-party data is first-party data from a trusted source.)

Third-party cookies are created and placed by someone other than a first-party publisher, such as an advertiser or social media site. They are used by help to define a target audience for advertising.

There’s been a lot of discussion around the “death” of the third-party cookie. What does this mean for marketers?

Third-party cookies have been around since 1994 but became a hot topic when Google announced it plans to stop using them on its Chrome browser by 2023. (Safari and Firefox, the second and third most popular web browsers, already block them.)

Google’s killing of third-party cookies is designed to improve consumer privacy – and position its proposed group profiling system as the best alternative. Their death will limit a marketer’s ability to target individual consumers most likely to be interested in buying what they offer. Advertisers, publishers, and retailers are responding by improving their first-party data sources.

What is GDPR and what is GDPR compliance?

The EU General Data Protection Regulation (GDPR) is the legal framework and guidelines for the collection and processing of personal identifiable information (PII) in Europe. It went into effect in May 2018.

Global marketers must comply with GDPR rules when engaging European consumers, and so far about half of the world’s organizations have updated their website cookie policies and 80% have updated their privacy policies.

What is CCPA and what does it mean for marketers?

The California Consumer Privacy Act (CCPA) is a state-wide privacy law that regulates how business handle the personal information of California residents. The Association of National Advertisers (ANA) predicts half of states in US will introduce a version of CCPA by yearend 2021, which is likely to result in a complex and conflicting set of privacy rule laws.

Creating a US equivalent of GDPR is unlikely to happen soon as Congress focuses on other priorities. Presently, the US Data Care Act, introduced in March 2021 to create national governance, has a 2% chance of being enacted.

What is Apple’s new App Tracking Transparency feature, and what does it mean for advertisers?

In Spring 2021, Apple launched an App Tracking Transparency feature on the new iPhone iOS 14.5 platforms. It gives users much more transparency and control over any app that wants to track them for advertising.

Consumers can now easily opt out of sharing personal information with any or all advertisers, which has marketers, retailers and media companies rethinking how they can continue to deliver targeted messages to shoppers. Opt-in estimates range from 4% to 33% for iOS users.

Apple has announced its iOS 15 release the Fall will premiere a new privacy solution that can mask IP addresses, preventing companies from acquiring a user’s location without consent. Called Private Relay, it also lets consumers log into websites with anonymized email addresses, which is an added barrier to data providers who have been looking to email as a replacement for the third-party cookie.

An Android version of App Tracking Transparency is expected to launch with apps running on Android 12 towards by yearend 2021. According to Statcounter, 72.8% of smartphones worldwide use an Android operating system and 26.4% use iOS.

Is a combination of transparent first-party data and contextual advertising the right solution for CPG marketers moving forward?

The privacy landscape is evolving quickly, so it’s best for marketers not to put all their resources behind one solution.

Transparent first-party data will likely always be the best way to create personalized advertising to an individual consumer. This includes your own data and first-party data from trusted partners that get consent from users about it’s applied. (This is also called second-party data.)

Marketers can expand reach by using contextual advertising, which places ads based on the content of a web page. For example, low calorie products often appear adjacent to weight loss-related content.

Look for the industry to move toward solutions that embrace media and measurement approaches that are not solely dependent on Personal Identifiable Information (PII). Instead, marketers will use a combination of first-party cookies and contextual advertising that’d driven by reliable and ethically sourced data.

What impact do these changes have on measuring sales conversion?

Measurement is foundationally built on first-party data that creates a measurement “seed” – often in the form of a cookie – to understand who has been exposed to an ad.

To measure how exposure converts to conversion, Catalina uses an exposed/unexposed methodology to determine sales lift. This ensures that the unexposed group mirrors the exposed group precisely to isolate the impact of the advertising

To learn more about how to measure your media effectiveness and optimize your return on ad spend (ROAS) with real-time analysis, visit Catalina’s Measurement Solutions page or reach out to results@catalina.com.

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