Recessions Are Where Innovation Thrives
Fast-forward to now, and it feels like once again we are at another inflection point in the industry. But then it was a new technology disrupting the industry, and advertisers were being sold on the possibilities of seamless tracking and measurement in real time. This time it’s the much-needed shift to a privacy-first approach that is producing the disruption.
At the end of the looming recession, advertisers will face stricter data and privacy regulation as they try to prove value amid tightening purse strings and greater demand for return on investment.
And while the downturn looks set to be short, it’s going to take bravery and farsightedness from advertisers to go all in now, as the value propositions of Google and Meta are challenged.
How advertisers can evolve their digital strategy
It’s not easy to improve user privacy and consent, but this is an opportunity to rid the industry of its use of the highly flawed third-party cookie and progress towards consolidating and using advertisers’ own valuable data assets. So instead of “how we can get around the loss of advertising identifiers,” the focus should be on “how we can improve what we do in a privacy-first way.”
First, advertisers need to resist the reaction to pull back on spend as measurement becomes harder. Even if campaign KPIs drop to zero — especially using legacy measurement approaches — remember your customers are still there, even if you can’t track the ROI. It’s a case of finding a way to prove the value of advertising in a way that respects privacy choices.
Investing in durable first-party data technology — and a strategy to collect and store customer data in a consented manner — are key. Data clean rooms have emerged as a really valuable tool to leverage first-party data in a privacy-compliant way.
Advertisers should consider trying targeting strategies that are not dependent on advertising identifiers — for example, contextual — and looking at regional opportunities. This data can also be used to help understand user behavior at scale, allowing for more effective targeting than what is sometimes possible with existing buying platforms.
Consideration should be given to building a measurement plan that can adopt media mix modelling alongside in-channel measurement. This is emerging as a robust way to evolve campaign measurement and optimization that does not depend on user-level data.
The winners from today will be the giants of tomorrow
To be clear, digital media is in good health. But new platforms are emerging, existing players are being challenged, and with new regulations coming into play, now is the time for advertisers to invest time and effort in moving their approach forward.
Following a recession, the pace of change will accelerate. With the privacy-first era fast approaching, advertisers who get their first-party data strategy right, start building their data resources, and evolve their activation and measurement, will gain the competitive edge when these techniques becomes compulsory requirements.