Billy Loizou, prominent Australian tech industry figure and Amperity’s go-to APAC marketing expert, says Google finally phasing out cookies isn’t the only thing digital businesses need to worry about in the next 12-24 months.
In mid-2022, the Seattle-headquartered, Customer Data Platform (CDP) provider Amperity opened its premier Australian office and hired me to drive growth in the APAC region. After almost six months in the job and with the new year looming large, I strongly believe Australian businesses need to start getting their house in order now to get ahead in 2023.
From finally harnessing the power of first-party data to data protection and the benefit of having a proper CDP on your side to make sense of messy customer data, my predictions are below.
The imminent ‘cookie apocalypse’ will force brands to prioritise first-party data
Google said it was getting rid of cookies in 2022 but then delayed it to 2024 without specifying a date for the dawn of a cookieless world. This has led some organisations to become more relaxed than they should be. However, in case you missed it, Apple and Mozilla have already led the charge here, and it is already causing brand challenges. So why are we waiting for Google?
Whether it’s Google getting rid of cookies, Apple making mobile ad tracking harder or governments introducing more legislation – such as the California Privacy Rights Act (CPRA), which is going into full effect on 1 January 2023 – things are only trending in one direction with data privacy. Any business that hasn’t already gotten its first-party data act together needs to prioritise that in 2023.
First-party data must be leveraged to drive customer retention
Few economists expect anything other than challenging conditions in 2023. Customer metrics drive business metrics, and I think businesses will be more reliant than ever on a first-party data strategy next year to hold on to customers and remain one step ahead of their ever-evolving purchasing habits.
What I’ve been hearing from the U.S. is that marketing budgets are under pressure. Businesses are increasingly focused on retaining their existing customers rather than spending big to acquire new ones. In relation to e-commerce, it’s not so much that consumers have stopped spending altogether – they are just buying different things. For instance, they’re now picking up a $30 lipstick every month rather than a $60 facial cream.
With supply chains being what they are, it’s crucial to pick up shifts in consumer preferences ASAP. Comprehensive, readily accessible, first-party data also makes it easier for businesses to understand what their customers want when they are feeling unsettled and financially stressed.
The ongoing cybersecurity challenge of the Big Data era will persist
I’ve long advocated that Australian businesses take data protection seriously. But there’s simply no way for any organisation to avoid the possibility of data breaches. If businesses are going to collect and use customer data – and it’s really no longer an option for them not to – that will always provide cybercriminals with a larger attack surface to exploit. The question that begs to be asked is, ‘Is enough business value generated to justify the inevitable risk involved in collecting and using customer data?’ Most of the time, the answer will be yes.
Australian consumers are more understanding and forgiving than screaming headlines might suggest. I’d be surprised to see a significant number of Optus customers depart due to the recent hack. Americans didn’t stop shopping at Target when it suffered a huge breach in 2013. Unfortunately, companies can invest in best-practice cybersecurity and still get hacked.
We are better together
The idea of a magic-bullet solution is understandably appealing. The catch is that these solutions rarely work out well. Think about data warehouses and data lakes, for example. They offer a trusty solution for centralised data storage. The thing is, that’s all they do.
While centralised data storage systems like warehouses and lakes are great ways to keep all the data together, especially at the scale most enterprises deal with (we’re talking hundreds of billions of data points), they don’t organise and cleanse the data so that you can make the most out of it.
It’s far from a ‘one and done’ solution. That’s where a CDP like Amperity comes in. It powers up your data warehouse or data lake by:
- Cleaning customer data for superior ID resolution, providing teams answers to key questions about customer behaviour
- Providing built-in attributes that neatly lay out all the information needed to gain a picture of each customer, so you can perform advanced segmentation to find and reach the right audiences for a given campaign
- Managing workflows to activate use cases and bring the data to life
- Speeding up time to insights by providing access for non-technical teams
- Feeding data seamlessly into a range of different tools
2023 is the year for brands and organisations to embrace a ‘better together’ mentality when it comes to their data needs.
DCR + CDP = a match made in (data) heaven
Data clean rooms (DCRs) aren’t perfect. However, they do supply advertisers with access to information they otherwise wouldn’t have. And, especially with the impending demise of third-party cookies, every piece of information is gold.
As privacy rules become stricter, DCRs will skyrocket in popularity. In fact, recent predictions indicate that by 2023, 80 percent of advertisers with media buying budgets over $1 billion will use DCRs.
However, a DCR is only an extension of a first-party data strategy. Connecting a CDP to a DCR allows first-party data to be anonymised and analysed alongside third-party sources. A CDP can also receive data from the DCR in the form of segments or targeted audiences it can then share with connected marketing platforms for activation.
Think of it this way: You can use Venmo or PayPal without a checking account attached to it, but it’s a much better experience (with better outcomes) if they are connected. Together, a DCR and a CDP allow organisations to manage, process and analyse their data in a way that’s efficient, safe and compliant.