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Future-proofing your targeted advertising in times of uncertainty

Advertisers need to think about the best privacy-safe plan for ad tracking that doesn’t rely on cookies, and this article outlines the options, with their strengths and weaknesses. It looks at hashed emails, clean rooms and micro cohorts (which are described as the biggest opportunity today for privacy-first, cross-platform campaigns). The advice to any business that has not already started to wean itself off cookies is ‘do it now’!

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Chris Kelly, CEO, Upwave
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As long as there has been digital advertising, there has been tension between ad effectiveness and privacy. The first time someone visited a website and saw an ad for a product they had researched elsewhere on the Internet, they may have responded with disbelief and excitement. But seeing it 10-20-30 times after, that bemusement turned to worry, as it appeared the entire Internet knew their personal details.

What started as novel and helpful thanks to cookies, became overused and concerning. Increasingly consumers of all ages, locations, and persuasions have a better understanding of cookie-based ad tracking and have expressed concerns about its usage. Legislators got involved, and browsers began responding en suite by limiting or outright banning global cookies, while setting the stage for their own targeting capabilities. While their ultimate death keeps being forestalled, a day without cookies is on the horizon. As that day keeps getting pushed back, one likely reason is that it’s hard to wean ourselves off them without knowing what’s next.

While 84% of consumers care about privacy and want greater control over how their data is used, they also don’t want to return to an advertising stone age where ads for products they don’t want dominate their screens.

With changing industry standards and compliance requirements, it’s difficult for brands and their media partners to plan long-term advertising efforts that will be both effective and privacy-compliant. But that balance is going to be more critical than ever going forward.

There will still be a place for targeted ads, but they must have greater privacy controls. Advertisers, agencies, and technology vendors are all debating how to future-proof their cross-channel marketing and brand marketing optimisation. The goal is to identify a privacy-safe plan for ad tracking that doesn’t rely on cookies.Cookie-dependent advertisers must rip up their old playbook and begin investing in the future. The changing privacy landscape presents a catalyst and an opportunity for advertisers to rethink measurement. But while there are many potential solutions, all will not pan out, and others could lead advertisers astray.

Here’s what businesses need to consider to future-proof their advertising in the ensuing cookieless environment.


Begin weaning yourself off cookies

Even though Google has not yet banned cookies from Chrome, other elements make cookies less desirable. Users can easily block cookies on their mobile devices, and cookies don’t easily track in a multiple device world (e.g., users browsing a phone versus a desktop or watching streaming on a tablet or a CTV). Advertisers can no longer depend on cookies for advanced targeting.


Hashed emails have significant limitations

“Hashing” emails allows one website to obscure and “pass off” a user’s email to another destination via an anonymised customer ID. So they can track customers who logged in across multiple browsers or social channels. While it’s a novel idea, it cannot scale because only 10% of Internet traffic is logged in at any time. It’s too small an audience to develop a modern advertising strategy around.


Clean rooms show promise, but aren’t quite ready

A clean room can create a safe environment to combine anonymised first-party data with third-party data from ad platforms and publishers. It provides a promising opportunity to analyse ad tracking data while staying privacy-compliant. It is reasonable to think that almost every advertiser with at least $1 billion in sales will use them in the next five years, and the IAB is expected to release its first attempt at clean room standards later this year.

The work IAB and other organisations do to create standards is important as there is and will continue to be a tension between the privacy restrictions the clean room owner puts in place and the usefulness of the queries those clean rooms can support.

In addition, clean rooms typically contain data from only a single company. So, if you’re running a cross-channel campaign, you’ll likely need to analyse data in multiple clean rooms. In addition, clean rooms are normally run on first-party data, which some advertisers may not have due to the nature of their business. Therefore, the debate over privacy versus usefulness means that clean rooms are more theoretical than applicable right now. A lot of work and compromise must occur for clean rooms to be ready for use in all campaigns.


Micro cohorts: ready for primetime

While clean rooms show great future promise, micro cohorts are the biggest opportunity today for privacy-first, cross-platform campaigns. Micro cohorts deterministically isolate small groups of people without needing cookies, creating the opportunity to scale quality reach.

Even so, there are still challenges. It is difficult to distinguish between office and home IP addresses at scale, and some device IPs may be blocked for privacy reasons, like cookies. Also, creating successful micro cohorts requires significant investment in processing large data sets using complex algorithms. Nonetheless, micro cohorts present a promising alternative in a privacy-protected future.

There’s a lot to take in and debate. And no one solution will fit any individual advertiser. That said, the planning for the cookie-less future must happen now. And there are new approaches that are ready to use today and those that are more wait-and-see. Ultimately, the most important thing to do is to talk to your partners about the best privacy-safe plan for ad tracking for your business that doesn’t rely on cookies.


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