Permission marketing is not a new concept, but today, it's even more relevant than ever. After decades of interruption marketing, the value and ROI of this dated methodology continues to decline. Today, there's increased awareness of the tracking that happens behind the scenes (without consent) and consumers are beginning to fully understand their data and online interactions have real value.
Changing the Cookie-Based Advertising Model
Cookies have always been at the forefront of digital advertising and the upcoming elimination of third party cookies has the industry in turmoil. Although Google moved the deadline for stopping third-party cookies until 2023, there has already been a growing trend shifting brands and advertisers away from this model as a result of increased privacy concerns and global regulatory changes. The shift is part of a broader swell of action from tech giants, including Apple's App Tracking Transparency and Adobe's Real Time Customer Data Platform changes, which are just two who are paving the way for a permission-based model where consumers have a choice of to whom and how their data is shared.
Third-party cookies differ from other site cookies that improve the user experience by remembering settings and choices. Cookies keep items in your cart when you leave a page and return. They can help save time with form submissions and remember language and currency preferences – all of this is pretty helpful to most internet users. Third-party cookies are on the other end of the spectrum. Far removed from helping with UI, they instead track your actions and site visits in order to create a profile for advertisers which informs targeted ads to draw a profit.
As third party cookies begin to dissolve into a distant past, marketers need to change their behaviors and seek alternative ways to build trust, loyalty and long term relationships with their customers to stay relevant. Permission-based marketing is the alternative – or at least a good alternative.
Compensation and Trust to Reshape the Internet Economy
Although regulations like the CCPA and GDPR have ignited a global effort to empower individuals to control and keep private their personal data, these regulations have been a boon to the same powerful intermediaries that triggered their existence. The walled gardens have the resources to collect and process user data at extraordinary scale, and since violators face costly fines, advertisers are forced to consolidate their online ad spend with those with the wherewithal to absorb the risk.
Moreover, if you vote, own a home, a car, or a credit card, you can assume that a wealth of information about you is available to those willing to pay for it. Even if a third-party-cookie is not at play, your data is still being collected, purchased and sold. Notwithstanding the current regulatory apparatus and all of the changes in ad-tech, your data is still out there and you're not profiting from it.
With users holding more of the reins of their digital experience, they can rightfully expect some compensation for their participation. There's certainly enough money to go around. According to data from PwC, digital ad spending grew more than 12 percent in 2020 despite the massive impacts of the pandemic. The top ten ad players accounted for 78.1 percent of the revenue for 2020, with their portion totaling more than $109 billion. Compensation won't mean the average consumer receives a million dollars for online permissions, but they can earn real sums for the sharing of their data. Advertisers and marketers will willingly participate in this dynamic because personal data is so valuable and its usage so widespread. It's the basis of opinion polls and scientific research and enables the creation of specialized interest groups for everything from golf to day trading.
Technology is enabling a more transparent advertising ecosystem, one that can benefit both consumers and advertisers through a reward system rather than the data exploitation which we've known for years. Blockchain technology is a trusted tool for issuing digital rewards (in the form of cryptocurrency). And, the ability to issue a desirable reward is essential for those who want to succeed in the next era of digital advertising – i.e., the permission-based era. Brands and developers must ask for permission to interact with consumers in exchange for their data, and they need to be prepared to reward them for sharing that data – this is the equitable and right thing to do.
Asking Permission and Zero-Party Data
Marketers are at a crucial moment and have an opportunity to build trust with their audiences through consent. A permission-based advertising structure is the next generation of internet advertising driving value exchange for both parties – it will be the Win Win Web.
Advertisers win by knowing what customers intend to do or buy in the future by collecting zero-party data, i.e., data that is intentionally and proactively shared directly by the consumer. By simply asking permission and compensating users for sharing their engagement, consumers will willingly and intentionally share their data, enabling advertisers to build direct relationships with consumers, and in turn, better personalizing their marketing efforts.
A compensation-based arrangement adds meaningful consent to an exploitative economy. It shifts data ownership back to the individual and gives advertisers higher ROI. The end result is a change from the longstanding business model that only benefits the biggest tech companies to one that fulfills the early promise and equitability of the internet.
This article was originally published in MarTech Series on August 13, 2021
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.