What will happen to brands in this decade of data-privacy first advertising?

In 2020, the pandemic transformed every consumer’s life and accelerated the adaption of digital. eMarketer estimates that worldwide retail e-commerce sales grew 27.6% in 2020, for a total of USD$4.28 trillion.

With people spending more time online, banking online, and shopping online, rapid digital adaptation has also pushed the largest technology/internet companies to take action on self-regulating their data privacy issues. Starting from Google pursuing plans to remove third-party cookies by 2022, to Apple’s announcement last week on an iOS 14 beta-update that gives users the choice to block the identifiers for advertisers (IDFA) on an app level. According to a Tap Research Inc survey, 63% of iOS users are extremely unlikely to allow apps they use regularly to track them.

So, what will happen to brands?

Today, most brands in Hong Kong still fully rely on third-party data platforms, i.e. Google, Facebook and other ad networks, to push personalised ad content to their target consumers. However, this is not sustainable as third-party platforms begin to regulate data use. Brands must strike a balance between leveraging third-party data for ad targeting and building their own first-party database for long-term marketing success.

For brands to reduce their dependency on third-party ad platforms to drive traffic and sales conversions, a brand will need to build a solid digital infrastructure. Internally, the management team, sales team, marketing team & I.T solution team will need to work closely together to design a digital consumer journey that can effectively consolidate & deploy data for ad targeting usage and drive towards their business goals.

To unlock the full potential of their digital infrastructure, brands need to effectively collect, integrate and optimise this first-party data. This mean brands will need to strengthen their brand awareness and top of mind within their business category, to enable healthy organic engagement from consumers, to nurture and grow their first-party database along with their business.

Today’s consumers expect transparency, choice and control on the social media and app platforms they use; while brands advertisers expect to get the ROI numbers to reflect the value they get from the social media and app platforms they advertised on. In the coming months, it is expected that more platforms will roll-out their versions of privacy updates.

For the time being, take a look at Apple’s breakdown on the common ad tracking and targeting practices in our day-to-day mobile usage.

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