Privacy, Please: What Do Changing Privacy Parameters Mean for Digital Marketing?

Melissa Megginson Axtell, Director of Community Marketing

Oct 28th 2021

 

Ecommerce professionals have always navigated a shifting landscape, as technology and market demand advances on an almost daily basis.

While some changes are subtle, others are much more significant, having far-reaching effects across the whole industry. Falling into this camp are the upcoming changes to online privacy.

If you’re working in the online retail space, now is the time to start educating yourself and making contingency plans. In this article, we’ll explore some of the privacy changes that are fast-approaching.

Top Level Summary: What’s Changing?

Let’s start by examining the main changes to privacy practices that have the industry sitting up and paying attention. Two main events are dominating the ecommerce horizon: the end of third-party cookies on Chrome, and the great privacy controls being pushed with the release of iOS 15.

We’ll examine both in a little more detail, but before we do, it’s important to note that common underlying trends are driving both of these changes forward. Privacy, and the demand for this to be proactively protected, has never been more prevalent in the public mind.

While these two impending changes might be top of mind currently, it’s important to note that they’re symptomatic of a wider and more deeply rooted shift within industry sentiment. When it comes to privacy, we can safely expect to see further adjustments in the future. The way that we prepare for and handle these most imminent changes will lay the groundwork for future adaptation and evolution.

Google Phasing Out the Use of Third-Party Cookies in Chrome

Following in the footsteps of Safari and Firefox, in 2020 Google announced that it would also be ending the use of third-party cookies on its browser, Chrome. With Chrome accounting for about 69% of all desktop internet browser use, this effectively spells the end of third-party cookies.

Although Google may be behemoths within their space, their monopoly is proving somewhat problematic in actioning this ban. By cutting out third-party cookies, Chrome makes life harder for other advertising businesses, theoretically increasing Google’s advantage.

Regulatory pressure, specifically that coming from the United Kingdom’s Competition and Markets Authority (CMA), is slowing down proceedings, and in June 2021, Google announced that they would be updating (read: delaying) its timeline.

As things currently stand, Chrome will phase out support for third-party cookies over a three-month period finishing in late 2023. Watch this space.

Enhanced Privacy Controls With iOS 15

In June 2021, Apple unveiled its plans for iOS 15. A strong focus on privacy controls was expected, as the company built on the foundations laid with iOS 14 (which struck a significant blow to data collection by businesses such as Facebook).

As predicted, Apple charged ahead, championing privacy – announcing a new “menu” or dashboard that will enable much more transparency in the way that apps installed on your device are collecting and communicating information.

Email marketers, in particular, sat up and paid attention to the announcement that the Mail app would no longer be tracking various data points around email open rates and location at the time of opening.

Understanding Why Privacy is Changing

As previously mentioned, there are some common trends underpinning these changes. When we start to see clear patterns, such as this strong focus on privacy, emerging within the industry and being reflected in the direction of so many of the leading companies, we can safely assume that some significant drivers are at play.

Privacy concerns, especially within the online space, have been mounting for years now. As tracking technologies have advanced, public concern has risen. In a “cat and mouse” pattern of advancement, as new tools emerge to gather data and track behaviors, so too does awareness and inclination to actively shield ourselves from observation. Almost 43% of global internet users (aged 16-64 years old) use ad-blocking tools at least once a month. As use of ad blockers increased, websites adapted their own strategy to detect and counter block users, requesting blockers to be disabled before content is viewed.

But there’s something of a paradox at play here. While the public is increasingly set against being covertly tracked online, their behavior suggests that they’re more than happy to opt in to certain forms of active, consensual surveillance. This is especially true where a tangible benefit is perceived, or they’re also privy to the insight attained.

We only need to look at the rise of wearable tech such as fitness trackers to see this at play. The global fitness tracker market is projected to grow from $36.34 billion in 2020 to $114.36 billion in 2028 – a CAGR of 15.4% in the forecast period 2021-2028. Similarly, the rise of the FemTech sector has shown many people willing to exchange intimate health information for the purposes of contraception, conception, and general fitness and productivity.

With the general public showing willingness to share some information (when it benefits them) it’s becoming increasingly clear that the key to obtaining consent and mutual acceptance of a situation in which behavior is actively tracked is transparency. When businesses are upfront and honest about the data they collect, and can actively demonstrate the advantages that this brings to their users, acceptance, and opt-ins are more likely.

With this in mind, an approach to privacy can start to represent a real differentiating factor for businesses – giving them scope to add real competitive advantage and leadership within their market. Apple’s iOS 15 is a great example of this, with the brand actively positioning themselves as demonstrating “privacy leadership” in their press releases.

What Does This Mean for Digital Marketing?

So much for the top-level theory – what do the impending changes to privacy mean for digital marketers, under pressure to obtain real results? Let’s explore some of the practical impacts and implications, focusing first on the loss of third-party cookies.

What exactly are marketers losing with the death of third-party cookies on Chrome? Although they also have a role to play with regard to social media buttons and live chat pop-ups, the core function of these cookies lies in tracking, and so it’s no surprise that retargeting strategies are going to be hit the hardest.

