March 29, 2023 | 7 min read
This article was written by Jason Hartley. As Head of Search and Shopping, Jason oversees PMG’s holistic approach to search across their client portfolio. A senior member of PMG’s Center of Excellence (COEs), he consults on media strategies across clients like Nike and Gap brands. He also leads PMG’s holistic approach to privacy. Alongside his work at PMG, Jason is a member of the Google Performance Council and ANA Ethics Policy Committee.
This article was originally published on The Drum.
The move toward greater consumer privacy controls has been years in the making, yet many questions still loom for advertisers seeking to take concrete steps toward a privacy-first future. Particularly in the U.S., it’s difficult to know what those concrete steps should be, as Congress has yet to agree on federal consumer privacy legislation, leaving states to create their own laws. Not to mention that the major social and digital platforms have taken their own unique approaches to mitigate the effects of signal loss. As a result, advertisers are addressing the same complexities multiple times over, shapeshifting campaigns and digital programs into compliance across state lines and various platforms.
Given these overlapping dynamics, universal compliance is difficult and expensive. Advertisers are tasked to embrace data minimization (collecting only the information necessary to function) while still finding ways to connect with audiences without sacrificing performance. While this situation is ever-evolving, it is manageable if you understand what’s happening at the state level and commit to building campaigns in a way that drives performance while protecting people’s online privacy.
California has led the way in the U.S. with CCPA/CPRA, but four other states have enacted comprehensive privacy laws set to go into effect by the end of 2023. A fifth state, Iowa, just passed its version of a consumer privacy law. Ensuring that your brand complies with these laws should be a top priority, as failing to do so could result in fines and reputational harm.
“Advertisers are addressing the same complexities multiple times over, shapeshifting campaigns and digital programs into compliance across state lines and various platforms.”
A people-first approach to consumer privacy is always advisable, but it’s now mission-critical as people demand increasingly greater protections while still expecting a personalized online experience. Making consumer privacy protection core to your brand’s values will build trust with customers and help guide decision-making amid regulatory uncertainty. The higher a brand’s privacy standards, the more likely it is that those policies will meet legal thresholds.
Still, it’s helpful to understand what those legal thresholds are likely to be, and that’s where the news is more encouraging. Even though a federal bill isn’t on the docket for this year, there could be significant uniformity seen across new state laws. The International Association of Privacy Professionals (IAPP) recently reported that a new trend has emerged. States that have recently passed legislation or are working on their own consumer privacy bills are relying on existing laws as their legal foundation and then adjusting the specifics to best suit the needs of their constituents.
For example, Iowa’s new law shares the same basic framework seen across consumer privacy laws in Colorado, Connecticut, Utah, and Virginia. This is quite encouraging for advertisers. If the laws are largely similar, compliance will be easier, less expensive, and more conducive to innovation.
However, it’s important to note that while a bill can oftentimes seem ‘dead,’ it can spring back to life as political opinion sways, so a federal consumer privacy law could emerge from Capitol Hill when we least expect it.
Although it’s unclear how privacy legislation will play out at the federal level, brands should still proactively prepare for the future. I’d argue that this short-term volatility presents an opportunity for brands that can cut through the noise and methodically focus on long-term solutions rather than being overly reactive—or even inactive—in the face of uncertainty.
In other words, the art of future-proofing for consumer privacy requires a holistic approach. In practice, this can include an assessment of your current level of dependency on cookies, evaluating cookieless targeting solutions (such as contextual, cohorts, IDs, and hybrid models), experimenting with broader audience targeting across social channels, and testing into products like Google’s Performance Max that tap into new AI-enabled opportunities.
On the data side, it’s widely known that first-party data will be essential to navigating the privacy-first advertising landscape. Still, it’s also critically important that you’re getting accurate data, so brands will need to deploy durable tagging and API integrations, which could include a closer investigation into whether data clean rooms are right for your business. Lastly, measuring the effects of these changes requires new techniques, such as adopting a calibrated blend of attribution and media mix modeling (MMM).
These efforts can be further supplemented by implementing or accelerating an incrementality testing agenda through a prioritized sequence of experiments, utilizing durable methodologies (such as matched market testing), and assessing the fidelity of in-platform testing.
The future of advertising will be more private, more regulated, and more challenging to navigate. But the answer to this charge will not be found in circumventing privacy-led changes but by employing a comprehensive and values-driven solution that’s sustainable regardless of any new laws or platform policy shifts in the U.S. and beyond.