Karel Schindler, CEO of ROI Hunter, looks at how marketers can avoid privacy complications and future-proof their digital marketing strategies for years to come.
Following the introduction of GDPR in 2018, a number of steps have been taken to put personal data back in the hands of internet users. Last year, Apple made its move to eradicate third-party cookies, which allow advertisers to inform their digital strategies by tracking user activity once they’ve left the initial site. Google is following closely behind, with its hugely popular Chrome browser also set to drop third-party cookies by the end of 2024.
Where does this news leave marketers? Research by ROI Hunter shows that half (50%) of retail leaders don’t understand the implications of the changes, with almost as many (47%) still fully dependent on third-party cookies to drive their digital ad strategy. Perhaps more worrying, half of these retailers are even planning to reduce investment in dynamic advertising campaigns as a result. Google has even vowed to not build alternate identifiers to track individuals, leaving marketing professionals searching for a way to deliver ads to the right people and make best use of a budget that’s likely been identified for the chop in tough economic times.
But what if there was a way to tailor ads without having to reduce the dynamic ad budget or infringe on consumer privacy?
Supplementing customer behavioural data
Reducing budget on digital advertising campaigns is not the answer; marketers must instead start using alternate data sources to inform these campaigns rather than relying solely on customer behavioural data. There’s another important data source that remains criminally under-utilised: product performance level data.
By combining their product performance data from across Facebook, Google Analytics, Google Shopping, and custom sources with their catalogue, marketers can gain clarity on how their dynamic budget is spent. Importantly, product performance data doesn’t trigger any privacy alarms, yet can be used to aid in targeting by adding cross-channel signals to inform Google or Facebook campaigns.
Customer data will always have a place in terms of personalisation, but by supplementing it with product performance level performance data, marketers can ease privacy concerns while also gaining tangible insight into the performance of individual products in their catalogue.
With performance metrics like margin, number of transactions, and aggregated ad spend per SKU, retailers can determine which products are most effectively improving their bottom line, the products that are underperforming, those that are getting the most marketing spend or not enough, and more.
For example, they can decipher how much spend goes to products with high return rates or low-performing items and exclude them from promotions. They can also gain an understanding of the ratio of spend between discounted and fully priced products, and reallocate budget accordingly if it currently doesn’t suit the promotion strategy.
Navigating a privacy-conscious world
The introduction of GDPR and eradication of third-party cookies are part of a larger wave of growing mistrust among consumers about how corporations handle their data. To survive in this new digital world, preparation is vital. Marketers need to adjust their digital marketing strategy to include the integration of product performance level data to gain additional signals for targeting.
Creating targeted ads based on user behaviour alone will no longer be viable, and marketers should start adjusting now ahead of Google sunsetting third-party cookies in 2024. Moreover, it’s unlikely that increased privacy measures will end with Google’s decision. Marketers need to look towards alternative methods of data collection, and product performance data provides the answer.
Navigating a privacy-conscious world will be fraught with challenges, but by taking proactive steps to implement product performance level data now, marketers can avoid privacy complications and future-proof their digital marketing strategies for years to come.
By Karel Schindler