(Bloomberg) – Apple Inc. and Google’s initiatives that prevent brands from following billions of consumers are creating a money-making opportunity for advertising companies that have been hit hard by the pandemic.
Google is phasing out third-party online tracking cookies, and Apple is asking app owners to request explicit permission to track users in other company’s apps. The changes are making it harder for businesses to keep up with their every move online, so marketers are designing new ways for brands to find out what consumers are doing and deliver products to them.
This will not threaten the status of tech giants as stewards of billions of consumers, a role that only grows as economic activity moves online. However, this is an opportunity for groups of advertising agencies such as WPP Plc, Omnicom Group Inc. and Publicis Groupe SA to reaffirm their relevance.
Caraway Home Inc., an online kitchenware seller, expects privacy changes to increase the cost of finding new customers on Facebook and reduce the effectiveness of its targeting.
A month ago, Caraway signed an agreement with marketing technology company Impact Tech Inc. to connect with Instagram bloggers and influencers. Impact’s platform will show Caraway how many sales it makes when its products are mentioned, and what type of content is most effective – for example, if an interior design blog generates more revenue than a blog. motherhood focused.
“As customer acquisition on Facebook becomes more and more expensive as these changes unfold, this is one of the most powerful channels going forward,” said Josh Knopman, Director of Growth for Caraway.
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WPP is creating a new unit to help customers make better use of first party data. One of the first customers is Walgreens Boots Alliance Inc., WPP taking data from the retailer’s customer loyalty platforms to develop its media strategy.
Publicis is also taking advantage of Google’s cookie announcement by partnering with advertising technology company The Trade Desk Inc. to offer digital identifiers that give consumers anonymity and the ability to manage privacy preferences, while allowing advertisers to see part of their activity online.
“Already in beta, adoption is really strong,” said Dave Pickles, CTO and co-founder of The Trade Desk. “This Google press release is the best thing that has ever happened to us.”
Ad technology companies that are developing alternative tools to target consumers have seen an increase in demand, especially contextual advertising companies that target ads based on the content of web pages, not who is viewing them.
One such company, GumGum Inc., has just raised $ 75 million from Goldman Sachs Group Inc., with a valuation of $ 700 million, according to a person familiar with the matter.
Companies like BMW AG and Vodafone Group Plc have turned to GumGum for help with recent campaigns. Headphone maker Bose Corp. worked with GumGum to market their sleep headphones on tech websites and target keywords like ‘night’.
“The industry has obviously overused the cookie,” said Phil Schraeder, CEO of GumGum. “Contextual is a good alternative to cookies because it will be there until the end of time.”
Some industry players say the changes will force companies to change the way they engage with customers. Cory Munchbach, chief operating officer of leading data company BlueConic Inc., is going to need a “fundamental overhaul” on the part of brands and publishers.
“This should be good for advertising companies,” said Matthew Bloxham, analyst at Bloomberg Intelligence. “The increased complexity of the business means their services are more in demand by clients, and I think most agencies see that.”
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