Why advertising’s privacy crackdown is good for marketers

The race to create cookie-free marketing strategies began years ago and it’s heating up fast. AI might be key to unlocking the balance between consent and conversion

Acceleration Image

The recent boardroom shambles at ChatGPT owner OpenAI highlighted the chaos that ensues when leaders don’t sing from the same business transformation songbook. 

Following its sharp rise, this apparent lack of direction seemed especially out of place for an organisation at the forefront of an uncertain, tech-driven future. Nevertheless, the farrago highlighted the need for businesses to put a clear plan in place for AI-enabled media transformations. 

Marketing is one sector that is gearing up for major changes. As the third-party cookie crumbles and regulators tighten rules around personal data usage, CMOs are searching for new ways to connect with customers. Strong developments in artificial intelligence and machine learning over the past year have provided cause for optimism, offering businesses the potential to drive stronger business performance through their investment while keeping compliant in a privacy-first digital ecosystem. 

So, how can this greater emphasis on first-party data sources and consent lead to more effective marketing investment? And what steps should organisations take to deploy their own AI-enabled media transformation? 

Lucia Mastromauro, managing director at Acceleration, WPP’s data and technology consultancy, believes that ad tech and its application to media performance are “going through an existential phase.” She describes a marketing paradigm shifting away from reliance on third-party cookies and tracking individuals across the internet. Instead, this new landscape thrives on data, predictive analytics, and the integration of AI. 

“For the first time, advertisers can leverage and give life to the breadth of consumer and trend data available in their organisation,” says Mastromauro. This applies even to brands that don’t have direct access to first-party data based on transactions. Consumer packaged goods companies, for example, may not have information at the individual level but can aggregate “based on footfall, appointments available, or the number of items purchased in different retailers,” she explains. 

Specsavers recently worked with Acceleration on three key objectives: to future-proof its audience measurement, enhance the allocation of media budgets across digital touchpoints and drive efficient online appointment bookings in real time. This meant developing an algorithm to optimise spending based on store-level capacity and introducing models for real-time assessment of media performance without relying on cookie-level data. Specsavers’ updated approach resulted in a 15% increase in online bookings and a 16% drop in cost per customer acquisition. 

Technology is also helping brands navigate the difficult balancing act of respecting people’s privacy while providing them with a clear value exchange to encourage data sharing. Research shows that this is a hard task to accomplish. According to Boston Consulting Group, two-thirds of customers want ads that are personalised and match their interests, yet nearly half (45%) are uncomfortable with sharing their data to create tailored marketing content - quite the catch-22. 

Innovation will be central to creating engaging, relevant content without compromising trust. In the automotive sector, Volvo partnered with Acceleration to increase understanding of customer journeys and optimise creative performance with AI. Most importantly, they managed this while respecting consumers’ privacy. The business predicted the future performance of its video advertising campaigns, building a strong understanding of the factors behind creative excellence in the process through analytics. This use of data and insight to enable strategic decisions continues to carry its weight in the business, having delivered 10% incremental revenue for the brand. Mastromauro says: “The beauty for large brands is that they can build bespoke solutions which leverage the uniqueness of their data while keeping it housed within their own company walls.” 

In addition to meeting customer expectations, marketers face the challenge of complying with data regulations, including Europe’s General Data Protection Regulation (GDPR), introduced in 2018. Non-compliance can result in some eye-watering fines. Notably, Meta was handed a €1.2 billion bill back in May. 

Before you can fully make an impact using data analytics and data science, you have to take a good look at your organisation, where your data sits, and how accessible that data really is

That said, this isn’t necessarily bad news for CMOs. Mastromauro contends that by pushing businesses out of their comfort zones, GDPR has “forced the hand of many industries to have to innovate” with clear practices on data compliance in mind. This innovation will benefit advertisers as new analytics tools and solutions come to market. She notes that businesses ought to be prepared for the new normal: “Without well-structured data, organisations won’t be feeding reasonable inputs into their AI solutions to bring value for the business.” 

To ensure a smooth transition, Mastromauro advocates a clear framework for businesses embarking on AI-enabled media transformation. This “guided journey” involves several steps. First is the discovery and assessment of current data, which allows organisations to pinpoint opportunities and define their ambitions for future use of AI. Then, marketers must prioritise activities based on business value and the relative difficulty and investment involved. A clear implementation plan with definite steps, she adds, is the final piece of the puzzle. 

“The real message is that before you can fully make an impact using data analytics and data science, you have to take a good look at your organisation, where your data sits, and how accessible that data really is,” Mastromauro says. 

Predictive analytics and artificial intelligence generally require aggregated data in large volumes to identify the necessary correlations that drive better performance. What businesses need then is to “brutally interrogate the organisation” to understand the full range of accessible data. 

Finding the best and most appropriate talent to drive change with agility and speed may sound like a challenge. However, the pool of expertise is deeper than businesses might expect. “The best data scientists are gravitating towards advertising and the cloud is redefining how data in businesses is being consumed,” Mastromauro points out. 

Working hand-in-hand with senior marketers, these experts can empower organisations to develop a seamless flow between marketing strategies, data, privacy practices, and tech investments. Future-facing businesses understand that far from witnessing the demise of data-powered marketing, the industry is entering a new era of cloud-based, AI-driven innovation fit for a privacy-first media landscape. It’s time, then, for CMOs to start on a robust and transparent transformation plan.

For more information, visit acceleration.biz