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Privacy Updates: How Can Brands Navigate the Advertising Challenges and What Does This Mean for Influencers?

Ever since the 2018 Cambridge Analytica scandal, data privacy in advertising has been a top talking point for business leaders, policy makers and consumers.  The political data-analysis firm was accused of surreptitiously storing the data of 50 million Facebook users without authorization and using it to send targeted ads promoting in the 2016 election campaign. It led to Facebook’s CEO Mark Zuckerberg testifying to Congress and a $5 billion fine for the social media platform.

And so it may come as little surprise to many that just three years on, Apple has now launched a new update allowing users of iPhones and iPads to say no to their data being collected by apps. This new update has, understandably, angered Facebook and other social media platforms as user data presents hugely profitable advertising opportunities. Whilst it will be pleasing to many, Facebook has warned that the update could easily cut the money earned through its ad network by half, hitting small businesses the hardest and it also argues that sharing data with advertisers is key to giving users “better experiences”.

Contrastingly to Facebook, Apple has little to no interest in its customers’ data because it makes money from selling devices and in-app purchases, rather than from advertising. Apple has always marketed itself as a privacy-first company. In 2010, co-founder Steve Jobs acknowledged that some people didn’t care about how much data they shared, but said they should always be informed of how it was being used. “Privacy means people know what they’re signing up for, in plain English and repeatedly… ask them, ask them every time,” he said. 

E-commerce

Accelerated by the effects of the pandemic on consumer behavior, e-commerce grew massively, accounting for 16% of sales in the US in Q2 2020. Although e-commerce undeniably fills gaps in the market, it does expose consumers to having their information hacked and stolen. 

Data access and sharing comes with several risks to individuals and organisations. These include the risks of confidentiality and privacy breaches as well as the violation of other legitimate private interests, such as commercial interests.

Apple wants its users to have the right to decide how their data is used as “no piece of information is too private or personal to be surveilled, monetized, and aggregated into a 360-degree view of your life” by some businesses. Surveys suggest, and Facebook acknowledges, that up to 80% of its users will say no to having their data shared when prompted by Apple’s new updated software.

The Generational Divide

It isn’t all bad news. Around 25% of young adults feel comfortable sharing personal data with social media companies compared to only 8% of adults aged 45-54. It is likely that this is because it enhances their user experience, making their content feeds more relevant and personalized. The younger generation has grown up with social media platforms meaning they commonly use it as an online shopping tool. They also rely on discovery pages – which are powered by data sharing – to help them find new, lesser-known brands to shop from.

Unsurprisingly, Apple’s new privacy setting becomes more problematic for brands that target consumers who are more skeptical of data sharing. 

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Native Advertising

One way brands can navigate around Apple’s privacy update is by exploring native advertising which is a form of targeted advertising for advertisements appearing on websites or other media, such as content displayed in mobile browsers. This would involve brand’s placing ads on particular webpages that align with the content of the webpage or the audience demographic. 

For example, a user may be looking at a picture of a dress from ASOS and adverts could be placed on it from other clothing brands such as Pretty Little Thing or Motel Rocks. Engaging in contextual advertising means brands are able to build a targeted advertising strategy that’s based on relevance rather than data. 

The Role of Influencers in a Cookieless World

Engaging in influencer marketing is another alternative advertising channel. With influencer marketing, brands don’t need to use data for targeting, as the consumer has chosen to view the content and is invested in the creator behind it. This increases engagement in the content and heightens the opportunity for brands to influence consumer purchasing behavior.

As a result, influencer marketing has grown in popularity. Marketers and influencers in the UK, US and Germany, and discovered that three-quarters of brands have upped their influencer spend despite the pandemic. 2020 saw increasing confidence in the market, with a spending splurge which saw 73% of marketers throw more resources at influencer marketing – and particularly in the retail (79%), legal (79%) and manufacturing (75%) sectors. This comes as brands begin to work with influencers across more mainstream channels, such as OOH (83.3%), print (80%) and TV and radio (81.3%), as they become more confident in their ability to deliver ROI.

At various key touchpoints along the purchasing funnel, influencer marketing can offer brands an effective communication tool to engage consumers directly: from brand awareness objectives to lead generation targets. Added to this, influencer marketing also gives brands access to real-time feedback from consumers via the creator’s followers and the comments they share online. These opinions provide brands with valuable consumer insight and feedback which can be used to inform future brand strategies.

How Contextual 2.0 Will Drive The Next Phase of Digital Targeting

The reality is that data privacy protection for consumers has been a long time coming and represents a positive step for the industry towards a more ethical future. The Cambridge Analytica scandal opened the public’s eyes to the scale of the misuse of their online data profile, and now social media platforms must adapt their offering to be successful in a very different data landscape. And brands too must change their approach. No longer can they rely on data alone to reach their target audiences. Instead, they must diversify their marketing strategy to incorporate new channels that don’t require data in order to remain competitive.

[To share your insights, please write to us at sghosh@martechseries.com]

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