Big Online Ad Changes Are Happening – What Now for Businesses Running Online Ads?
Big Advertising is in the midst of one of the biggest changes in digital advertising in at least a decade – all driven by the need to protect web user’s privacy. The changes will impact how businesses advertise on the web, and virtually every ad platform. The effects will be far-reaching for advertisers and in most cases a bit unpredictable.
The big news announced this spring was that Google will block 3rd party cookies sometime in 2022. There’s already a lot of momentum for reigning in advertisers’ access to personal information. For example, Firefox and Safari browsers have already banned 3rd party cookies, and Apple has discontinued the practice of providing mobile IDs to advertisers by default. Google’s announcement represents an industry sea change since Google’s Chrome browser represents 65% of browser share. Their decision now affects the majority of the retargeting ad market – so now advertisers have to pay close attention.
Cookies and Pixels – What You Should Know
Cookies are a small piece of code that is placed on a website visitor’s browser when they visit the site. It allows the site owner to know who you are and what interests you on their site. These are first-party cookies and will not be affected by third-party cookie blocks. It’s when the website owner installs other pixels, like Google, Facebook, or double click on their site for the purposes of collecting individual user’s browser history and retargeting that will be eliminated. Pixels (often used interchangeably with “cookies” but are not exactly the same) are invisible pixel-sized images that are placed on a webpage. When the page loads in the page visitor’s browser, the pixel alerts the ad server and enables tracking of the visitor’s web behavior after they’ve left the original site. This is why if you visit an electronics website looking for TVs, and then visit the weather channel, for example, you’ll be served ads for TV’s as you browse the weather channel.
The benign view of tracking people’s web history is that it serves web users ads that are relevant to their interests – and both the user and the advertiser benefit from that. The evil side of this is that quite a bit of the user’s personal information and interests can be collected without their knowledge or consent, and even though it’s supposed to be anonymous, some of these marketers have ways of finding out exactly who you are.
If this all sounds creepy to you, you’re not alone. And the public’s demand for more protection of their online information from marketing trackers has prompted Big Advertising to make these changes and it’s even triggered potential legislation.
In full confession as an online advertising agency that manages ad campaigns for clients, I’ve placed hundreds of these ad tracking pixels on clients’ websites solely for the purpose of remarketing. It’s one of the highest returns on ad spend because retargeting ads are shown to a warm audience that has already visited their website, making them more likely to buy. As an agency, we owe it to our clients to get them the highest return for their ad spend. But on the consumer side, I also understand the need for greater personal information protection.
What Does Google’s Decision Mean To Advertisers?
For the most part, the ability to run retargeting ad campaigns the way we have been is going away – likely by the end of 2021 or early 2022. That’s going to be a huge hit to the effectiveness of ad campaigns. Retargeting ad campaigns are common and effective ad campaign practices for small and large businesses alike. Amazon, for example, spends huge amounts of money on retargeting ads. Likewise, Facebook and many other advertising platforms will not be able to retarget with the pixels they currently use. It’s a major change for those businesses that depend on retargeting.
But in my view, consumers and advertisers should celebrate this change. People will have better web privacy and the good news for advertisers is that there will be alternatives for them to reach warm audiences that are interested in their products and services.
Google is already testing a new approach that doesn’t use cookies (FLoC – Federated Learning of Cohorts) and assigns anonymized IDs to visitor’s browsers. FLoC further assigns them to a big enough audience with similar interests so that individual information gets hidden in a crowd or “cohort”. Then advertisers can run targeted ads to this group. Yes, Google will still be collecting information, but the proliferation of personal information and the storage of that information on servers all over the web as it’s done today will be a thing of the past.
To be clear, not everyone agrees that FLoC is the answer. Google will still track web history in order to be able to assign your anonymized browser to the right cohort. It’s controversial because there are many people that believe that there shouldn’t be user tracking at all. Mozilla Firefox, Apple’s Safari, and Microsoft Edge have already signaled that they won’t permit FLoC. That may change if Google proves FLoC to be a viable privacy option.
There are other possibilities outside of Google that may debut as replacements (will ISP’s, Amazon, or Microsoft step into the gap?) for the lost retargeting capability. The vacuum of billions of dollars of lost retargeting revenue will drive something that has always been a strong suit in this industry – entrepreneurship. But those have a less clear definition today.
Four Things Online Advertisers Can Do In The Interim
If you currently run retargeting campaigns, don’t panic. Remember when everyone thought that ad blockers were going to sink the online ad industry some years back? I think we’ll look back on this change the same way several years in the future. In the meantime, here’s what I recommend:
- Continue retargeting campaigns if they are getting the results you’re looking for. The cookie ban doesn’t go into effect until 2022. By that time, there will likely be an acceptable alternative.
- Get your A-game on with non-retargeting ad campaigns. Search advertising and every ad platform like Google, Facebook, and Traffic Wave have cold audience display ad and video ad campaigns that don’t use cookies. Split test and improve ad copy, keywords, ad creatives, and bidding strategies. Doing so gives advertisers a chance to become more effective using digital ad campaigns without using retargeting.
- Keep your eye on Google’s FLoC and other retargeting alternatives in development
- Decide if you’re OK with the way the targeting works to protect individual information
- If you adopt a new approach, learn the ropes quickly and give yourself an early competitive advantage. There will undoubtedly be a learning curve for the new targeting options.
- Start now to build your own email or SMS lists that don’t depend on any ad platform. Email marketing is still very effective and in light of these new developments, will become even more valuable.
As you can see, there’s considerable uncertainty about how all of this will turn out. As a digital marketing and advertising agency, we’ll be leveraging our industry relationships to stay in front of developments as they evolve. If you’d like to follow our discoveries or discuss ad strategies for the new digital world, contact us here.
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Article by Greg Jordan of Next Level Local Business – nextlevellocalbusiness.com, a Sarasota marketing and advertising company specializing in traffic, online reputation, and marketing copywriting.