In today’s privacy-focused era, customers’ increasing concerns and the impending demise of third-party cookies are sending shockwaves through the advertising industry across the UK and EMEA region. And advertisers are confronted with a transformative challenge, requiring them to abandon outdated tools and embrace innovative approaches.
Whilst research demonstrates that 77 per cent of leaders and almost as many (75%) publishers say they’re ready for a world without cookies and identifiers, actions on the ground reveal a different story. Advertisers are seemingly undeterred by the dwindling effectiveness of traditional methods and continue to rely on outdated data management platforms (DMPs). It’s a costly misstep, inadvertently diminishing their ability to meet the evolving privacy expectations of their target audiences.
Breaking free from the shackles of DMPs
DMPs were once the “go-to” solution in the digital world. Since before the General Data Protection Regulation (GDPR) came into action in 2018, people have been predicting their downfall. Rightly so, their heavy reliance on third-party identifiers and digital signals has rendered them ineffective and unreliable. The market has already taken a hit with a 50 to 60 per cent drop in signal fidelity from third-party identifiers thanks to moves by other players like Apple (iOS & Safari) and Firefox.
Basically, if a company or brand is still clinging to its DMP, it’s already behind. Major brands have begun sunsetting their DMPs, and even industry-leading DMP vendors such as Adobe, Salesforce and Oracle have started phasing out their DMP offerings as a result of these industry changes.
Navigating a post-DMP landscape
Putting DMPs to bed is more than a trend; it’s a necessary response to the region’s evolving data and consent-first landscape. It’s time to embrace new strategies that one, save time and resources and two, prioritise data privacy and compliance with new regulations. In doing so, companies can position themselves for long-term success in the evolving privacy-first era.
1. Establish a Robust First-Party Data Foundation: Brands that continue to depend on third-party vendors for activation will find it difficult to navigate the post-cookie world. Cultivating direct customer relationships – that is, capturing consented first-party data – is the only way forward.
Building a first-party data foundation allows brands to gather valuable information, including customers’ behaviour, actions and interests directly from their website visitors with their permission. This data collection involves obtaining personally identifiable information (PII) like a person’s name or email address and durable identifiers like device IDs, which enable consistent user recognition across platforms and devices. This allows brands to convert anonymous browsers into “known customers”. Quite simply, first-party data helps marketers tailor their content, services and products to meet their customers’ needs more precisely.
Even more, there’s a level of control and compliance that comes with focusing on first-party data. In a landscape that’s increasingly aware of and sensitive to data privacy concerns, first-party data is gathered with direct consent from customers. So companies not only satisfy regulatory requirements but also foster a higher level of trust with their consumers.
2. Try Out Alternative Data Management Solutions: The below data management solutions are custom-fit for the changing landscape. They focus on using customer data to enhance marketing efforts, improve segmentation and personalisation whilst ensuring compliance with privacy regulations and providing valuable analytics and actionable insights. These solutions empower companies to better understand their customers, optimise their marketing strategies and ultimately, drive business growth in a privacy-conscious and compliant manner.
Below are a few potential solutions advertisers can leverage today:
- Customer data platforms (CDPs): CDPs integrate various online and offline data, whether it’s from a loyalty program, point-of-sale (POS) system or email tool, and consolidate customer data to help brands gain valuable insights in the post-DMP era. However, it’s important to understand that not all CDPs are created equal.
With Amperity, real advertising identity interoperability is baked in, allowing brands to access a complete view of the customer base, giving them a better overall picture of their customers. Advertisers can then target audiences across channels and campaigns and improve personalisation capabilities for websites and campaigns. As a result, companies enjoy improved returns on investments (ROI).
- Data clean rooms (DCRs): DCRs are controlled environments that allow companies to match their first-party data with anonymised data from another company or platforms like Google and Facebook. Since DCRs allow companies to view only aggregated data, they provide a privacy-conscious way to find and use customer data for targeted advertising and analytics.
- Manage the economics of first-party activation models: Managing the economics of first-party activation models is crucial for businesses, especially considering the potential expenses associated with legacy approaches that charge per action on first-party data. To make the most of your budget, it’s vital to accurately measure Customer Lifetime Value (CLV) and set appropriate thresholds for acquiring and retargeting high-value customers.