Over recent years, retargeting has become a popular mainstay strategy for digital marketers. The stats don’t lie: retargeting is powerful. Lure a shopper back to your site with a retargeting campaign ad and they’re 70% more likely to convert, when compared to those that aren’t retargeted. Retargeting research suggests that on average retargeting reduces cart abandonment rate by 6.5% while increasing online sales by 20%.

Reframing Retargeting

Chances are that retargeting campaigns have played a key role in your marketing plans to date, so the loss of third-party cookies does mean some serious thinking will be needed with regard to adapting your current strategies. What’s the best way to approach this challenge? One thing to keep in mind is that this situation is evolving – nothing is certain (just look at Google already moving the goalposts regarding timeline) and so keeping alert, engaged, and agile in your response will be crucial to success.

It’s time for marketers to roll up their sleeves and get hands-on in the new Google Privacy Sandbox. The new initiative offers five Application Programming Interfaces (APIs) that should, in theory, replace the role of third-party cookies with regard to monitoring behaviors and gathering aggregated data on conversion and attribution.

Another avenue to be mindful of are the tech giants such as Facebook, Amazon, and Google who will come to represent “walled gardens” of data-rich sources of information and customer insight, which can only be used within their owned properties. This gives you more options – but parameters are limited.

Failing Your Mailing

When we come to look at the impact of Apple’s iOS 15 updates, the biggest implications fall on email marketing. Open rate is effectively dead in the water now, so this metric will need to be replaced with other parameters of success. Mail tracking pixels will become a thing of the past, and the Hide My Email feature will also impact the insights that can be gathered from lists.

If you’re looking to prep for this change, the first step is to weigh up its impact. Consider how much of your readership will be impacted – how many of them are using the Mail app? Optimize in all other areas, with a focus on deliverability, tighter segmentation, and offering valuable, engaging content.

Silver Linings: What Advantage Can Marketers Take From the Changes?

What positive lessons can we take from these upcoming privacy changes? Firstly, as digital marketers, we’re all in the same boat here. The challenges we’re about to face are universal. Change in our industry is inevitable – and evolution is a good thing, an opportunity to revise strategy and improve on a level playing field. It’s time to innovate.

Let’s not forget that, while they undoubtedly had their very useful applications, third-party cookies never represented a flawless tactic. One of the great downsides to third-party cookies is the fact that they are device-specific, and as such, in some contexts, a rather blunt tool. Moving towards other routes may ironically offer better targeting, and as a result, better ROI.

Marketers would be wise to keep a few basic truths here as their guiding “north star” when building out new battle plans – customers are clearly signaling their desire to be marketed to in a more transparent and open manner. Again taking retargeting as an example – although undoubtedly well-targeted, as viewed items followed shoppers around various web properties for days on end, haunting their browsing experience, retargeting advertisements never represented the most subtle of strategies.

The overt nature of the tracking and targeting related to retargeting was commonly described as a source of annoyance and definitely drew attention to the extent to which user behavior is recorded and leveraged for profit. Tighter privacy practices represent an opportunity to deliver a more human, honest, and upfront form of promotion.

What’s the Way Forward?

Clearly, old patterns and strategies are not going to play out in the new privacy landscape. While we wouldn’t recommend knee-jerk reactions (now’s not the time to throw out your whole playbook!) it’s clear that, as digital marketers, we need to be getting clued up and prepared to adapt to a changing situation.

There are a few certainties in the midst of all of this change, and one of the most important of these lifelines comes in the form of first and zero-party data. Let’s explore exactly what’s meant by this, and then expand upon the way in which these sources are going to help you find future success.

First-Party Data

Many marketers are leaning towards a solid first-party data strategy as a solution to the end of third-party cookies. The biggest advantage of first-party data is that it’s yours: collected directly, totally free, and completely trustworthy. From digital interactions to purchase history, behavior through to preferences, first-party data offers a powerful source of intelligence for targeting your marketing towards existing customers and pulling insights to apply to those who you’re still courting.

First-party data might not have the same reach as third-party data, but it’s incredibly helpful for deploying more personalized messaging. It can also offer better advancement when it comes to improved omnichannel experience, and can really help you close the loop on attribution, focusing on the stage of the customer journey that offers real value.

Zero-Party Data

Zero-party data, in some ways, offers even more of an exciting prospect. Just as with first-party data, it is free, collected, and owned by you – but instead of being gathered passively from observations and recorded interactions, zero-party data is information that’s actively, and willingly shared by your customers – with a view to improving their customer experience.

You might collect zero-party data through quizzes, review attributes, onboarding flows, sign-up processes, interactive emails, or even in-store. There’s a very exciting opportunity for marketers to get creative here, with zero-party data doing double duty: improving brand engagement by offering a range of ways to interact, and improving customer experience as a result.

Privacy & Digital Marketing: The Road Ahead

Nothing stays the same for long. This industry has a habit of keeping us all on our toes, and the upcoming changes to privacy will certainly give the sector cause to shake up a few strategies and rethink established tactics.

Embracing change is important, and in the months before these changes hit, there will doubtless be a fair amount of soul searching ahead of the inevitable impact and temporary disruption.

Ultimately, all impending changes point towards a marketing industry that’s evolving – more transparent, more human, beneficial in a more balanced and holistic fashion.

If you’re looking for some practical ideas to kickstart your privacy preparations with regard to the end of third-party cookies, we’ve pulled together a helpful checklist that will get you off to a flying start.