As the pandemic continues to cast a shadow of uncertainty, brands and marketers are just trying to keep moving forward with a business as usual approach as much as possible.
However, if not for COVID-19, what would have been the biggest story in the advertising industry this year is the continual deprecation of data.
While the iOS14 change earlier this year has been the most extensive individual blow to mobile marketing, the much bigger story is how data access and availability have been degrading for the last four or five years. Data is the lifeblood of modern digital advertising and powers every step of the marketer’s workflow from research & planning, audience targeting, ad testing, personalization, measurement, and optimization.
I’ve written a lot about how the limitations on third-party cookies will have an extremely negative impact on the status quo of today’s most utilized marketing measurement approach—multi-touch attribution (MTA). In my post, Marketing Measurement Cannot Be Reliant on Individual Customer Journeys: Incrementality is the Fix, I explain how the loss of third-party cookies will end the MTA experiment of the last fifteen years.
While MTA promised to finally solve advertising measurement, it never really delivered on that promise. Specifically, the fragmentation of the user identity across devices and the cookie deprecation issues has been the challenge. With even more limitations and regulations impacting individual user tracking, MTA just will never be the final solution marketers had hoped it would become.
But, third-party cookies are not the only data deprecation issues that marketers should understand.
Four Data Deprecation Trends Marketers Need to Better Understand
It’s not that marketers are unaware of the issues surrounding data usage, but without any real alternatives, they are forced to just do the best they can.
In an October 2020 industry survey, marketers identified a host of data challenges, with
the four top issues being: third-party cookie deprecation, cross-device attribution, accurate measurement, and assessment of campaign ROI.
Those top issues are all marketing measurement challenges. While the digital advertising industry has advanced so far in the last twenty years—with innovation across the spectrum of marketer needs—it’s with measurement that they still struggle.
And here’s the bad news—it’s getting worse.
A recent Forrester Research report, Apply Your Data Deprecation Plan, offers a sobering view of the data deprecation issues facing marketers and buckets the challenges in four ways:
Forces Driving Data Deprecation #1 – Consumer Actions
As a whole, consumers are simply creeped out over the practice of how companies have been using—and misusing—their data. Expert voices were pleading with industry as early as 2005 to wrangle in the bad actors, but there were just too many dollars flowing into digital advertising, and no one wanted to upset the apple cart.
Consumers have stopped waiting for the industry to fix itself and taken action themselves. Ad blockers, do not track lists, and cleaning/clearing cookies and browser history, are just some of the ways the consumers themselves are limiting the data that marketers have compared to a decade ago.
Forces Driving Data Deprecation #2 – Privacy Regulations
Again, driven by consumer backlash, government regulations have impacted the advertising industry with the first big “shot fired” by the European Union a few years ago, which required websites to request opt-in permission to cookie and track visitors. It’s why just about every website now has the Accept Cookies pop-up on the first page a user visits.
The General Data Protection Regulation (GDPR) is the toughest privacy and security law in the world. Though it was drafted and passed by the European Union (EU), it imposes obligations onto organizations anywhere, so long as they target or collect data related to people in the EU. The regulation was put into effect on May 25, 2018. The GDPR will levy harsh fines against those who violate its privacy and security standards, with penalties reaching into the tens of millions of euros.
The patchwork of legislation, such as LGPD, CPRA, and the ePrivacy Directive as consumer backlash continues to grow and more and more people call their representative to demand action. These policies not only require companies to get opt-in permission and limit how a company can use the consumer data and tracking mechanisms even when in full compliance. This growing patchwork of regulations increases the risk and cost of doing business and are forcing brands to completely rethink if they want to be using data in all cases, not just how they use it.
Forces Driving Data Deprecation #3 – Browser and operating system restrictions
Some browser and OS companies—such as Google, Apple, and Firefox—instituted their own consumer data limitation policies to avoid consumer backlash.
Apple’s iOS14 change earlier this year put a stop to “automatic opt-in” and gave the power back to consumers to decide if they want to allow companies to follow them or not. While popular browsers such as Safari and Firefox had already placed some restrictions on third-party cookies, together, they represented just 22% of browser usage.
This has limited but didn’t entirely kill marketers’ reliance on third-party cookies. However, because Chrome is the most popular browser with 64% of web usage, advertisers are now forced to find a new way forward as Google will follow suit with blocking third-party cookies in 2023.
Forces Driving Data Deprecation #4 – Walled Gardens
The companies with the most to lose regarding consumer backlash to data usage are the biggest Internet companies in the world. For example, Amazon, Facebook, and Google are closed ecosystems with hundreds of millions of daily users. For them, keeping consumers happy, safe, and trusting the Web is key to their success and lively-hood.
These companies have instituted their policies to avoid issues with their large user bases and hedge against their own financial risk. After all, going after the most prominent online players often seems to be the first action for consumers and media looking to publicize these issues.
These three companies represented 2/3rd of total U.S. digital ad spend in 2020 so any policy change they enact—data related or not—will have a cascading effect on what marketers can do online.
Incrementality not just thoroughly addresses measurement in the cookieless future, but all of these data deprecation issues
Most of my previous posts target the deprecation of third-party cookies and how incrementality testing bypasses that challenge—so feel free to go back and read some of those articles. However, my main point when I speak to marketers looking to future-proof their measurement approaches from data deprecation is how incrementality does that and how it is a superior measurement technique in many ways than multi-touch attribution.
But, yes, as Forrester Research outlines in their report, marketing measurement professionals have more to worry about than just third-party cookie deprecation. There are so many issues swirling around these days about the future of what data marketers will have soon and what they’ll even be able to do with what they do have. No one truly knows where we’re going to land in the future, but it seems to me that there’s one conclusion that every marketing organization—brand or agency—is going to come to:
- Data deprecation is real and the problem is getting bigger, not smaller
- Today’s most popular measurement approaches that rely on shrinking data will not be viable soon (especially MTA) or at least be very limited
- To be able to continue measuring and optimizing digital ad campaigns, a new solution is needed that doesn’t rely on data being deprecated
- Incrementality testing is the future-proof solution to data deprecation
Incrementality testing not only bypasses the data deprecation issue and future-proofs your marketing measurement & optimization needs but can provide insights to marketer challenges such as the online/offline connection which haven’t ever been solved before.
What to Do Next?
Facing marketing measurement challenges alone can be daunting without a solid technology partner. Are you interested in learning more about how Skai™ can help you better test, execute, and orchestrate your digital marketing efforts?
Contact us today to set up a discussion. Time is running out. The data is deprecating quickly, and you will want your marketing organization ready before your measurement approach is rendered completely ineffective.
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