How to ‘Cookie-Proof’ Your Business and Rig Profits with Predictable Ads

This article will dive into what you need to know about iOS14’s impact on cookies, including what Google will be doing next year.  Conversion tracking will change forever because of iOS14. So what does that mean for you?

It’s all about cookies. Cookies are browser-based text files that get enriched by whatever a visitor does on your site (such as adding products to the cart and where you visited). Understanding how the cookie world is changing is crucial for your survival as a marketer. We’ve done a lot of research to show you how to cookie-proof your business.

The value of digital marketing is its predictable conversion rate. You can’t emulate something similar with billboards or traditional advertising. It comes down to “how accurately can I predict how you can convert?” with machine learning. The more data you have, the better you can predict that.

Currently, a user’s personalized data gets saved in cookies. And the issue is that major platforms will ban third-party cookies soon. So what can you do? First, let’s define the difference between cookies.

What are First-Party Cookies?

  • They’re created and stored by the site you visit directly.
  • They only track what you do on that specific site/app.
  • They collect customer data to improve the user experience.
  • These cookies are not going away.
  • They’re only accessible on the publisher’s site.

What are Third-Party Cookies?

  • They’re created and placed by third parties that aren’t the site you visit directly.
  • They track people across sites and apps.
  • They’re used for retargeting and segmentation.
  • The Facebook pixel is considered third-party.
  • These cookies will be banned by iOS14. They’ll be banned by Chrome in 2022, which will have a major impact.

How Cookies Help Businesses Make Sales

Businesses make a lot of money through cookies because when a person clicks an ad, cookies track your behavior. Facebook and Google sell this data so that advertisers can create more targeted ads to get more sales.

Why Facebook Is Having an Existential Crisis

Apple has decided to care more about users’ privacy than other companies. The launch of iOS14 has forced every app to not track third-party data unless permission is given.

People are predicting that around 80% of users will opt out.

The issue is that Facebook Ads is very reliant on third-party data. The majority of the data it collects to form advertisers is outside the Facebook ecosystem. It collects data across many sites and apps.

Historically, e-commerce businesses could install a Facebook pixel, which gives Facebook permission to collect all sorts of data on your site and millions of sites. This data provides robust segmentation and targeting that enhance targeting through machine learning to get more sales. With that data going bye-bye, that’s an issue.

Facebook’s Reaction

So here’s what Facebook has done and said to help advertisers adjust to these changes as best as possible.

  • Facebook moved from the standard 28-day attribution window to a 7-day window.
  • Advertisers should expect a three-day delay in reporting.
  • You should verify your domain.
  • Use a conversion API (max of 8 events).

As you can see, advertisers will lose a lot of valuable insights because of the lack of data for reporting and optimization. Long story short, that means there’s less power to automate and predict results. So what can you really do? We’ll cover it in more detail later, but you need to accumulate as much data as possible and keep them on the Facebook platform.

What about Google?

Google is different because its ads are intent-based. Google ads don’t rely on pixels to serve ads to people because all the data it collects is inside its own platform.

To explain, there are two categories of marketing. The first is push marketing.

Push Marketing

Social media platforms including Facebook, Google, Instagram, and Snapchat fall within push marketing. In this type of marketing, you’re interrupting a user’s experience to serve them ads based on their interests. Push marketing is good for the top of the funnel, brand awareness. The downside is that it relies on collecting data.

Pull Marketing

Pull marketing includes any search engine advertising. Search engines including Google, YouTube, and falling within pull marketing. The benefit of pull marketing is that it’s intent-based. You’re showing your ads to people who are already expressing some level of interest based on their search terms. The downside is that it relies on traffic to scale.

How Google Is In A Better Place

Google has a lot more first-party data than Facebook or related platforms Because it owns so many popular platforms that collect that data in-platform.  Google owns Chrome, Android phones, Google Docs, YouTube, Google Sheets, and Gmail.

Plus, did you know that Android phones have an 85% market share? And The Google Chrome browser has a 65% market share?

When you own the data, you own the conversation.

Quick Examples

  • Is the data collected by someone on an iPhone searching ‘tesla model 3’ on Google considered first or third-party data? It’s considered first-party data since the data is stored and collected in-platform on Google search.
  • Is the data collected by someone liking cat photos on Facebook with an iPhone considered first or third-party data? Is considered first since everything is done on their platform.
  • Is the data collected by someone on an iPhone who reads a few articles on washingtonpost.com and then goes to Facebook considered first or third-party data? Is considered third-party data that the pixel won’t be able to capture since Facebook does not own washingtonpost.com.
  • Is the data collected by someone on an Android phone who downloads a fitness app tracker and logged into Facebook considered first or third-party data? It’s considered first-party data to Google because Google owns the phone’s operating device.

A Look at Google’s Future

Google has announced that it will remove third-party cookies in the year 2022. The Facebook pixel dies because Google Chrome has 85% market share. On the bright side, Google has announced a replacement called FLoC (Federated Learning of Cohorts) that is claimed to be 95% as effective as personalized tracking and doesn’t require cookies.

 

This replacement basically puts you into a group of people with similar interests without revealing personal data about your browsing history.

 

Here’s what we’ve learned so far (since it’s still in development): Google doesn’t store any real-time data after a user leaves. Instead, it tags a user in groups based on behavior without saving any personalized data and uses this “cohort” data to sell ad inventory. For example, let’s say Chiseled Chad watches some YouTube videos on fitness and downloads a fitness app. That’s enough data for Google to tag Chad in a fitness cohort. When Chad goes on to a different website, Google recognizes that he’s part of this fitness cohort but doesn’t know exactly how he got tagged (because that data gets deleted). Now, advertisers can still use this cohort targeting to target Chad effectively and have a good ad experience.

Why is Google Powerful Now?

Google is in a great position because they have been doing group targeting already. FLoC is right in their wheelhouse, and the amount of first-party data they own puts them at an advantage when third-party cookies go away.

If you look into the future, you can see that things are moving in Google’s favor. Google has the quality of data to better predict conversion rates.

Conclusion

Facebook is now at the mercy of Google and Apple. Because of Facebook’s heavy reliance on third-party data and its push marketing approach, the future looks bleak for it. Google, on the other hand, has a bright future since it has so many owned channels and devices with a massive market share. Google’s pull marketing approach and first-party data mean it isn’t reliant on a pixel.

 

A holistic channel approach is key; you can’t rely on one channel anymore. Build more intent-based marketing Since it doesn’t rely on third-party data. Start to build And acquire first-party customer data that you own yourself, such as email lists and membership logins and portals. And keep people on-platform (Facebook) to create retargeting pools.

Tracking will change drastically. And it will be harder to acquire the same results you have been on Facebook, which is good. Market research and direct response skills will become key. If you aren’t using Google ads, this is your last chance!

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