The End Of Third-Party Data — Finally
This article was originally posted in Forbes, on Oct 1, 2020.
By Mike Perrone, CEO, SocialSign-in Inc, helping enterprises leverage guest Wi-Fi as a powerful marketing channel.
By now, most marketers are aware of the inevitable changes coming in the near future to iOS 14, Apple's latest update in privacy initiatives to protect consumer data, most notably requiring user notification and consent before having data collected. Additionally, by restricting the availability of a user’s IDFA, iOS 14 limits the ability of marketers to easily identify users for remarketing and attribution. Apple assigns an identifier for advertisers (IDFA) randomly to each of its devices. Currently, marketers can use it to track data for customized advertising (i.e., personalized ads). This update will restrict the use of the IDFA to users who have expressly given permission, essentially eliminating a substantial source of third-party data.
This has caused advertisers, most notably Facebook, to push back heavily on these changes. Apple rolled out a similar restriction on behavior tracking for its browser, Safari, in 2017, with an equivalent reaction from the advertising industry. According to Claravine, "Third-party cookies are essentially dead now that Google has announced its intention to phase out cross-site tracking (via third-party cookies) in Chrome browsers by 2022." At their core, what these updates try to address is taking control of personal data away from the industry and putting the user in control of who collects data about their behavior and how that data can be used.
This latest update, then, is an unsurprising development when considering the trajectory of privacy and digital data rights over the last few years, starting with the CAN-SPAM Act of 2003. Data sources such as geolocation data, presence analytics and ad tracking sources have become less reliable and less valuable data sources over time. I actually predicted (paywall) the death of "gray-area" geolocation data in 2014 in Fortune magazine. As I noted then, I thought that it would eventually be legislated out of existence.
In many ways, legislation is driving these changes, not customer behaviors and preferences, which should be the driving force — and marketers are consistently lagging.The General Data Protection Regulation (GDPR), Europe's solution to data privacy and security, was the first broad-based initiative companies faced, and initially, many websites simply blocked EU residents rather than proactively addressing GDPR concerns, and then scrambled to be in compliance. California followed suit with the California Consumer Privacy Act (CCPA), the most comprehensive data privacy laws in the United States. It is simply a matter of time before these laws are enacted broadly in the U.S. Third-party data will be so restricted — if not nonexistent — that it may as well be useless.
The types of data sources that will require user permission from Apple are comprehensive and far-reaching, and it's about time. For years, customers have been demanding control of their personal data and a pivot to relationship or personalized marketing, which cultivates deeper, more meaningful relationships to ensure long-term association and an enhanced customer experience. Cultivating these types of relationships necessitates permission to contact, in essence demanding direct relationships.
Most commentary on iOS14 for marketers seems to feel the best strategy is circumvention, such as asking users to turn off these features, developing probabilistic attribution models or simply doing nothing. So what should marketers actually do? Embrace these changes now.
The first step is risk assessment. How much of your data still comes from these third-party sources of data? Strategize on how to best obtain or augment first-party sources of data. Most users are willing to trade personal data for value, whether that is a well-designed app, guest Wi-Fi access in a store or venue or offering premium content to website users. As I see it, forward-thinking organizations realize that it’s time to take total control of their first-party data, own their customer relationships and ditch third-party data to the trash heap.
Solutions & Options
First-Party Data