For many years, companies have used cookies to track website visitors and improve their user experience. In addition, in the field of web advertising, it is common to collect personal data to design the "who, what, where, and when" of advertisements and to measure the effectiveness of advertisements based on behavioral history.

On the other hand, such corporate behaviorConsumers feel uncomfortableAs regulations on personal information protection become stricter around the world, many major companies, including Google and Apple, plan to phase out third-party cookies (Google hasChrome announces plans to phase out support for third-party cookies by 2022,Apple has the same policy).

The restrictions on third-party cookies are gradually changing the way businesses market, especially in terms of how they engage with potential customers through digital marketing activities.

Impact of strengthened regulations on personal information protection on marketing activities

Strengthening regulations on personal information protection are likely to affect the following elements of marketing activities:

• Data collection
• Audience segmentation
• Digital media buying and optimization
• Web advertising targeting
• Marketing effectiveness measurement,Cross-channel measurement

This means that the detailed targeting and measurement of results that previously relied on third-party cookies to track individuals will become more difficult.

This will be a turning point for web advertising, and a good opportunity for your company to reconsider its stance on the use of personal information.

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Advertisement effectiveness analysis in the cookieless era

We will be looking at advertising effectiveness analysis in the cookie-less era, and will introduce examples of how companies are responding, as well as a case study of a major domestic cosmetics manufacturer that achieved an 11% increase in sales by utilizing the notable MMM method.

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Considering the use of first-party cookies in web advertising

One way to counter the abolition of third-party cookies is to utilize first-party cookies owned by your company (such as information about your company's website visitors, personal information collected from customers, and purchasing history).

For example, by removing any personally identifiable data from your company's first-party data (anonymizing it) and providing it to advertising publishers (recipients), you can deliver ads targeted to similar audiences.

However, if it is expected that personal information can be identified by linking the company's data with the recipient's data, it will be subject to personal information protection regulations, so both the company and the recipient must obtain consent after clearly indicating the purpose of use and the target information in advance. (Consent must also be obtained again when adding a new purpose of use.)

In addition, when using first-party data, you should be aware of the following risks:

1)Even if it is legal, if consumers deem it "inappropriate" or "inadequate," it could lead to a loss of trust and a backlash.

2)Even anonymous data may change depending on changes to the privacy policies of the companies that provide the mobile devices (smartphones and tablets) and browsers (Chrome, Firefox, Edge) from which the data is collected.

Potential uses of walled garden data

A walled garden (closed platform) is an organization or company that keeps users within its own platform/ecosystem as much as possible and holds user data and information. In the marketing industry, this mainly refers to three companies: Google, Facebook, and Amazon.

In today's marketing activities, most companies use data held by walled gardens. Due to regulations on the use of third-party cookies, it is necessary to check the following points when using walled garden data and keep an eye on future trends.

What to check when using data from walled gardens

• What restrictions do walled gardens place on access to data?
  •  Can the data provided by walled gardens be used to perform sufficient analysis?
• Is it possible to obtain data that can measure the effectiveness of cross-media advertising?
  •  Can the data be brought into and analysed within your analytics and measurement ecosystem?

Changes in measuring the effectiveness of marketing activities

Even if technologies are developed to track individuals without relying on third-party cookies, given the global trend toward strengthened regulations on personal information protection, it is likely that they will also be regulated in the future.

In other words, major changes are on the way in which effectiveness of marketing activities is measured.

It will no longer be the case, as in the past, that one simply tracks individuals and measures the short-term effectiveness of each advert using indicators such as CPA (cost per acquisition), but it will become increasingly important to measure the medium- to long-term effectiveness of marketing activities as a whole (the value that can be provided to customers) using indicators such as LTV (customer lifetime value) and loyal customer conversion.

In other words, rather than focusing on a short-term, individual perspective, we must look at things from a medium- to long-term, comprehensive perspective.Overall optimization of marketing activitiesIt is becoming more important to make decisions with this in mind.

Marketing Mix Modeling (MMM), an advertising effectiveness analysis method that does not rely on cookies

Marketing mix modeling (MMM)This method of analyzing advertising effectiveness does not require personal data collected using cookies. The data required is data on each marketing measure (such as advertising volume and costs) and data on results (number of applications, number of sales, sales, etc.).

MMM is not a method for tracking individuals.A method for analyzing overall trends based on statisticsIt is possible to comprehensively analyze the effectiveness of marketing activities, including not only web advertising but also all offline advertising (TV commercials, outdoor advertising, etc.) and external factors. Furthermore, based on the analysis results, it is possible to optimize budget allocation and predict results.

How marketing departments can prepare for the cookieless era

Restrictions on the use of third-party cookies due to the strengthening of regulations on personal information protection will affect the marketing activities of many companies. What measures will be required in the cookie-less era?

1) Understand your company's data usage and dependency

Identify the sources of anonymous first-party data you collect and their data restriction policies.

- Check your company's usage of third-party data

    Example:
– Used to analyze the ads that converted users came into contact with
– Used to build audience segments and target ads

2) Create a roadmap for data regulations

・Consider ways to respond to data regulations in each area of ​​your company's marketing activities and create a roadmap for countermeasures

3)Check with partners such as advertising agencies to see how they are handling the issue.

- Identify the impact of data regulations on ad delivery and effectiveness measurement requested from partners such as advertising agencies, and how to address them

4) Rethink how you approach measurement

・Use data that does not rely on third-party cookies to measure effectiveness.

・Rethink how to measure not only the short-term "effectiveness of each ad" but also the mid- to long-term "value of all marketing activities"

– MMM is effective as a method of measuring effectiveness that does not rely on personal data and can capture the whole picture

Introducing a method for analyzing advertising effectiveness that does not rely on cookies

MAGELLANvisualizes the effectiveness of all types of advertising, including TV commercials and transportation ads, whose effects are difficult to see.Marketing Mix Modeling (MMM) Analysis Services.

MAGELLAN's analysis does not involve tracking individuals, but instead uses a method (MMM) that analyzes overall trends based on statistics. This makes it possible to plan strategies and implement measures based on numerical evidence even in the cookie-less era of marketing.

The path to success isappear

It is possible to visualize the path that led to results by taking into account not only the direct but also the indirect effects of each measure. It can also clarify the influence of external factors.

Measures that contribute to business results areUnderstand

You can see the effectiveness of not only online ads such as listings and SNS, but also offline ads such as TV commercials and transportation ads, whose results are hard to see. You can also visualize the effect of advertising and promotional activities aimed at awareness and branding on business results.

Optimal budget allocation and business results can be predicted

You can efficiently manage your advertising using two simulation functions: "Advertising budget required to achieve business performance goals" and "Budget allocation that maximizes business performance within a set advertising budget."

Author information

XICA Co., Ltd. Marketing Team