With CCPA looming and the holiday season upon us, many in our industry struggle with two very different questions. The first: In the face of data privacy pressures, how do we save targeted ads? The second: How do I explain my job at the next family gathering?
These concerns are more intertwined than you might think. Targeted advertising is under siege because the public—people like your family—feel betrayed by how our industry has handled consumer data. As our industry develops more privacy-friendly data solutions, we’ll need to explain how we’re addressing that violation of trust, or else even our best-intentioned privacy workarounds may be next on the data privacy chopping block. If we can’t show people like your cousin Mark or Aunt Phyllis why a new data targeting approach is privacy-friendly, there’s no reason the legislators they elect and browser companies they use ought to listen, either.
In that spirit of outreach, I want to zero in on one particular “ray of hope” for ad targeting: first-party data. As privacy initiatives chip away at third-party cookies, many see first-party data as the “replacement ingredient” to underpin targeted ads—not just to skirt the new restrictions, but to foster a new kind of privacy-respectful marketing. How can we make a “user-friendly” case that first-party data can support advertising that’s better for everyone?
I’ll provide my answer below.
These third-party cookies don’t just gather a few nuggets of information. Instead, they follow customers across their entire online activity; keep a persistent log of every site they visit; and sell that information widely.
How does this square with public sentiment on data privacy? Terribly. As a abroad array of findings show, consumers are open to brands’ using their data if:
- The consumer has allowed the brand to use that data,
- Brands gather and use consumer data in limited instances,
- There’s a fair exchange of data for benefits, and
- Brands are transparent about what data is gathered and shared, and with whom.
Consumers accept controlled, limited, and permissioned data use. Third-party cookies, by contrast, engage in 24/7 public fishing expeditions. (Regulatory-compliant“cookie consent” buttons, shown to be overwhelmingly “meaningless or manipulative,” rarely help.)
No wonder third-party cookies are caught in data privacy cross hairs.
Now consider a very different scenario—made possible by the first-party data brands and publishers gather from consumers directly:
- A user offers an email address in exchange for staying in touch with a company, receiving offers, and getting a personalized experience as the company tracks data across interactions.
- If that company is a brand, the user consents to letting the brand target him or her on websites across the Web.
- If the company is a publisher, the user consents to letting that publisher alert the permissioned brands that the user is on site. The brands use those alerts to serve targeted ads.
As in third-party cookie approaches, brands and publishers work together to deliver targeted marketing.But unlike third-party cookie approaches, there’s active participation on the part of the user (they’ve shared an email), plus clear and narrow restrictions on when the data is gathered and shared (only when users are engaged with brands and publishers they’ve consented to). There are no public data markets, no following users endlessly, and clear permissions—all in exchange for tangible benefits in the form of personalized engagements with specified brands.
To be sure, this is just one possible first-party data approach; executing it properly is hardly simple; and it still can be abused. But it’s also clear that while third-party cookies are highly invasive by design, first-party data can solve many prevailing concerns around data trust.
That is, if people like your family members can be convinced, which is why I encourage you to test out my argument at your next holiday party. Remember: Targeted advertising that respects consumer privacy is feasible today—but only if we can explain to the public that that’s so.