Marketers need to evaluate their approach to personalized advertising and adjust data collection and targeting tactics to move toward first-party data strategies.

Marketing pundits shared those action steps with CMSWire after Google last week abandoned its third-party cookies alternative plans, the open-source Privacy Sandbox known as “Federated Learning of Cohorts,” or FLoC. The replacement is Topics, which Google calls “a new Privacy Sandbox proposal for interest-based advertising.” 

“The message for Google — and the larger marketing community — is clear: consumers value data privacy,” said Wayne Coburn, director of product at Iterable. “Luckily for marketers, the path forward is logical, effective and obvious. Zero- and first-party data — data a consumer wants a brand to have — is the fuel powering forward a greener future for marketing.”

Move Toward First-Party Data Strategies

Google’s introduction of Topics brings similar uncertainty and questions to FLoC, according to Scott Sullivan, CRO at Adswerve.

However, Sullivan added, the priority for marketers remains the same: adjust your data collection and targeting tactics to move toward first-party data strategies.

“Advertisers have the time to focus on privacy-first strategies and first-party data analysis to develop a deeper understanding of their consumers and work toward a future without third-party cookies, while the industry awaits further information on Topics,” Sullivan said.

Marketers can look to first- and zero-party data to satisfy customer demands for personalization and privacy, Coburn added. Marketing strategies and campaigns built around consumer preferences and predictions will always outperform campaigns constructed on third-party data.

“Trust built now will mature over time, yielding access to customer data of increased quantity and quality,” Coburn said. “And more data, as marketers know, means more opportunities to engage, and higher returns on marketing spend.”

Related Article: Why Did Google Drop FLoC for Topics and What's the Marketing Impact?

Update Your Data, Consent Management Policies

This preparation should also include making sure you have up-to-date, clear and transparent policies on how you collect, use and share data, Sullivan said. Implement (or change) preference and consent management processes. Re-evaluate your marketing stack and build modeling capabilities to creatively extract new insights.

“Google’s transition to Topics reflects the company’s ongoing updates to its services to better align with consumer privacy needs,” Sullivan said. “As the newest update to Google’s Privacy Sandbox, the goal of Topics is for Google to enable interest-based advertising.”

Topics grants the ability for users to be a bit more anonymous, with only 350 potential topic categories, which is in direct response to the feedback Google received with FLoC, Sullivan added.

“It’s clear that consumers are eager for a more transparent, two-way relationship with brands,” he said. “But it remains to be seen how flexible it is for users to opt out and select the Topics categories that they want to be part of.”

Reevaluate Personalized Advertising Content Programs

Marketers need to evaluate their current approaches to personalized ad content, according to Krystal Tang, senior manager of solutions at Uberall.

“The broad Topic categories, while good for protecting user privacy, do make it more difficult for advertisers to use fine-grained data for personalization purposes,” she said.

Learning Opportunities

Marketers should audit their ad-targeting approaches, and as the list of Topics becomes available, begin to find solutions for how to leverage Topics to achieve similar goals, Tang added.

“There may be opportunities for contextually relevant ads to a wider audience, which can be very effective,” Tang said.

Tang said she sees a much stronger reception for locally-targeted ads that are contextually relevant when compared to broad national ad campaigns. However, she added, there will still be limitations, and modern marketers that need to have very fine-grained data filters may find that the broader categorization isn't enough.

“Knowing that someone is interested in sports but not knowing what specific sport or team they are a fan of may make it more difficult to target them with highly relevant ad content and could mean wasted ad dollars,” she said. “It is still early days, so it will be interesting to see how the technology evolves with feedback from ecosystem partners.”

Related Article: The Demise of the Cookie and the Rise of First-Party Data

Ask the Right Questions

Adswerve’s Sullivan claimed privacy advocates are saying Topics doesn't go far enough, while advertisers may think it won't be relevant enough. Still, Google is trying to find a happy medium between users' desire for privacy and marketers' desire to target.

“It is still too early to tell if this will go far enough for privacy advocates and yet still allow for the relevant targeting that marketers want,” Sullivan said. “Advertisers and users alike want to understand the steps Google is taking to remove fingerprinting and the stitching together of multiple Topics, as well, and many questions remain unanswered.”

Among those questions marketers should be thinking about:

  • What will be the total number of topics? Currently, Google selects topics from an advertising taxonomy. The initial taxonomy (proposed for experimentation) will include somewhere between a few hundred and a few thousand topics (initial design includes approximately 350 topics; as a point of reference, the IAB Audience Taxonomy contains approximately 1,500) and will attempt to exclude sensitive topics — a plan that will include the use of external partners. The goal is to source the taxonomy from an external party that incorporates feedback and ideas from across the industry.
  • Will Topics go far enough for privacy advocates and still allow for the relevant targeting that marketers want?
  • What is the 2023 deadline and timing on this?
  • "Our understanding is Topics is only tied to the Chrome browser, so it only impacts one of Google’s channels. Google’s reach is far greater," Sullivan said. "Will other browsers take this on and will this be adopted by other Google products and channels?"

Build Toward Loyalty, Trust and CLTV

Coburn said customer acquisition through advertising used to be cheap and easy, but that was the pre-pandemic past.

“We’re in the digitally accelerated and privacy-focused present,” he said. “If B2C brands want to improve their bottom line, marketers have to look past acquisition and lean into building loyalty, trust and CLTV. In this new world, retention is revenue. The ‘10% off your first purchase coupon’ will get your foot in the door, but it's now ultimately up to the marketer to keep the consumer engaged and avoid opt-outs.”