Data-driven marketing, disrupted: explore The Drum’s Data & Privacy Deep Dive

But how did we get here? And what‘s the crux of the issue? Let‘s back up.

Since the late 20th century, information about internet users’ online behavior has served as fodder for brands keen on learning how to more effectively connect with and influence their target audiences. In fact, in 1993, when the open internet encompassed only around 600 websites, Webtrends launched as the first web analytics platforms, providing visitors with insights about internet users’ online habits.

In the decades since, user data has become the ultimate asset – something like virtual gold – in our digital world (well, actually, perhaps less like gold and more like a Birkin bag – which it’s worth noting Hermès does not want digitally replicated). Consumer data is the beating heart of the digital advertising ecosystem – which itself is the backbone of the open internet, funding publisher sites and ultimately ensuring that most information online remains freely accessible to everyday users.

But now, many advertisers scraping that data – primarily through the use of third-party cookies, tracking pixels and other user-identifying signals such as Android’s Google Advertiser ID – feel like they’re holding a ticking time bomb.

And, well, they kind of are. That’s because in the era of social media, where users are bombarded with hyper-targeted ads at every turn, consumers have become more knowledgeable about how their personal information is being collected and used. They‘ve realized that advertisers can often access information as personal as real-time geolocation data, sensitive demographic details and more – and it has given them the heebie-jeebies. So they’ve demanded greater transparency from online platforms and advertisers and called for increased control over how and when their information is used.

In response, policymakers from across the globe have slowly but steadily begun to roll out legislation that aims to limit advertisers’ ability to gather, store, sell and use consumer data without individual users’ consent. The EU’s sweeping General Data Protection Regulation (GDPR), adopted in 2016, was the first domino. Now, countries from Australia and Brazil to China and Saudi Arabia have passed similar comprehensive consumer privacy laws.

The US has seen a handful of GDPR-like bills sprout up on the state level, with five new laws going into effect this year. In Washington, a federal-level privacy bill with bipartisan support last year came closer than the US has ever been to passing a nationwide privacy law.

The UK, having deviated from GDPR last year, is working toward implementing new privacy legislation. The EU last year began enforcing a flurry of new regulations, including the Digital Services Act and the Digital Markets Act, which create more stringent rules for platforms, including new privacy measures.

Enforcement is ramping up too, with European regulators doling out historic fines against Amazon, Instagram, Google and others for violating privacy regulations and the US’s Federal Trade Commission announcing plans to “crackdown on commercial surveillance and lax data security practices.” Just last week, the US agency said it aims to issue a wholesale ban on Meta’s use of children’s data.

Under the watchful eyes of regulators, the tech titans who rule the data landscape have taken it upon themselves to roll out privacy-conscious policies and tools. Most influential is Google’s decision to eliminate third-party cookies in Chrome in 2024 (a decision that’s been twice delayed).

Apple, for its part, cut off access to major streams of data that many developers and advertisers had come to rely on when it debuted its AppTrackingTransparency feature in 2021; the tool gives users the option to choose which apps can track them across other apps and areas of the web. The move essentially meant that user-level identifiers would no longer be automatically available to advertisers within Apple’s ecosystem.

Recognizing that the tactics they’ve long depended on are being cut off one by one, advertisers are now trying to step away from the ticking time bomb.

But even if they relinquish their habits of stalking users across the internet, they can’t undo history. At this point, consumer data is core to the modern advertiser’s business model, and there’s no going back. For brands, it’s needed to understand audiences, deliver relevant messages that resonate with those audiences and assess the impact of these efforts. It’s a key element of business success. In fact, some 34% of chief marketing officers are either extremely or moderately concerned about changes in the data privacy space negatively impacting revenue, according to exclusive research for The Drum powered by iResearch Services.

So a new riddle arises: how can advertisers tap into the power of consumer data while honoring consumer choice, respecting privacy and providing transparency?

It’s a riddle that’s demanding the attention of players across the ecosystem, but is especially pertinent in adtech where the big tech players like Google and Apple are going head-to-head with smaller firms racing to build privacy-preserving data solutions for marketers.

Their strategies are varied: machine learning is being deployed to supercharge contextual advertising – an approach that targets ads based on the content of a webpage; labs like Google’s Privacy Sandbox are experimenting with data-driven approaches to targeting that anonymize users within groups; industry leaders are building more privacy-focused cookie-like ID solutions designed for operability across channels; data clean rooms, where personal identifiable information is masked, are helping marketers access consumer data in privacy-safe ways; and, of course, AI is increasingly coming into the mix.

As tech leaders work toward new solutions that could help marketers continue collecting and using third-party data, marketers are conscious that the clock is ticking on third-party cookies. So in the meantime, they’re increasingly focused on building up their stocks of zero- and first-party data. They’re finding innovative ways of incentivizing consumers to share their data willingly – with tactics as far-flung as QR code Super Bowl ads and promising free beer in exchange for an email address.

Beyond the privacy wars, marketers are running into other data dilemmas. A key issue: measuring campaign performance – particularly outside of traditional digital channels.

In the worlds of linear and connected television, marketers are struggling to evaluate media performance across a fragmented ecosystem consisting of different device makers, streaming platforms and currencies. Players like Nielsen and NBCUniversal are pushing to develop universal solutions that can deliver precise and accurate data insights in any TV or video environment.

Out-of-home (OOH) and digital out-of-home (DOOH) media, too, have long faced issues of measurement precision, although innovations in programmatic buying are helping to remedy these problems.

And, of course, external factors like economic uncertainty and the boom of generative AI and decentralized web3 technologies are throwing more wrenches into the works for advertisers looking to navigate the complex world of data-driven decision-making.

It’s a big, wild world out there.

We’re here to help explain it, unpack its implications and empower you to make better decisions. For the next week, as part of The Drum’s 2023 Data and Privacy Deep Dive, we’ll publish breaking news, features, opinion pieces, exclusive research and in-depth analysis that seek to explain the new data and privacy paradigm.

Key topics we’ll explore include:

• Ways in which AI-generated 'synthetic data' could help address some of marketers' privacy problems

• How top agencies are helping their clients navigate the privacy minefield

• How marketers are adapting to data localization rules like those found in China’s privacy law

• Preparing for the sunsetting of Google’s Universal Analytics platform and the forthcoming rollout of Google Analytics 4

• The growing issue of children’s and teens’ data privacy in the age of TikTok

• How historically ‘data-poor’ CPG brands are building up their stores of first-party data

• Why some believe Apple’s privacy-focused brand messaging is a sham

• The role of retail media networks in the privacy-centric future of advertising

• The potential benefits – and pitfalls – of AI regulation for marketers

• And much more

What are you waiting for? Dive in now.

To read more from The Drum’s latest Deep Dive, where we’ll be demystifying data & privacy for marketers in 2023, head over to our special hub.