Changing privacy rules are set to impact marketers’ ability to track consumers and their online activity – which could soon reconfigure digital advertising practices and confront retailers with a fresh set of choices when it comes to advertising, writes the editor-in-chief of US trade magazine Furniture Today, Bill McLoughlin …
For the past several years there has been a virtual gold rush to mine consumer data, turn it into marketing insight and target consumers with increasingly specific, timely and often ubiquitous advertising messages. While those who grew up reading Orwell’s 1984 in school may have found some of this a bit intrusive, for many younger consumers that level of, let’s call it ‘curation’, was preferred – and even expected.
Much of the D2C growth over the past several years has been fueled by this activity – including the ability to implant third-party cookies on consumers’ phones. This third-party data has provided a critical underpinning to customer acquisition and retention strategies, and birthed a new generation of digital marketing specialists.
However, the pendulum has begun swinging back in the direction of consumer privacy, and two key changes — one which occurred last year and another scheduled for 2023 — could soon force retailers and brands to reshuffle their marketing mix.
The first change was Apple’s release of iOS 14.5 in Q2 2021. As part of the release, the company required all apps to adopt a framework requiring those apps to ask the user’s permission to track them or gain access to their phone’s advertising identifier. To provide some context, Apple currently has an installed base of 113 million iPhones in the US alone, representing just under half (47%) of all smartphone users in the country.
As of July 2021, only 17% of consumers were opting to allow their apps to track them, according to Statista.
The other significant pending change is Google’s plan to phase out third-party cookies and put in place new privacy technologies beginning late this year, that will allow publishers and advertisers to begin phasing out their use by late 2023. While that may seem a long time away, for comparison, that’s less time than we’ve been dealing with Covid-19 and its myriad disruptions.
Much of the D2C and digital marketing activity of the past few years has been built on this technology, and its elimination will force marketers to explore other alternatives.
That’s not to say that new technological options aren’t under development – Google itself is developing a so-called Privacy Sandbox of alternatives – but bear in mind that the purpose of all these efforts is to protect consumer privacy, so it’s reasonable to expect at least some diminution in the ability to track consumers’ digital behaviour at the same level of recent years.
It’s too soon to tell what all this means for the digital marketing landscape, but at least in the short term it seems likely that SMS marketing, email and good old-fashioned print alternatives may get a fresh look as the digital ecosystem seeks a new equilibrium. It also highlights the increasing role that technology will play in retail marketing going forward, and the investment that will be required to keep pace.
