Privacy Changes Are Evolving. How to Get Ahead with Social Advertising.
Digital privacy has always been a hot-button topic. For some consumers, an exchange of data is a small price to pay for the convenience and ease of making purchases through social platforms. Others are more judicious with which apps and browsers they use — only the highest privacy standards will do.
For e-commerce brands, however, privacy isn’t just a matter of opinion. You can’t simply choose not to use data.
More and more consumers expect personalization, and the most cutting-edge marketing tactics use data to deliver a custom experience. Yet IOS and Google are operating with stricter and stricter privacy standards. E-commerce businesses need to understand the newest requirements — and what it means in terms of your ability to attribute your ad spend to channels and track conversions.
If cookies become a thing of the past, how can you prove the efficacy of your marketing efforts? Without accurate metrics, how can you lay out a successful strategy? As we move forward into a more tech-savvy and digitally-driven world, it’s almost like marketing efforts are being forced to go back in time. Here’s what you need to know — and how to ensure your e-commerce brand’s marketing efforts continue to be as effective and efficient as possible.
How Privacy Changes Affect Social Advertising
In March 2021, Apple began preventing iOS applications from using cookies to track users across platforms without explicit permission. Now Google is following suit. By 2023, the digital behemoth plans to phase out third-party cookies in the same way.
These advances in digital privacy are arguably a good thing for consumers who value online anonymity. But they impair marketers’ ability to understand who they are marketing to and where potential customers are in the purchase journey. It also affects attribution — and makes it nearly impossible to understand where ad spend is being used most effectively.
In the United States, iOS users outweigh Android users, with approximately 60% of the population favoring iPhones. Globally, Android is far more popular, making up around 72% of the operating systems in use. While Android users are still trackable for now, the way the landscape is changing means you best get ahead of what’s coming.
The truth of the matter is there’s really no innovative way to solve this problem through sophisticated software or integrations. The root of the privacy restrictions are at the phone and operating system levels. All the major social media apps, like Facebook, Pinterest, Instagram and TikTok are affected. So marketers will have to get creative to solve it.
Historically, cookies have essentially followed users around the web from app to app, tracking activities and giving you a purview into how your advertising affects their buying activities.
Without that insight, you need to rely on different sources of data.
The Challenges: How Privacy Restrictions Undermine your Social Advertising Efforts
Evolving privacy restrictions present a number of challenges to e-commerce marketers who rely on cookies in their social media marketing efforts. These restrictions affect your understanding of how your social advertising strategy is performing. It also inhibits your ability to produce effective social media marketing in the future.
The first challenge is a lack of complete attribution data. Third-party cookies allow you to track unique users as they interact with your social ads and e-commerce platforms. This data can then be used to understand how a user engages with your marketing strategies and whether they ultimately convert, or purchase something. The difficulty attributing conversions to marketing efforts means you are left in the dark about how your social ads are driving business results.
This muddies the relationship between ad spend and measuring ROI.
A clear view is pretty much impossible. Anyone who promises good third-party data is selling snake oil, because that third-party data doesn’t really exist anymore.
Retargeting and Personalization
Next, the new privacy rules lessen your ability to understand your prospects’ and customers’ journey. Personalization is always a hot topic for marketers. In the e-commerce and B2C marketing space, personalization is highly valuable to propel and nurture customers along their buying journey. Many brands rely on tracking data to tailor customer experiences through retargeting specific ads.
But retargeting is getting harder and harder as cookies fall to the wayside. Even with data and tools at their disposal, many marketers still struggle to personalize effectively. Though 71% of retailers think they are nailing it, only about 34% of consumers agree.
Without third-party cookies enabling you to create highly targeted campaigns, this gap will only feel even more insurmountable. Tracking with cookies provides visibility into the customer’s journey. Operating in the dark could lead you to inadvertently target a repeat purchaser with a top-of-funnel awareness ad. This lack of visibility leads to a messy and disjointed experience for the customer. Moving forward, the only reliable way to run retargeting campaigns is going to be with prospects who have already filled out lead-gen forms.
The bottom line: The metrics and methods you’ve relied on need an update.
The Solution: Blended Attribution Models Provide a Big-Picture View
There’s not a one-size-fits-all solution to the privacy problem. The good news? You can get a better view of your social advertising efficacy and customer journey with the data you already have access to. You just need to learn how to use it.
The sources you should start considering and connecting like a puzzle are:
First-party data is collected directly from prospects and customers via form submissions and purchases. Be it email addresses, phone numbers or zip codes, this is information that prospects and customers have willingly shared, meaning you have the right to use it in your marketing activities.
First-party data is really the only data that privacy restrictions can’t touch. Because of that, you’ll be relying heavily on it in the future. If you don’t have a robust method for collecting and analyzing first-party data, you should start now.
Platform data is collected by social media, search, and e-commerce platforms. Often, platforms inflate their own metrics. For instance, if a user encounters ads first on Instagram and later on TikTok for the same product, but then ultimately searches on Google to go directly to the site and purchase through Shopify, each platform may consider that a conversion. It depends on what attribution model the platform uses. Some platforms use “first-touch” while others use “last-touch” attribution models. The accuracy varies based on the platform’s own measurement methods.
Though privacy restrictions mean you will lose visibility into how users interact from platform to platform, these native metrics still provide a helpful benchmark for analyzing social ad spend efficacy if you can compare time periods and relate them to your other analytics.
Offline Conversion Tracking
Originally created to aid brick-and-mortar retailers in attributing social ad spend to purchases, Facebook’s offline conversions are becoming more helpful to marketers in a cookie-less era.
Offline conversions have been around for quite some time, but with recent privacy changes, the ability to upload lists of purchasers and compare that to Facebook users that have interacted with your ads is valuable to all e-commerce brands. Offline conversions offer a valuable way to track specific user journeys as cookies fade away.
Historical Data and Halo ROAS
Traditional return on ad spend (ROAS) numbers are not going to look very pretty once new privacy policies take effect. But if you have data over two years old, you can get a very solid picture of what online and offline revenue trends look like. Comparing this overall historical data to your overall digital ad spend can provide a figure called “Halo ROAS.” Referred to as “Halo” because it includes overall revenue. This includes revenue generated online or offline, and the cumulative number gives you an overall idea of your actual ROAS.
Altogether, these four sources of data form a blended attribution model that gives you a more holistic view of the health of your social advertising. While cookies used to provide value by letting you get granular into user activities, this blended attribution model still gives you the critical information you need to measure effectiveness of your e-commerce brand’s social advertising strategies, albeit at a higher level.
Support Your Ad Spend with a Strong Brand
As tracking social advertising and ad spend gets trickier, it’s important to go back to the basics. The ad men on Madison Avenue 70 years ago didn’t have cookies to help them build a strong brand.
Looking to the future, it’s more important than ever to rely on the power of your brand. Millennials and Gen Z are the most digitally immersed generations yet, but they also have high expectations for what brands are doing offline.
Understanding your prospects and customers so you can align with their values and solve their pain points gives them a reason to come back to your brand time and time again without following them around the internet.
Succeed On and Offline
Cookies are disappearing, and beyond that, we don’t have a crystal ball to tell us what’s coming next. But savvy e-commerce businesses can get and stay ahead of the curve by going back to the basics: strong first-party analytics that don’t rely on third-party data, cumulative overviews and benchmarks, and strong branding that’s finely tuned to your exact target market. We can help keep you in front of the curve as the privacy landscape changes rapidly.