Navigating Consumer Privacy and Data-driven Targeting



By John Tan

Recent changes in consumer privacy laws and protections reflect consumers’ increasing demand for privacy of their data.

As a result, third-party cookies will be completely phased out by the three most popular internet browsers by 2023. Apple’s latest iOS 14.5 update will effectively end automatic opt-in data tracking through mobile apps.

For consumers, this means more control over their data. For businesses and advertisers, this means digital ad targeting and tracking will change significantly.

Consumer Privacy

Digital Retargeting and Social Media Campaigns

The two most common marketing channels affected by these changes are retargeting ad campaigns and social media ad campaigns.

If you currently retarget website visitors with digital ads after they abandon a shopping cart, you use cookies to track and retarget these web visitors. This form of retargeting will no longer be possible.

In addition, if you’re a small business dependent on the affordable, highly-targeted social ad campaigns that Facebook offers, you won’t be able to target the significant number of Facebook iPhone users who opt out of sharing their data after iOS 14.5 update. Your ad campaigns will target fewer users and your campaign reporting will be less reliable.

Although stricter data privacy regulations will create a significant obstacle on the road for marketers, there are solutions and technologies you can leverage now that will still comply with the new regulations.

Alternative Ways of Targeting and Tracking Consumers

1. First-Party Cookies

First-party cookies differ from third-party cookies because they relay your data to the website owner while third-party cookies relay your data to outside sources.

Publishers, like Apple and Google, can collect this data from willing consumers to segment and build audiences based off first-party cookies.

Collecting first-party data also takes time and creates walled gardens, but the current deprecation of cookies will encourage new industry standards to emerge, creating a more unified experience for marketers, businesses, and consumers alike.

2. Second-Party Data

Second-party data is also a great way to replace third-party cookies. Second-party data offers accurate audience segmenting and targeting.

An example of second-party data would be the data collected by publishers, like Apple and Google, through first-party cookies as described in the previous section.

Smaller companies may not have enough traffic volume to depend on their own site visitors and first-party cookies to collect enough targeting data. However, partnering or purchasing data from publishers allows smaller companies to target audiences accurately.

Second-party data can also be used to build lookalike audiences of ideal customers, allowing smaller companies to build larger audiences.

Data-driven Targeting

3. Fingerprinting

Fingerprinting is a form of data collection that occurs at the browser level. It combines the specifications of a user’s browser and device to create a unique ID.

Details like your device screen resolution may seem insignificant, but when combined with all data points in your unique ID, it can identify a specific user with 99% accuracy.

4. Unified ID Solutions

The above sections essentially describe a way to identify targets, but these methods of collection don’t provide synthesized data. However, there are several data companies that graph and combine similar users into audiences and cohorts. 

The Identify Graph uses machine learning algorithms to combine a user’s activity to create a profile associated with a unique identifier, like an email address. This solution is similar to the way third-party cookies are used today.

Google’s browser-based model aims to create cohorts of like individuals based on websites they visit on their chrome browsers. This allows marketers, advertisers, and businesses to target cohorts that match their target audience while still protecting consumer data.

Data Modeling and Custom Indexes

5. Custom Models And Indexes

Data modeling, building lookalike audiences, and custom indexes are solutions that have been around for years.

Though less commonly used by small businesses than cookie-based targeting, data modeling services can deliver your ad to the right audience without ever placing a cookie on their browser or requesting an opt-in.

It’s all about the quality of the data.

6. Intent Data

There are also new data technologies on the rise, like intent-data, that allow companies to target the right audience in real-time.

Intent-data can identify consumers interested in your product or services in real-time. Sharpdots leverages this new technology with our lead generation services. Contact us to learn more.

Intent-Data, identifying consumers.

Evolving with changes in Consumer Privacy

The recent changes in consumer privacy, will not stop you from marketing your business online. As consumer privacy laws and protections change, technology and marketing strategies continue to evolve as well. We hope understanding how targeting is changing will help you stay ahead of the curve and continue to push your business forward in 2021!

If you need help finding the right targeting solution for your business, feel free to contact me.

You can also follow us on LinkedIn and Facebook  for related news and updates. 

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