2024 sees the digital advertising ecosystem undergo its largest change since inception. The two dominant companies Google and Facebook are shifting towards more privacy centric models that will have dramatic changes on digital advertising.
How did we get here?
Since the 1990s “cookies” have been used to help advertisers target consumers. These cookies enable advertisers to gather user browsing data and behaviour information, allowing advertisers to target audience segments.
These methods although offering seemingly amazing utility for advertisers are left with questionable morality attached.
The most infamous of these is the Cambridge Analytica scandal where through a psychological survey aided by Facebook’s dangerous levels of user privacy the company was able to extract data on over 87 million Americans. These profiles were then segmented into psychometric profiles that were then targeted and some credit with swinging the 2016 US election in favour of Donald Trump.
This is not an isolated incident of questionable privacy. Recently, researchers have found in a paper titled “Unique on Facebook: Formulation and Evidence of (Nano)targeting Individual Users with non-PII Data” that it is possible to target a single user using Facebook’s ad targeting tools. This, the most extreme case of microtargeting, “nanotargeting”, opens the door for potential bad actors to act nefariously.
Users are waking up to this and have become more privacy conscious. According to a November 2021 Washington Post survey, 73% of people find collection of user information unjustified, with 74% of people believing that online advertising is invasive and a breach of their privacy. This is on an increasing trend: in 2012, 59% found data collection unjustified.
Increased user pressure has caused big tech companies to start to look to shift attitudes and adopt a more privacy centric approach. This will change how advertising works for you and your start-up online.
What’s happening?
Google has announced its privacy sandbox which “aims to create web technologies that both protect people’s privacy online and give companies and developers the tools to build thriving digital businesses to keep the web open and accessible to everyone, now, and for the future.”. In short, starting later this year, they are looking to phase out third-party cookies and other tracking mechanisms. This will likely reduce the current targeting options that are available to advertisers.
Facebook is also taking steps to reduce its targeting features such as removing “Detailed Targeting options that relate to topics people may perceive as sensitive, such as options referencing causes, organisations, or public figures that relate to health, race or ethnicity, political affiliation, religion, or sexual orientation.” It is also giving users more control on what ads they see, with options to stop seeing ads from certain products and industries.
These changes are the start of what looks to be a phasing out of microtargeting.
What this means for you
Well, the current thinking in digital marketing is that targeting is king. Without detailed targeting what are we going to do? How are we going to be able to reach the desired audience segments online? That is the most important thing for campaign effectiveness—ahh!
This is where the consensus is flawed. When measuring advertising effectiveness, what matters most? According to a study by Nielsen on 500 FMCG campaigns, targeting only makes up 9% of sales outcome. Creative is still king! Advertising creative is most important with 47%, Reach with 22%, Brand 15%, Recency 5%, and Context 2%. Investment in creative becomes more important as targeting options decrease. Strong creative becomes the main priority for brands to succeed in the next phase of digital advertising.
How to create effective advertising creative
We used to think of ourselves as a rational species. We made decisions based on logic and reason. Then came behavioural science. We now know that people make decisions through heuristics and cognitive biases — learn them. These decisions occur in all areas of our lives. However, they are especially important for us advertisers as they enable us to use persuasion to help grow brands that matter. It’s important to keep the messaging simple —people are unable to recall multiple claims. Make the brand front and centre. As mentioned in the previous Nielsen study, Brand is 15% of sales outcome, so grow it.
Now depending on your industry and the stage of your business, advertising might not be right for you at this stage. Advertising without brand strategy could be money wasted. I’ve worked with numerous start-ups from seed to exit, and the priority is a strong brand. Branding runs throughout your business in everything that you do, from HR to social media. It defines the type of person you want to hire and creates the customer that you want for life.
Bring on 2024!
We’ve all had a rough couple of years. If you are a start-up owner or digital marketer, the “death of the third-party cookie” could seem like a daunting start to 2024. According to HubSpot, almost half of marketers are predicting that they will need to increase their spending by up to 25%, and 23% of marketing experts plan on placing more time and investment in email marketing. It doesn’t have to be all doom and gloom.
These changes hopefully help us to improve society, create fairer elections and make people a bit less freaked out by tech. Also, spending time on the fun stuff like creative rather than in a python snake pit could just help your business as well as your mind!
