4 Privacy-Minded Predictions for Data-Based Marketing in 2022

By Ross McNab


Financial analysts are hopeful the economy will reach near or full recovery by the end of this year. Such news is music to the ears of retail, restaurant, grocery, and gasoline marketers, who will be looking to not only lift sales but also increasingly adapt to a privacy-led world.

Third-party data is going to evaporate between now and 2023, and the ramifications are huge because much of digital marketing has depended on that intelligence in past years. With that in mind, here are four privacy-minded predictions for brands as they get prepared.

First-party data will be of increasing importance

Industries are moving toward a privacy-led world because of Apple's app tracking change and preparations to do away with cookies, leaving marketers to wonder how they'll be able to run advertising campaigns that achieve strong ROI. As consultancy Deloitte put it: "The end of third-party cookies will be one of the greatest internet disruptions ever seen."

Because of all of that, we will see more and more marketers harness digital platforms that offer first-party data, allowing them to zero in on audiences, personalize messages, and measure campaign performance. About 90 percent of marketers last year said that first-party data was a top priority, and that percentage could grow this year as third-party cookie data goes away.

Purchase behavior will be a crucial shopping indicator

With the transition away from cookies, brands will need to find new and innovative ways to advertise while using available data. Purchase data, therefore, represents an opportunity for retailers, restaurants, grocers and gasoline brands to gain a competitive advantage over rivals.

Purchase data is one of the most accurate indicators of shopping behavior and can be utilized to inform customer preference and likelihood to purchase. Generally speaking, it's why Coca-Cola is using data to understand purchase patterns and other companies soon will too (if they haven't already).

Brands in 2022 will increasingly use purchase behavior, along with other first-party data, to understand purchase intent, informing them how to spend advertising budgets and strengthen the customer experience.

Cash back continues to build momentum

Neural studies have shown that consumers have negative emotions when parting ways with the cash they've worked hard to earn. During the pandemic, with the economy at times in doubt, cash back has become a digital advertising staple for brands such as Walmart, Five Guys, and ShopRite. These brands, for instance, have been offering 5 percent and 10 percent cash back on purchases to show the customer that they care.

Now, as inflation and supply chain problems persist, expect more retailers, restaurant chains, grocers, and gasoline brands to lean into cash-back offers to create greater value for customers who will, in turn, be more loyal because of the pleasant experience.

Further, McKinsey has revealed in a study that immediate gratification, like cash back, results in positive customer experience and creates brand loyalty. This is crucial since it costs five times more to acquire a new customer compared to retaining a current one.

Advertisers further embrace incrementality

During recent years, many brands have begun scratching the surface around the marketing superpower of incrementality, which is a way to measure an event that wouldn't have happened without a particular interaction — such as an ad impression, and that produced the correct outcome, such as a sales conversion.

In other words, incrementality is the measurement of the sales impact of ads. In 2022, brands will move from the early stages of embracing incrementality to it becoming a standard measurement for the most sophisticated marketers.

Thanks to first-party purchase data, location data and other intelligence, brands are zeroing in on how digital ads incrementally influence online and offline sales that otherwise wouldn't have happened.

The desire for brands to measure performance of ad campaigns and their bottom-line business impact is at an all-time high. It's not just about click-through rates anymore — brands need to be able to holistically discern how digital advertising affected a customer's path to purchase.

What's more, brands will have smarter customer data platforms (CDPs) that help them better evaluate incrementality, and as this thinking evolves, more dollars will be spent on digital ad platforms that leverage first-party data. Thanks to such CDPs, the data silos are obstructing marketers' view into sales impact less and less as our digital tools become more sophisticated.

That last point underscores what 2022 will be mostly about for brands: how they adapt to the changing landscape of data will determine how their customer experience evolves, if they acquire new customers, and whether they influence them to become loyal patrons. This shouldn't be seen as a challenge, but a privacy-led opportunity for our industry's savviest practitioners to pounce on.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Ross McNab is President, North America Advertising at Cardlytics.