Will digital marketing survive the new era of privacy?
It all began in 2020 when Apple updated its iOS 14 software, allowing users to opt out of activity tracking through the apps they use and the websites they visit.
In that same year, Apple's Safari browser blocked cookies. Google, whose Chrome holds as much as 65% of the global internet browser market share, is reportedly planning to do the same.
A year later, Apple mandated developers of its apps to seek users' permission to collect data within each app, dealing another direct blow to targeted advertising, which is, in some ways, the essence of digital marketing.
The evidence supporting these decisions, even when viewed from the user's perspective, was provided by a McKinsey survey. It revealed that 41% of respondents would block cookies and prevent their activities from being tracked if given the choice. And we cannot disregard the wishes of the people we aim to reach, can we? Of course, many websites have found a workaround in this system by accepting third-party cookies that are mandatory to access the site's content. However, if site owners invest time and effort in providing extremely high-quality content or offers, site visitors will have no choice but to accept "cookies" that will likely be used for remarketing later.
As a result of these technological and privacy policy changes, not only has the effectiveness of advertising decreased, but its costs have also increased. In 2022, brands spent at least three times more money to reach their target audience compared to 2013 ($29 vs. $9). The amount of money invested in digital marketing on Meta platforms increased by 39%, and on TikTok, it rose by as much as 70%. To improve results in every performance marketing metric, it's crucial to know what steps need to be taken next. Until now, agencies advised companies to invest more money, given that clicks became more expensive due to Facebook Ads' overly broad targeting after the removal of interests from detailed targeting.
From now on, the advice must be either to stop investing or to invest to a certain extent. In this situation, agencies with experts in content creation within their digital sectors will thrive. They will be able to advise their clients to redirect budgets toward longer-term changes.
As Bill Gates would say, "Content is King"
Apparently, another golden era of advertising lies ahead, reminiscent of the period from the sixties to the eighties of the last century. Due to the need to stand out in a sea of competition, brands will have to commit seriously to creating quality, relevant, and creative content.
However, in today's digital age, one should be more thoughtful. The Internet demands a faster pace and a wider range of media. What currently works for us is the ability to publish the same video on several different social networks to expand the audience and enhance the effectiveness of our campaign. It's recommended that a digital campaign last for two to three weeks because, after that, the impact may decrease or even vanish due to repeated views. The quest for highlighting and positioning will widen further, reaching out to influencers, content creators, and individuals influential for the brand in general. However, these influencers are often not sufficiently educated to convey the brand experience correctly, leading us back to the age-old problem — everything appears as an advertisement. This shift has pushed brands to adopt a different approach: turning content creators into company employees.
If predictions are to be believed, we can also anticipate a future where marketing media will strengthen, presenting brands to an entirely different audience in a completely different manner.
Adapting to Changes and the Target Group
Considering the limitations in data collection and thus achieving desired results, marketing budgets are shifting toward alternative channels. Among these, the most popular are retail media networks, with predictions indicating that by 2026, as much as $100 billion will be invested in them.
In addition to advertising through websites, applications, mailing lists, and points of sale, brands are also exploring more "abstract" avenues, such as the metaverse, where the potential audience is growing and highly engaged. We are eagerly anticipating Web3 and all its promised possibilities. Artificial intelligence is also poised to revolutionize digital marketing. Targeting will likely boil down to the best possible lookalike audience generated by AI. However, the initial phase will be unfamiliar to companies and will demand extra patience, which many lack today. Those who can endure a lower Return on Advertising Spend (ROAS) in the beginning will succeed in bringing profitability to the envisioned level.
The highest ROI will come from customers who are at the very bottom of the sales funnel and have strong purchase intent, as well as those who provide the opportunity to create a direct customer relationship. They should be offered value and utility, such as by rewarding them with exclusive access to limited products or experiences, which further strengthens their affinity for the brand itself.
Community is more important than ever
With the purchase, the brand's work is not finished - now comes the building and maintenance of relationships with customers so that the purchase will continue in the future. In order to provide them with the best possible experience, brands need to have certain data about their consumers. However, as research has shown, more than half of them are more willing to share various information about themselves if they will receive something in return - personalized recommendations, advice, or discounts.
Having this kind of information can also help with the development of new products - if we know that our customers are interested in something that we don't yet offer, why wouldn't we offer it to them? However, keep in mind that rewarding trust is important, but it's even more important not to break that trust - make sure you protect all the data you own!
User-generated content will probably contribute the most to the growth of the community around the brand - people like to see real people and their honest recommendations, experiences, and reviews. The focus of brands in the future should also be on that.
Agile marketing as a new way of working
Changes will continue to happen, and it's up to brands to adapt. One of the ways to do this is to apply the principles of agile marketing and gather multifunctional teams (marketing, product, brand, sales, and analytics) that will monitor market developments and react accordingly.
It is also important to invest in technology, in systems for collecting, storing, and protecting data, and in centralized control panels for monitoring the impact of the campaign - having the right information leads to making the right decisions.
Text written for the Netokracija website by: Stefan Arsić, Performance Marketing Specialist, Smartpoint Adria
Photo: Unsplash