Neha Thakrar

Authored by: Andy Hartnett , Ata Khan , Jordan McClintick, Gouthem Mukilan , Neha Thakrar

Within the last year, the future of passive data collection and targeted advertising has shifted dramatically. In January of 2020, Google announced that it would retire support for third-party cookies in its Chrome web browser within the next two years. With this decision, Google joined Apple who had previously opted to remove them from their browsers by default. In June, at their popular WWDC 2020, Apple announced new enhancements to iOS14, including possibly requiring apps to obtain permission from users in order to use their IDFA -- switching identity tracking from an opt-out, to an opt-in approach.

Both of these consequential decisions have something in common, they are both fuelled by an ever-growing focus on consumer privacy. Since Europe’s GDPR came into effect in May 2018, countries across the globe have been either developing or enhancing existing privacy laws, and broadening the definition of ‘personal information’ to include any information that can be reasonably identified, linked, or inferred back to an individual, and placing a focal point on safeguarding information against intangible harms, such as a sense of invasion. Within this backdrop, consumers’ awareness regarding their privacy has become more acute, and they are increasingly concerned about the collection and use of their personal data by large companies. Therefore, this has created a challenge for organizations to thrive in an environment in which consumers demand authentic, personalized experiences, yet have heightened expectations and distrust of existing data practices.

How have organizations been building identity resolution?

A few large technology organizations have traditionally acted as gatekeepers to a plethora of first-party data collected from consumers through online browsing and transactions, subsequently utilizing this data to build customer profiles, and provide a platform for more targeted and effective advertising. This leaves other organizations, who do not collect as much first-party data, to develop alternative approaches to building consumer identity profiles -- otherwise referred to in the industry as ‘identity graphs.’

For consumers that desire a more personalized experience, companies must have access to a resilient pipeline of individual data insights, whether through third-party relationships or from the individual themselves. The greater the level of data collected by organizations, the easier it becomes to build identity graphs, and improve both their consumer profiles and inferences -- both of which are essential for advertising purposes. Conversely, organizations that collect a lesser amount of data rely heavily on alternate approaches to enhance their identity graphs in order to identify consumers across different platforms for marketing purposes.

One method used by organizations to build stronger consumer profiles and facilitate ad personalization is through the use of ‘cookies’. Cookies are used to track consumer behavior on websites visited, purchases, and other interests evinced through web activity. These characteristics, in turn, are then mapped to identifiers such as email address, credit card information, and device identifiers in order to build consumer profiles. As more data is ingested, organizations are able to improve their consumer profiles, which allow them to offer more personalized products and services. Coupled with the capability to measure conversion rate on the advertisements supplied to an individual, organizations can use identity graphing as a way to continuously refine consumer profiles.

Similarly, for mobile apps, organizations have relied on device-based advertising identifiers, including Google’s Android Advertising ID and Apple’s identifier for Advertising (IDFA) to support advertising and measurement. IDFAs have acted as a substitute for cookies in delivering mobile advertisements to iOS devices, given increased consumer interest accessing content directly from an organization’s application. IDFAs have helped advertisers optimize their advertising campaigns, including targeting individuals who are most likely to be interested in the product/service being offered, as well as measuring ad success.

Consequences of these industry trends on organizations’ data strategy

Undoubtedly, the data that is harvested from cookies and IDFA is extremely valuable for advertising purposes and as such, the current headwinds have potential to heavily disrupt the current marketing and advertising space. The changes made by Google and Apple are indicative of a larger trend that is placing an increased focus on the importance and necessity of consumer privacy.

It is likely that companies who collect limited first-party data but rely heavily on third-party cookies in order to derive consumer profiles and other insights will be most affected. The loss of these insights have the potential to threaten such organizations’ relationship with their consumers and lose their foothold against competitors who have more first-party data at their disposal. In order to maintain their identity graphs, organizations will therefore be forced to reassess their first-party data collection strategies, and/or partner with third-parties in order to enrich existing consumer insights. A potential challenge for organizations going forward is straddling the fine line between partnering with third-parties to fill gaps in consumer insights, and forming a reliance on third-parties.

Alternatives to the traditional third-party collection

Google has suggested alternatives in place of third-party cookies that propose storing and processing consumer data within their own device. In addition to the proposed effort by Google, many organizations are actively working to come up with a unique identifier that can act as a substitute replacement for the cookie.

Companies that are at risk of losing third-party cookie data are beginning to develop a more robust framework around their own first-party data. Currently, first-party data flows through different channels and through disparate identifiers. To track consumers across different channels on a single platform, companies are: consolidating their data stores, mapping and tagging data for analysis, and engaging identity resolution services that can assist them in developing an identity profile of their existing data.

Identity resolution services, such as Liveramp, consolidate omni-channel data points of an user, identify relationships between the data to probabilistically match it back to the individual. These services use complex algorithms that match data points back to an individual and the outcome allows for a consolidated view of consumer data across different channels.

Preparing for change by reimagining data strategies

Although there is still uncertainty as to how advertisers will react to changes in the identity landscape, the current environment offers a unique opportunity for organizations to rethink their data identity strategies with data trust principles as a foundation. Numerous studies have shown that consumers are more open to sharing their data when organizations are transparent about how this data will be used, and the value that they are receiving in exchange. Organizations would therefore be advised to rethink their data strategies to focus on identifying the data currently collected and the permissions in place that influence the strategic data pipeline, assessing the overall value of this data as it relates to business objectives, and determining new ways of data collection that keep consumers’ privacy experience at the forefront.

Organizations that choose to partner with third-parties in order to obtain consumer insights must take extra precautions when it comes to ensuring that appropriate data trust principles and privacy safeguards are in place. For example, as consumer data and identifiers from various sources get compiled into third-party inventories, an organization in some way loses control over the consumer data initially shared. Along with this comes a host of potential issues such as the risk of data leaking, further aggregation or manipulation of the user data, and loss of control and management of your data.

Shifting regulatory burdens and consumer sentiments will continue to challenge existing data analytics and digital advertising norms, as consumers demand personalized experiences while also insisting on more control over the use of their behavioral data. As a result, organizations must continue to adapt their data strategies to promote transparency with consumers, encourage first party data sharing, and to optimize existing data sources as a means to satisfy both regulatory expectations and consumer sentiments.

Neha Thakrar

San Francisco, California, United States 1K followers 500+ connections

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Experience

Plaid

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Education

UCL

Licenses & Certifications

Certified Information Privacy Professional (CIPPE)

IAPP - International Association of Privacy Professionals

Languages

English

Native or bilingual proficiency

Russian

Limited working proficiency

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Neha Thakrar

San Francisco, California, United States

1K followers 500+ connections

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