Apple’s recent iOS 14 IDFA announcement, which followed Google’s January third-party cookie deprecation announcement, has made industry waves. It is the latest change in the clear trend of identifier deprecation that started in 2017, and will likely accelerate in the coming months and 2021. As a refresher, let’s review the differences between the two announcements:
- Third-party cookies are placed on desktop and mobile web browsers. These are being removed by all major browsers. (Safari and Firefox have removed them already, and Google Chrome plans to do so by 2022.)
- IDFA, Apple’s Identifier for Advertisers, is used like third-party cookies, but for apps on iOS devices. Starting in early 2021, their next operating platform update (iOS 14) will require user consent to deploy IDFA within apps. Every app will send a pop-up notification asking for user permission.
We’ve already explored how these shifts will impact advertisers, but how about the end user?
Cookie deprecation and IDFA limitations driven by consumer privacy concerns
Browsers and mobile operating companies are positioning these updates as being driven by consumers’ growing demand for privacy. Apple’s recent iPhone video ad, for example, features people loudly sharing personal, often embarrassing and dangerous information with those around them, and then closes out with: “Some things shouldn’t be shared. iPhone helps keep it that way.”
Consumers do indeed seem to care more about their privacy with every passing day, with data showing that 85% of US internet users are concerned about their privacy, and 76% of consumers are concerned about how tech and social media companies use their online data.
But what’s gained in privacy with the ecosystem shift means a customer experience tradeoff: namely, a loss of free and open, ungated content and personalized advertising which we all know consumers value.
Let’s take a look at the ways cookie deprecation and IDFA limitations negatively impact the end user, as well as what advertisers can do to best meet consumer expectations on all fronts.
A hit to the wallet—Less free content
Advertising powers a free internet and allows consumers to access content easily and at no-cost (in most cases). This free content could be lost as third-party cookies and IDFA go away. If publishers can’t fill their ad space and monetize their websites and apps, their business models will need to adapt. Likely outcomes are more subscription models, paid content and reliance on contextual targeting.
1st-party vs 3rd-party cookies: What’s the difference?
Consumers will have to wrestle with the question, “Is it better to pay for the content I want with money or with data?” Right now, we’re seeing that only 7% of consumers who do not pay for content said they would consider paying.
Even without subscription models, consumers can expect more gated content behind the requirement to register for an account. This allows emails and other information provided by consumers when creating accounts on websites to be linked to publishers’ first-party cookies. As publishers seek to monetize their websites in a world without third-party cookies, they can leverage their first-party data to better identify users and serve them relevant ads.
“Are you talkin’ to me?”—Loss of relevant, interesting ads
Consumers value personalized brand experiences. Our research shows that 80% of consumers are more willing to do business with a company that provides personalized experiences, and 90% find personalization appealing. This study also shows that 68% of consumers think it’s worth sharing personal information in exchange for relevant offers, recommendations, and discounts.
With this ecosystem shift, advertisers who were reliant on third-party cookies and IDFA permissions will have greatly diminished access to consumer browsing data, which means many will not be able to continue to provide the level of personalization consumers expect. Consumers can expect to see ads that are irrelevant and of much less interest to them, which can put the relationship at risk. According to an Infogroup 2019 survey, 90% of consumers indicate that messages from companies that are not personally relevant to them are “annoying.” And 67% of millennials/Gen-Zers have said, “I expect offers from companies to always be personalized.”
Groundhog Day—Increase in repetitive ads
Third-party cookies and IDFA signal when a user receives an ad, and advertisers set frequency caps to avoid over-messaging consumers. Without caps, consumers are likely to receive more repetitive ads and experience over-messaging as they browse—which can lead to annoyance on the consumer’s part.
Advertisers also tie multiple cookies and device IDs, across devices, to one individual. Without cookies and/or IDFA, advertisers won’t know how to reconcile the identity of users across their multiple devices and browsers. This will also contribute to consumers receiving repetitive ads.
Advertisers previously reliant on third-party cookies and IDFA will now have difficulty tying conversions back to the person who converted. This means consumers are more likely to receive ads for products they already purchased.
How to deliver personalized content in the new landscape
It’s time to future-proof your digital media strategy to ensure you can deliver to customers what they want: privacy + personalization.
With proactive preparation since 2012, Epsilon has built a privacy-centric, people-based identity graph that is anchored in deterministic purchase data from individuals and has limited reliance on third party cookies. The integrity of this purchase data allows us to have 96% accuracy and industry-leading match and reach rates. As a result, we are able to identify and serve 98% of our ads to individuals—not orphaned cookies or device IDs.
Epsilon’s direct relationships and growing first party integrations with over 5000 publishers also help us defend against third-party cookie deprecation, because, while third party cookies are on their way out, first party cookies are alive and well.
Our years of preparation building people-based identity with first-party strategies and relationships will enable us to continue delivering results for our advertisers, while still providing privacy.
See what Apple’s IDFA shift means for advertisers and the advertising industry: “With cookies crumbled and IDFA DOA, it’s time for a better identity strategy.”