How Privacy Will Change Digital Marketing This Year

The marketing industry finds itself facing the most significant disruption since the inception of digital: privacy changes, especially the end of third-party cookies. Google Chrome is inching closer to Deprecation Day for the third-party cookie, and though we still don’t know exactly when that is, the digital marketing industry is preparing to pivot in fundamental ways.

Synonymous with third-party cookies has been the discussion of consumer privacy and consent. Since the third-party cookie has become a means to deliver content to consumers, it’s only natural that with its deprecation comes a new way of doing business for a variety of stakeholders within the ecosystem.

The re-creation of the programmatic landscape will center on identity resolution and collaboration, and the industry will adopt several new, privacy-minded changes in the year ahead.

Consent and new identity solutions

At the core of every discussion about privacy is identity. Identity embodies the ‘who’ that third-party cookies allow marketers to target and measure at scale. Without them, marketers need something else to help solve for that — in a way that respects the new emphasis on privacy and consent for consumers.

The first main solution emerging today is authenticated traffic, where a user signs into a platform, service, or website via a verified email address. The insights collected at that point of sign-in can be used as an ID in a programmatic ecosystem. There are very few players, like Facebook and Google, with access to authenticated data at scale. As a result, the majority of identity vendors typically leverage the scale of third-party cookies to aid in targeting and measurement, and are already creating replacement identifiers based on other readily available data. These are commonly referred to as browser ID solutions because they don’t require a user to identify themselves.

There are a couple of key underlying premises in both of these methodologies: the creation of an identifier that can be used to replace the third-party cookie and the concept of user consent for the data being used to create the ID. For authenticated solutions, it’s implied that consent will be requested at sign-in, making them privacy friendly. While more complicated for browser ID solutions, the concept should stay intact. Users of these solutions, such as a company or third-party tracker, should only be able to use data elements the user hands over with consent.

Clean rooms and privacy-safe data maintenance

2020 shed light on another privacy-centric approach to data and identity for marketers: the clean room. Clean rooms are places where owners of large swaths of authenticated data can share it in an aggregated fashion. This data can then be analyzed alongside other first-party data to derive insights, all within that consent-safe space. 

The hugely successful IPO of Snowflake was a signal for advertisers that a new way of work is upon us. Now with a valuation higher than that of IBM, Snowflake offers the opportunity for organizations to create cleanrooms (among other offerings) for data sifting and even cites digital marketing as a primary use case. In a lot of cases, the co-mingling of those data assets in the clean room requires an identity solution.

This year, we can expect to see more of these data exchanges cropping up to fight for this newfound piece of the ad ecosystem pie, as well as more data vendors, ad agencies, and brands signing on to participate in them. The premise of a garden that promotes collaborative sharing of advertiser data in a scalable way, using guidelines and restrictions to maintain data security, is extremely appealing to all key stakeholders and is therefore spreading quickly. 

Identity vendors are signing up to make their solutions available to new customers. Agencies and brands are using them as a central repository for all data before it hits the programmatic ecosystem. Attribution and measurement partners are closing the campaign loop by enabling privacy safe models to be built within them.

Retail requires workflow adjustments

Perhaps the most provocative change that a privacy-focused future ecosystem could drive is a shift in the way big businesses function. Today, most of the largest retailers and consumer-facing businesses rely very heavily on their first-party data. After all, the bigger you are, the more of it you’re likely to have. The first-party cookie is only going to increase in value when it becomes the primary cookie currency on the web in 2022. So, as businesses look to the future and explore options for building additional privacy-first scale to complement their first-party data, they’ll be faced with another challenge – how to adopt new work streams to accommodate an influx of new data and data processing frameworks.

The biggest retailers and brands could look to potentially buy and bring an identity solution in house to facilitate these changes, but relying on just one could leave a large piece out of the puzzle. The number of devices and identifiers for a single individual and a household is still growing — can one identity vendor fill all those gaps? What will interoperability across these vendors look like in the future? Like walled gardens, will data get locked into these ID vendors, making the brand or retailer completely beholden to them? Companies will be making big bets this year, one way or another, on how to add even more value to their first-party data.

One thing is certain; identity and privacy are joint at the hip in the future of digital marketing. In the spirit of the collaboration of these two tenets, the industry will need to accept collaboration as its new future as well. In order to succeed in providing solutions for its customers, the ad tech ecosystem will need to work together to present the most holistic approaches. In turn, retailers will need to consider the parts that work together to form the whole when it comes to identity resolution and its power in driving return on investment.

Ajit Thupil is Chief Product Officer of Tapad.

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