From wide-ranging legislations such as the GDPR (General Data Protection Regulation) in Europe, the CCPA (California Consumer Privacy Act) or China’s recent PIPL (Personal Information Protection Law), to Apple’s controversial iOS 14 update and Google’s doubling down of removing third-party cookies.
Restrictions on digital data practices are being introduced by both government and private entities at an increasingly fast rate.
iOS 14 advertising impact
In the final quarter of 2020, Apple introduced an industry-changing feature, as part of its iOS 14 operating system update, called App Tracking Transparency (ATT). This feature requires user permission for advertisers to track user activity outside the app via IDFA’s (Identifier for Advertisers). The IDFA is a persistent ID commonly used by advertisers to track and target users on iOS devices with personalised advertising and targeted recommendations. Previously, IDFA’s were opt-in by default. Following iOS 14, users must now explicitly grant IDFA permissions, with data suggesting as many as 96% of iPhone users in the U.S. are choosing to opt-out of cross-application data tracking. Disruption from this has resulted in reported conversion data being delayed by up to 72 hours within the platform, and in some cases, not registering at all.
Organisations with a strong reliance on conversion tracking data, such as Facebook, have audibly condemned the changes citing significant fallout to advertisers and small businesses alike.
Another privacy-preserving feature introduced within iOS 14 was the option for users to disable precise location tracking. If only approximate location sharing is enabled or location services are disabled altogether, then an accurate understanding of the customer journey and precise attribution is harder to build. These restrictions to audience targeting can be slightly mitigated through geotargeting and geofencing – essentially segmenting customers by their proximity to known locations. Broadly speaking, campaign measurement, attribution and media planning have been most heavily affected.
Facebook Conversion API
The iOS 14 privacy update from Apple resulted in unprecedented changes to Facebook’s advertising platform, in particular how conversions are tracked on mobile devices. The data required to track conversion events, optimise ads and retarget users both on and off Facebook’s network is gathered via the ‘Facebook Pixel’. Although a valuable asset, the Facebook Pixel is a browser-side tool – meaning it tracks data through the user’s browser as pixel events. Apple’s transparency feature heavily restricts browser tracking cookies on Apple mobile devices. When considered in combination with the growing presence of in-browser ads and cookie blockers, Apple’s change has significantly reduced data acquisition from this pathway.
The Facebook Conversion API is a server-side tool designed to facilitate personalised advertising while maintaining customer privacy. It tracks web conversion, post-conversion events and page visits, all via the Facebook server.
The Facebook Pixel and Facebook Conversion API have complementary features, meaning they are most effectively used in tandem. Integrating both allows for more accurate total funnel tracking, a better omnichannel understanding of the customer journey and increases the chances of registering a conversion. Facebook also has measures in place to ensure duplicate conversions for the same event are not recorded in a process called ‘deduplication’.
Shifting digital economy in a cookie-less world
Tracking a user’s activity across multiple domains (websites, applications etc.) is achieved via third-party cookies. Beginning in 2022, Google plans to phase out this type of cookie from its advertising networks and Chrome browser culminating in the complete removal of third-party cookie support by late 2023. These changes, applied in two stages, will most likely be accompanied by some degree of disruption. To minimise this impact, it is important for those of us working in the digital sphere to anticipate how Google will shape its online advertising space.
Google began testing a new set of APIs called ‘The Privacy Sandbox’ in March 2021. In essence, the Sandbox aims to address the privacy concerns of users, while still providing advertisers and business owners with a platform to grow their operations.
In a move away from individual tracking measures (third-party tracking cookies, fingerprinting etc), Google has proposed a new methodology which they have coined the ‘Federated Learning of Cohorts (FLoC). As part of this process, people are clustered based on their browsing patterns and similar interests into anonymized groups or ‘cohorts’. Advertisers can then target these cohorts rather than individuals in a privacy-preserving, ‘safety in numbers’ manner. According to Google’s simulations, FloC can provide ‘at least 95% of the conversions per dollar spent when compared to cookie-based advertising’.
Emphasis on first-party data tracking
Data collected directly by an organisation from an audience is referred to as first-party data. As Google removes support for third-party data sources and further global privacy restrictions are introduced, implementing first-party tracking will become vital. Essentially, this process begins whenever a user visits an online property, with a first-party cookie tracking the user behaviour across related websites and affiliated domains. Any user data consensually submitted also falls into this category.
Our expectation is for more businesses to employ first-party data strategies, with a priority around encouraging consumer registration to websites or services. Many customers will resist novel forms of in-depth data collection. Therefore, minimal data should be requested at first, followed by a progressive profiling strategy to incrementally gather more data as customers continue to engage with the brand.
Google Analytics 4 vs Universal Analytics tracking
Google Analytics 4 (GA4) primarily uses first-party cookies to track data. This contrasts with Universal Analytics (UA) and its reliance on browser cookie data. By leveraging a combination of first-party data, IP-anonymised tracking, advanced machine learning algorithms and statistical modelling techniques, GA4 is privacy-centred by design.
While still compatible with cookie-based strategies, GA4 prioritises the tracking of User IDs. These can be anonymised via Google tag manager into an unidentifiable client ID for each user, yet their behaviour on your site can still be tracked. As a best practice, we recommend setting up a GA4 property to run alongside your primary UA analytics account in order to gain familiarity with the platform before a mandatory shift is needed.
Transparency is key
Cisco’s 2021 Consumer Privacy Survey highlighted increasing customer concerns around data privacy, as well as a lack of confidence in organisations to handle their data ethically and responsibly:
- 76% stated that it was ‘too hard to understand how their data was being used’
- Nearly half of respondents feel they are unable to effectively protect their data
- 32% of respondents have acted in switching companies or providers over their data practices or policies – an increase of 3% from the previous year
- More than 50% of consumers would switch to companies with more transparent data policies
These statistics demonstrate the need for clear communication of user data policies to alleviate concerns and avoid customer churn. A transparent and education-first approach also contributes to a positive brand image and the likelihood of bringing in new customers.
If 2021 has been characterised by all things ‘privacy’ we don’t believe that 2022 will depart from this trend. Government-led privacy regulation previously has been a multi-year long process. By leveraging their industry dominant platforms, private companies such as Apple and Google now have the means to change online tracking practices in a matter of weeks.
Therefore, our PPC London agency team strongly suggest that resources be invested now in shadowing and forecasting how this new landscape morphs; and, in the interim, we also recommend these practical changes:
- diversification of current ad channels
- exploration of alternative search engines for advertising space
- expansion of paid social media presence on platforms such as Pinterest, Twitter, LinkedIn and Reddit
- investment in creative strategies and performance
- differentiation in a highly saturated advertising landscape with a decreasing reliance on hypertargeting.
In essence – we need to remain knowledgeable about industry privacy trends. Avoid complacency with current website support services and standards, seek out alternative strategies now and embrace the changes that may fundamentally transform the way we work in the future