The Sky Is Not Falling

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is by Scott McDonald Ph.D, President and CEO at the Advertising Research Foundation.  

For more than a year, close industry observers have endured an unending stream of angst about digital marketing disruption from Google’s deprecation of third-party cookies and Apple’s AppTrackingTransparency privacy changes. The subject dominates our news feeds and is the focus of at least two or three industry forums each week.

But consumer privacy, as it relates to tracking and retargeting against behaviors, has long faced a major reckoning. And though it may feel as if we are at a crossroads, I am here to tell you that this is not the end of the world. 

Data-driven digital advertising has never worked as well as promised. In some situations, the targeting has been extremely accurate, but more often these campaigns have performed no better than if they’d been served to a random sample. Consumers have long been annoyed by the proverbial pair of shoes that follows them around the internet for weeks after a purchase.

The data ecosystem has always been a “buyer beware” environment due to the lack of transparency or quality standards for the data on offer. Unfortunately, efforts made through the years to infuse more transparency into the process (e.g., ingredient labels or quality indices) have never been adopted at meaningful scale. 

Contextual prevails

How often have we heard about reaching “the right consumer at the right place and the right time”? For decades, before cookies were anything more than a dessert, advertisers were able to target prospects by thoughtfully placing ads in environments – both physical and media environments – where they were likely to be seen by qualified consumers. No personally identifiable information required. Minimal brand safety risks.

Now there are more contextual targeting solutions available than ever before to successfully deploy the proven tactic on a digital environment in a privacy-compliant manner.

Welcome back, MMM

True, there have been setbacks. Multi-touch attribution (MTA) and customer journey diagnostics will face new hurdles without identifiers. But rather than mark the demise for attribution, MTA’s pain will lead to more attention for its prodigal sibling, marketing mix modeling (MMM). The either/or debate between MTA and MMM has been exhausting for many advertisers, so an integration of the two is a natural and welcome development. MTA, in its current fashion, has difficulties accounting fairly for both long-term and short-term advertising impacts. A revamped MMM approach is more likely to accurately reflect both.

Recent years have already seen a diminishment of digital targeting on the open web, with cookie-blocking in Apple’s Safari and Mozilla’s Firefox browsers and consumer adoption of ad blockers. One attribution vendor recently estimated that for most clients, 50% of the data available to them in 2016 is no longer available today.

OK, what’s my point? It’s not merely that valuable older practices such as contextual targeting and MMM should be welcomed back into the fold.

That’s true, but the better news is that as we move toward requirements to secure more explicit permission to collect, use and manage a consumer’s data, the marketing ecosystem will actually improve and data-driven approaches will become more effective than they are today. Databases will gain value as marketers learn to trust that prospects have permitted use of their data because they are interested. Companies will focus on building privacy-compliant, first-party databases by offering consumers something of real value for their information. (Most customers will share their email address or date of birth in exchange for a discount or free sample. Make them an offer.)

The trade press has been filled with visions of the post-cookie apocalypse, but I’m having none of it.  Especially after what we’ve collectively been through this past year, marketers have reason to be optimistic. Yes, there are more disruptions ahead, but the sky is not falling. Many data strategies that have been used during the past decade will no longer work. You will have to ask consumers’ permission for their data, and not all will go along. Many consumers will expect to barter for that permission. Brands with direct relationships with customers will fare better.

But we all will survive. Even targeting will survive so long as it does not abuse privacy.

As contextual targeting has demonstrated for decades, all of this is not only possible, but smart.

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