CXO Bytes

Strategy roadmap for addressing key privacy challenges faced by the mobile advertising ecosystem

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By Yogeeta Chainani

Given that people are nowadays spending on average more than 4 hours on their mobile phones daily, (Source: Statista) mobile marketers are undoubtedly poised to seize this opportunity and target customers in their preferred digital environment. By implementing a strategic mobile advertising approach, brands can effectively engage with customers in highly creative digital ways. Valued at US$ 144.07 billion in 2022, the mobile advertising industry is expected to grow to $750.21 billion by 2030. (Source: Fortune Business Insights Mobile Advertising Market Size)

Mobile streaming, the advent of mobile eCommerce, and the increasing popularity of online gaming are key factors driving the growth of mobile advertising. However, data privacy is a significant concern for mobile users as well as advertisers due to data breaches caused by intrusive practices of sharing personal data. For example, Swiggy and Amazon’s payment processing partner Justpay reported a data leak of more than 100 million credit and debit card holders in 2021.

Such data breaches make users anxious about how brands use their data. Data privacy regulations such as GDPR and CCPA underscore the importance of establishing a mobile advertising ecosystem that prioritizes user-driven experiences.

While brands have to comply with these regulations, it also impacts how they manage their mobile advertising strategies that thrive on consumer data.

Data privacy regulations have a significant impact on how brands collect and utilize data for personalized advertisements, which is a crucial requirement and a prevailing trend in the modern shopping experience. This can affect targeted marketing initiatives as they might lack valuable customer data insights. Small businesses might struggle to adapt to the changing advertising landscape as three in five Indian companies are still trying to gauge the impact of data privacy developments on their mobile marketing. (Source: Forrester Consulting Study-”Future of Mobile Advertising in Tackling Data and Identity Deprecation”)

Moreover, 87% of marketers believe that not being able to foster data-driven customer targeting is a significant challenge of privacy-first mobile advertising. (Source: Forrester Consulting Study-”Future of Mobile Advertising in Tackling Data and Identity Deprecation”) Besides, brands have to comply with regulations like GDPR and CCPA because failure to do so can lead to financial and legal implications. Also, they must keep themselves updated with any changes or updates in these regulations.

study by Epsilon states that around 80% of advertisers rely on third-party data to target users. (Source: Epsilon Research- “Preparing for a world without third-party cookies”). With users becoming conscious of sharing their data through cookies, marketers can find reaching and promoting to the right audience difficult. Not just third-party data but the inability to track behavioral data can make retargeting difficult, resulting in lost customers. The growing demand for increased transparency can also put marketers under pressure to plan marketing initiatives carefully and gain customer trust.

Data without identifiers leads to the flow of non-standardized data, making aggregation difficult and tricky for marketers to measure campaign performance. For example, marketers have to navigate specific ad challenges on iOS devices like the removal of tracking parameters while in Safari’s private browsing mode as recently announced at Apple’s Worldwide Developers Conference (WWDC23).

So, when data collection and usage become challenging, marketers might spend more on other marketing initiatives to maintain promotional consistency, affecting the mobile marketing budget.

These challenges will pertain because data privacy laws and regulations will stay and probably evolve further.

A blueprint can help brands and marketers comply with these regulations and deliver personalized and targeted advertisements.

Firstly, marketers can develop a proactive privacy program. The privacy program should not merely govern compliance with privacy laws; instead, it should govern customer engagement activities per the company’s data privacy standards at any platform across all customer touchpoints.

Third-party data is bound to wither, and marketers can’t rely on it. They can use contextual data like time spent within the app and deeply understand customers’ particular preferences. It can help brands to develop strong brand-to-consumer relationships thriving on consented customer data, cultivating better brand loyalty.

Further, they may collect data that is truly needed. They can save time in collecting, aggregating, and analyzing massive amounts of data, which is invaluable. Data-driven advertising also depends on the quality of tech solutions and the partner’s capabilities. So, companies should review vendors and their solutions’ reliability to reduce data risks.

Additionally, they should choose a tech partner offering innovative solutions that foster privacy and data compliance alongside modern advertising functionalities. Companies need to be able to rely on a tracking partner that empowers marketers to create meaningful and value-driven advertising campaigns while mitigating the complexities associated with privacy issues and regulations.

Furthermore, companies can also update their tech stack to the changing privacy ecosystem and have reporting systems that can ensure effective analysis of non-standardized data. It can help them to offer an engaging user experience and increase customer retention for better brand advocacy.

Ultimately, accepting the change, embracing transparency, and following data security practices can help companies stay ahead of the evolving mobile advertising landscape and alleviate data privacy challenges effectively. Marketers as well as ad tech providers that ensure data protection of the highest standards, will gain customer trust, greater purchase intent, and brand advocacy.

However, amidst these new challenges, there are also opportunities, especially with an innovative tracking partner that prioritizes privacy while maintaining advertising functionality. These solutions empower marketers to track user actions across various touchpoints, optimize ad spend, and deliver authentic cross-channel experiences, all without compromising user privacy.

(The author is Yogeeta Chainani, Co-Founder and CEO at Swaarm, and the views expressed in this article are her own)

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