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For years, advertisers have relied on cross-app tracking to reach consumers, but with Google deciding to ban cross-app tracking on Android and removing the Android tracking ID, they’re going to need to develop new approaches to data collection.
The ban on cross-app tracking on Android means that the cost of user acquisition will increase as advertisers have to build new, less-efficient targeting strategies to reach users on mobile devices. It also means that enterprises and decision makers will need to rethink how they gather from their target audience.
Google’s announcement comes over a year after Apple announced that app developers would need to ask for permission to track a user’s IDFA identifier on iOS, and months after Google Chrome announced that it would be banning all third-party cookies in 2023.
Across the board, there is a growing war on cross-app tracking and third-party advertising, as providers like Google and Apple seek to stop advertisers collecting data from personal users.
The answer? First-party data
As providers crack down on third-party advertising, it’s becoming increasingly clear that first-party data collection is the only future-proof alternative that enterprises have at their disposal to collect insights on customers without being reliant on another organization.
There is a wave of providers like Perion and Tapestri building solutions to consistently gather first party data, with the former offering a platform called Intelligent HUB, which is designed to pull signals from users across all channels, and helped the company generate up to $158.0 million last year.
“The profiling of user behavior has long been the fuel of digital advertising. Even though Google has said they will wait two years for full implementation, that is a very short fuse for tech companies who rely on the ability to track and monetise user behavior. There’s no doubt that we are at the cusp of a privacy revolution that will shake the foundations of the digital ecosystem,” said Doron Gerstel, CEO of Perion.
“Clearly there will be a need to find efficient sources of traffic on the open web and elsewhere. First-party and zero-party data will become even more important. The Coinbase commercial on the Super Bowl demonstrates how the once-dismissed QR code can generate 1P data that bypasses the need for Google and Apple,” Gerstel said.
While transitioning from third party data to first party data will prove challenging for organizations reliant on collecting data from third parties, in the long-term it will significantly increase the quality of the data they gather, and enable decision makers to develop more sophisticated insights.
Challenges on the road ahead
Until enterprises find a way to collect first party data from their users, any personalized experiences they’ve created will be under threat, at least temporarily.
With 75% of consumers are more likely to buy from brands offering personalized online experience, and 62% of organizations are using cookies-based historical data to personalize experiences, many organizations will need to rethink how they deliver tailored-experiences to users.
“The Apple and proposed Google changes had a major impact on personalisation and this portends to a decreased user experience. Users are increasingly fickle and have come to expect a seamless experience. We should definitely follow the examples of companies like Netflix, Tik Tok, Amazon, and Facebook that have mastered the art of UX optimization,” said Tom Bullock, CRO at Tapestri.
Tapestri Inc. Inc., has aimed to address the challenge of collecting first party data by developing a mobile application that pays users for sharing their anonymous location data with other organizations.
According to Bullock, the next step for enterprises to sell ads personalized user’s interests is to opt for a “walled garden approach” and increase the scale of first party data collection.
Crucially, that means developing a commercially viable alternative ID, creating privacy sensitive platforms where consumers are rewarded for sharing data, and using blockchain technology to control what data is collected and who has access to it.