The sky is not falling

Data-driven thinking“is written by members of the media community and contains new ideas about the digital revolution in media.

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

For more than a year, close industry observers have endured a never-ending stream of anguish over the digital marketing disruption due to Google’s disapproval of third-party cookies and Apple’s AppTrackingTransparency privacy changes. The topic dominates our news sources and is the focus of at least two to three industry forums each week.

But consumer privacy, when it comes to tracking and redirecting behaviors, has long faced a major reckoning. And while it may seem like 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 most of the time these campaigns have not performed better than if they had served a random sample. Consumers have long been annoyed by the proverbial pair of shoes that follows them online for weeks after a purchase.

The data ecosystem has always been a “buyer care” environment due to a lack of transparency or quality standards for the data on offer. Unfortunately, the efforts made over the years to infuse more transparency into the process (for example, ingredient labels or quality ratings) have never been adopted on a significant scale.

Context dominates

How often have we heard of reaching the “right consumer in the right place at the right time”? For decades, before cookies were more than just dessert, advertisers could target potential customers by carefully placing ads in environments, both physical and media, where they were likely to be seen by qualified consumers. No personally identifiable information is required. Minimal risks to brand security.

There are now more contextual targeting solutions available than ever to successfully implement the proven tactic in a digital environment in a privacy-friendly way.

Welcome back, MMM

It is true that there have been setbacks. Multi-touch attribution (MTA) and customer journey diagnostics will face new roadblocks without identifiers. But rather than mark the demise of attribution, MTA’s pain will lead to more attention being paid to its prodigal brother, the Marketing Mix Model (MMM). The debate between MTA and MMM has been exhausting for many advertisers, so the integration of the two is a natural and welcome development. MTA, in its current form, has difficulty accounting for both long-term and short-term advertising impacts fairly. A renewed MMM approach is more likely to accurately reflect both.

Recent years have already seen a decline in digital targeting on the open web, with the blocking of cookies in Apple’s Safari and Mozilla Firefox browsers and the adoption of ad blockers by consumers. An attribution provider recently estimated that for most customers, 50% of the data available to them in 2016 is no longer available today.

OK, what is my point? It is not simply that valuable old practices, such as contextual guidance and MMM, should be welcomed again.

That’s true, but the best news is that as we move toward the requirements to secure more explicit permission to collect, use, and manage a consumer’s data, the marketing ecosystem will really improve and data-driven approaches will be more effective than they are today. Databases will gain value as marketers learn to trust that potential customers have allowed their data to be used because they are interested. Businesses will focus on creating their own privacy-compliant databases, 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 a free sample. Make them an offer.)

The trade press has been filled with visions of the post-cookie apocalypse, but I have none of that. Especially after what we’ve collectively been through last 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 over the last decade will no longer work. You will have to ask consumers for permission to obtain their data, and not everyone will agree. Many consumers will expect to redeem for that permit. Brands with direct customer relationships will do better.

But we will all survive. Even targeting will survive as long as you don’t abuse privacy.

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


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