If your business relies on digital advertising to drive leads and sales, you’re not alone. Last year, digital ads totaled more than half of all U.S. ad spending — nearly twice as much as the next largest category: television.

Spending will continue to grow in the coming years. According to research by Dentsu and Statista, U.S. advertising will grow by an adjusted 5% annually through 2025. But starting in the second half of 2024, the dollars you spend on digital advertising could deliver far fewer leads and customers.

The culprit? The need for improved consumer privacy and the departure of third-party cookies.

Until very recently, third-party cookies have been the only way ad networks were able to optimize the audiences seeing your ads based on conversion rates.

For instance, if Facebook sends visitors to your site, the platform drops a small computer file in a folder of your web browser or mobile device, identifying those prospects with a unique ID. That’s all a cookie is: an invisible identifier.

The problem is that every cookie needs to be tied to an owning domain. The fact that Facebook’s cookies have a Facebook domain instead of your site’s is what makes it third-party instead of first.

Privacy advocates have decried this practice for many years because whatever privacy policy visitors accept on your site cannot extend to third parties.

Farewell, Safari and Firefox — and Soon Google Chrome!

Since 2007, browsers that wanted to be privacy-friendly have gradually stopped allowing third-party cookies. This chipped away at ad audience awareness, reducing overall precision by roughly 10%. But when Google Chrome follows suit next year, something that has been merely a nuisance will become what is being called a cookiepocolypse.

Enter the customer data platform (CDP). These platforms don’t magically restore external cookie capabilities, but they perform two crucial functions:

Enhanced First-Party Insights

CDPs help grow understanding of known visitors and customers by collecting and stitching together data from a variety of sources. This follows the spirit of privacy laws in that it encourages ownership and governance of customer data instead of outsourcing to third parties.

Many other marketing benefits are related to this heightened customer awareness, including improved personalization, often executed in real-time and enhanced by artificial intelligence (A.I.).

The bottom line is that direct customer relationships are key to online success in the future.

Connecting the Fragmented Data Dots: Does CDP Complete the New MarTech Puzzle?

Do you have too much data? Is your data unstructured and siloed? Do you know how data fragmentation can affect your business? Do you know how to use the right data to give your customers a delightful customer experience? Download this eBook today.

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Meeting Ad Partners Where They Live

To preserve their business models, ad networks are creating ways to optimize their offerings using server-to-server methods instead of cookies. These API connections are perfectly designed to communicate with CDPs. Some experts are even saying that CDP-driven ad efficiencies will greatly improve once we’re fully in the “cookieless future” because ad buys will be based on improved audience matching across hundreds of unique attributes.

Acquiring a CDP could become a competitive advantage. According to a recent IDC Infobrief, 41% of advertisers are “moderately to not at all” familiar with targeting methods other than third-party cookies. In online marketplaces, your far superior ad purchases may further drive down the costs of acquisition.

Other Reasons a CDP Should Be in Your Future

A customer data platform is a significant investment, so protecting the efficiency of your ad spending should merely complement other benefits. Here are a couple:

Consumer Expectations Have Grown

Your customers want assurances that their data is safe, yes. But they also want to know that you understand them and their evolving needs. CDPs deliver improved, personalized experiences -- both online and off, since the same awareness of customers can improve customer support encounters and many in-store use cases.

Regulation Will Only Increase

Making consent and transparency a habit now will benefit your business in the future as imperatives for consumer data choice and privacy grow.

The Bottom Line

TA Digital can help you evaluate CDPs based on your most important use cases. Contact us now for a free consultation.

About TA Digital

TA Digital is the only global boutique agency that delivers the “best of both worlds” to clients seeking to achieve organizational success through digital transformation. Unlike smaller, regional agencies that lack the ability to scale or large organizations that succumb to a quantity-over-quality approach, we offer resource diversity while also providing meticulous attention to the details that enable strategic success.

Over the past 20 years, TA Digital has positioned clients to achieve digital maturity by focusing on data, customer-centricity, and exponential return on investment; by melding exceptional user experience and data-driven methodologies with artificial intelligence and machine learning, we enable digital transformations that intelligently build upon the strategies we set into motion. We are known as a global leader that assists marketing and technology executives in understanding the digital ecosystem while identifying cultural and operational gaps within their business – ultimately ushering organizations toward a more mature model and profitable digital landscape.

Recognized in 2013, 2014, 2015, 2019, 2020 and 2021 Inc. 5000 list as one of the fastest growing companies in the United States, TA Digital is pleased also to share high-level strategic partnerships with world class digital experience platform companies like Adobe, SAP, Acquia, commercetools, Sitecore, and Elastic Path.

WRITTEN BY:

Jeff Larche

Director, Product & Innovation