Goodbye PII: Solving for a privacy-first world

By Ian Nadeau on March 10, 2023

the ecommerce solution for a privacy-first world

The rise of the anonymous consumer has sent marketers scrambling for answers as traditional identification efforts are proving less effective than before. Where once brands could rely on third-party cookies and unique Identifier for Advertisers (IDFAs) to verify a digital visitor, this valuable information is now harder to come by as regulations have evolved and users have gained greater control over the use of their data — commonly referred to as personal identifiable information (PII). 

Epsilon surveyed over 250 marketers nationwide in 2020 to get their thoughts on the loss of online identifiers. Of those participants, 69% believed the elimination of third-party cookies and IDFA will have a greater impact than the CCPA and GDPR. Further, 83% of respondents anticipated a moderate to significant impact on their digital advertising efforts. What’s worse, the majority of respondents didn’t even know how to combat the loss of PII (​​67% felt disappointed, frustrated, overwhelmed, helpless, or confused). 

Now years removed from this study, were these marketers right to be worried about the future of digital advertising? Yes, yes they were. Let’s discuss. 

Before a privacy-first world

PII is defined as any information that permits the identity of an individual to be directly or indirectly inferred (e.g., names, emails, user IDs). There was a time when PII was easy to come by. Combine the ease of collecting data with the lack of regulations around leveraging that information for marketing purposes and the path was paved for effective audience segmentation and targeting. 

When marketers couldn’t get user-generated information (known as first-party data) they turned to third-party sources. Third-party data can be collected from things like email lists, browser cookies, and data marketplaces. Much of this information is compiled by data brokers who use it to create consumer profiles which they then sell to marketing teams. This source was so valued that marketers spent $11.5 billion on data and related solutions

Everything was going smoothly for digital marketers, with CEOs seeing third-party data as being an integral part of the future in 2018. However, that all changed when data breaches caught the attention of regulators globally. The European Union was the first to pioneer data privacy and security with the passing of the General Data Protection and Regulation (GDPR) — which heavily fines those who violate its new standards for identity protection. Soon after came the California Consumer Privacy Act (CCPA), which gives residents of California: 

While both the GDPR and CCPA are limited to the EU and California respectively, Gartner predicts that 65% of the world will have similar data protections by 2023. Welcome to the privacy-first world. 

The effects of privacy-first 

The same Epsilon survey mentioned above found that nearly 80% of the marketers who responded were either very or moderately reliant on third-party cookies. Only 46% felt prepared for the loss of this data and 70% of them expected digital advertising to take a step backward as a result of changes to third-party data — particularly for personalization and revenue attribution. 

How have the changes to security and privacy affected digital advertising since the 2020 Epsilon survey? 

Case study: Apple’s app tracking transparency 

Released with the iOS 14.5 update in 2021, Apple’s App Tracking Transparency (ATT) enabled a new feature for iPhone users (55% of the U.S. population) to effortlessly dictate whether or not an app can track activity across digital channels. A study by MOLOCO examined the effects of ATT by looking at 33.3 billion programmatic advertising bids, 2.2 billion ad impressions served, 8.2 million clicks, and 95,000 actions and found: 

  • Tracked users dropped from 73% to 32%
  • Cost-per-acquisition (CPA) advertising in ecommerce marketing for non-tracked users increased by 173% after the release of iOS 14.5
  • CPA costs for tracked users increased by 63% after the release of iOS 14.5 and 94% more after iOS 14.6 went live 

Apple’s ATT suppresses IDFAs, which caused a major disruption to the targeting and tracking capabilities inherent in legacy systems. Because of this, advertisers are now forced to reduce or eliminate spending on channels that are no longer effective — with Facebook experiencing the biggest exodus of marketing dollars to the tune of $10 billion this year. 

ATT is just the beginning of tech leaders putting consumer privacy first. Apple gives users even greater control of their PII with the release of iOS 16 — enabling them to deny clipboard access to applications, conduct a three-step review of privacy settings, and more. 

Google is also moving towards greater data privacy and will sunset third-party cookies in 2023 (impacting monetization for 70% of digital media). Further, the company is going to follow Apple’s lead by suppressing the availability of ad IDs on android phones (GAIDs) in the next two years. This means that 99% of mobile users will soon have even greater control over their data. 

With tech giants empowering users to protect their personal information and new legislation promising consequences for misusing PII, how can those in ecommerce continue to market effectively? 

How to solve for less PII

The death of third-party cookies and identifiers has marketers scratching their heads for a viable replacement. According to McKinsey, the U.S. digital ad industry faces significant challenges with ambiguous solutions. What if the answer to less PII isn’t discovering how to collect more of it, but rather how to remove the reliance on it?

MOLOCO says that innovative technology is required to respond effectively to privacy and security changes. Session AI provides just that by replacing user information with clickstream data and machine learning. These powerful tools allow marketers to follow a customer’s journey in-session and deploy AI-driven experiences that are just as tailored as if you had that visitor’s PII.

This level of in-session marketing removes the dependency on user data by leveraging AI to connect the dots and deliver outcomes at scale — a solution that’s resulted in: 

  • Over $800 million in attributed revenue growth
  • 56% lift in collective sales
  • 26% lift in customer loyalty 
  • 88% reduction in margin loss

Learn more about Session AI’s in-session marketing and why it’s the ecommerce solution for a privacy-first world. 

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