Even though the digital privacy push has been at the forefront of our minds for over a year, many advertising leaders are still unclear about their plan moving forward.
IAB reported that 41% of media buyers didn’t believe their stakeholders fully understood the ramifications of the loss of cookies and personal identifiers. And Forrester recently surveyed over 100 advertisers in the U.K. and the U.S. Only 23% of the respondents said they had a formal strategy in place for using first-party data.
Since Apple released its iOS 14.5 update that requires apps to ask for consent to tracking across other apps and sites, the effects of the push for privacy have started to sink in.
As advertisers prioritize first-party data, ad tech companies have the challenge and opportunity to partner with customers in new ways.
Apple’s iOS 14.5 has impacted ad tech companies of all sizes
Back when Apple’s privacy update was first announced, many perceived it as a bigger disruption than Google’s sunsetting of the cookie. Now that we have data on how consumers respond to the tracking consent popup, we can explore just how much apps are being hampered by this change.
According to Branch, only about 25% of users give consent to tracking, though that rate varies across apps. This has made customer acquisition costs more expensive for some companies.
”We see a 50% increase in [cost-per-acquisition],” said Ikkjin Ahn, CEO of Moloco, a mobile ad tech software provider to AdAge. “But we will begin to see some downward trends as we introduce better machine learning models, and also adding all the features from SKAdNetwork.” The SKAdNetwork is Apple’s alternative solution for tracking campaign attribution.
Facebook is one of the largest apps affected by these changes, and though they had a profitable quarter, they warned investors about upcoming headwinds caused by this update. With the changes, they’ve invested more in digital storefronts to keep users in the platform directly, capitalizing their massive collection of first-party data.
If a company as large as Facebook is fortalizing their first-party data approach, it’s certain smaller companies and advertisers will have to as well. Those that don’t have a first-party data strategy in place need to figure out a plan. And they need to find the right partners to support them in that process.
First-party data is important, but being sneaky isn’t sustainable
This need for data has led some companies to take part in nontransparent tracking behavior.
For now, some websites have been engaging in bounce tracking or using QR codes to collect digital information. But companies must be careful—the push for privacy regulation is only getting tighter.
Only California, Nevada and Maine have privacy laws in effect right now, but several states have legislation moving forward. Federal lawmakers have also introduced laws regarding the sale of personal information from third-party brokers. Though these laws aren’t in place, Google has already taken action against a company selling location data.
While the U.S. has a system where lawmakers catch up with tech after it’s built, Google and Apple are already taking steps to protect privacy (whether that’s for altruistic reasons or not.)
It’s not only best practice to build a relationship with customers built on trust—but laws will also make it necessary to be open about what data is being collected and stored.
Ad tech companies can help advertisers with first-party data
It’s clear that first-party data will be gold as the digital ecosystem evolves. Many marketers have their work cut out for them, which is why they’ll need the right tech partners who are growing with them.
The Trade Desk is releasing a new solution, Solimar, that allows brands to upload first-party data into its system. This plan is for this data to work in conjunction with the Trade Desk’s Unified ID 2.0 to track users across different sites.
But the Trade Desk doesn’t want to be the only ad tech company innovating. The company announced its new venture capital arm, TD7, that will invest in ad tech startups and serve as a unified network of ad tech companies.
“We want to see more smart ad tech people succeed in small and disciplined companies because that will help the whole industry innovate and grow,” said Jeff Green, co-founder and CEO of The Trade Desk.
There are still many questions surrounding alternative IDs and what will work in the next stages of digital advertising. Even though the next several years will be challenging for the ad tech industry, it’s also a time to be a support to marketers who still want the power of targeted advertising.
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