Many brands underestimate CLV because their customer data is incorrect, which hinders their ability to spend effectively on acquiring valuable customers. To overcome this, focus on collecting accurate customer data and obtaining proper consent. By ensuring the accuracy of customer information, brands can make better decisions and allocate resources more efficiently.
With a strong foundation in accurate first-party data and consent-driven practices, you can optimise your strategies for acquiring and retaining valuable customers. This leads to better results like a 15.2 per cent improvement in CLV prediction accuracy and 13.4 per cent improvement on churn prediction accuracy.
3. Understand Primary Activation Channels: Most companies leverage social media platforms like Facebook, Instagram and TikTok or search engine advertising through Google or even direct email marketing campaigns for advertising to customers. By understanding the channels commonly used by the companies, marketers will know the type of datasets preferred by these platforms. This allows them to optimise the data collected, managed and used. Understanding these channels will also help them find out where their customers are most active, enabling more effective targeting.
4. Explore Cookieless Media Buying: Whilst cookies remain deeply entrenched in media buying practices, the industry is gradually venturing into alternative approaches to enhance audience reach in a manner that is both effective and privacy-conscious. These include:
- Contextual targeting: Contextual targeting targets ads based on the context of the website or content – instead of relying on individual identities. This way, advertisers can deliver relevant ads to consumers without relying on cookies for personalisation.
- Identity-free or cookie-free audience targeting: This is an emerging solution to enable audience targeting that doesn’t rely on cookies or individual identifiers. These solutions aim to provide effective audience segmentation and targeting whilst respecting user privacy.
- Walled gardens: Walled gardens like Meta and TikTok have their own robust data sources. Brands can leverage the data within these closed ecosystems to target and engage with their audiences effectively.
- Retail Media Networks: These advertising platforms are owned and operated by retailers. They allow other brands to promote their products or services directly within the retailer’s digital websites or mobile apps. Using first-party customer data, retailers offer targeted advertising opportunities to brands, facilitating effective engagement with a relevant audience. Retail media networks provide a measurable and targeted advertising channel for brands whilst enabling retailers to monetise their digital assets.
The Future of Data Management is here
Google recently reiterated its plans to deprecate cookies, adding that 1 per cent of Chrome users will no longer have cookies beginning in Q1 2024. This means advertisers can no longer sit back and relax. Being proactive rather than reactive is key.
Looking ahead, the future of data management demands a shift towards embracing a first-party data strategy, pioneering innovative media purchasing approaches and comprehending the implications that will arise from the gradual phasing out of third-party cookies. By taking these steps, businesses can thrive, establishing themselves as leaders in the privacy-first era and building stronger connections with their customers based on trust and respect.
Matthew Lubeck, Vice President EMEA, Amperity
Matthew is the vice president of EMEA where he is responsible for the commercial expansion of Amperity, a leading customer data platform trusted by brands like Reckitt, Under Armour and Wyndham Hotels & Resorts. Lubeck joined Amperity in 2017 to help launch the company and has served in a number of key roles building sales, customer success, and marketing functions. Matthew established Amperity’s LGBTQ employee resource group (ERG) and is a trusted advisor and customer-centricity change agent to the C-suite across leading consumer brands.
Prior to Amperity, Lubeck spent 10 years with global beauty conglomerates Estee Lauder Group and L’Oréal as Group Head of Customer Data Strategy and Analytics, leading 30 brands across luxury, mass and salon professional divisions to better use data & unlock incredible beauty experiences, establishing L’Oreal as an industry leader. He resides in London with his husband and four-year-old daughter.
Amperity delivers the data confidence brands need to unlock growth by truly knowing their customers. With Amperity, brands can build a first-party data foundation to fuel customer acquisition and retention, personalise experiences that build loyalty, and manage privacy compliance. Using patented AI and ML methods, Amperity stitches together all customer interactions to build a unified view that seamlessly connects to marketing and technology tools. More than 400 brands worldwide rely on Amperity to turn data into business value, including Alaska Airlines, DICK’S Sporting Goods, Endeavour Drinks, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, visit amperity.com or follow us on Linkedin, Twitter, Facebook and Instagram.