The Year Ahead: Digital Marketing in the Age of Privacy

Jan 04, 2023
The Year Ahead: Digital Marketing in the Age of Privacy

Digital marketing playbooks have been turned upside down by recent data privacy changes, mandating an existential shift for fashion brands that once relied on customer targeting tools offered at scale by Silicon Valley’s tech giants. Third-party ad targeting, social media growth hacking techniques and early iterations of loyalty programmes and personalisation had been important contributors to the rise of digital marketing and e-commerce brands.

But a new era has arrived, requiring brands to rethink how they reach new consumers and engage with existing ones. Instead of pushing content to pre-selected groups, as was so effective over the last decade, the key now is to pull in customers with a fast-paced stream of creative campaigns. Once brands have access to valuable first-party data, they can prioritise channels that deliver a strong return on investment and enable them to build deep, long-lasting relationships and foster communities among customers.

The disruption of the digital marketing playbook is a culmination of several years of regulatory and technical shifts that targeted online privacy and security risks. The EU’s General Data Protection Regulation and the California Consumer Privacy Act — landmark laws rolled out in 2016 and 2020, respectively — have given users more agency over their data. Meanwhile, Apple’s iOS 14 software update in 2020 allowed users to opt out of tracking across apps and websites. And as part of its privacy initiatives in 2022, Google plans to discontinue third-party cookie tracking in Chrome, which commands 65 percent of global web browser market share. When given a choice, many consumers are declining tracking: a McKinsey survey found 41 percent of users said they opted out of cookies.

As a result of the tracking limitations, customer acquisition costs have spiked, rising on average 70 percent on TikTok and 39 percent on Meta platforms. In 2022, advertisers spent about $29 to acquire each customer, compared with $9 in 2013. All together, these changes signal a new reality: the era of third-party digital targeting is over. Brands will need to find different ways to differentiate their marketing strategies, broadening their social platform use beyond bottom of funnel ads, and focus on creativity and quality of the customer experience.

Reaching Customers: Content is King
Winners in the year ahead will embrace creativity and experimentation to stand out in the glut of online content. The updated approach will mirror some of the strategies from the golden age of advertising running from the 1960s to the late 1980s, when campaigns competed on creativity and quality to capture audiences. However, the internet requires both a faster pace and a wider range of mediums, particularly video used in multiple ways. The lifecycle of a digital campaign can be as short as two to three weeks before the impact dissipates due to repeated views by users.

To meet escalating digital content demands, brands are looking outside their organisations for creative development and dissemination. As such, influencers are already key partners for many fashion advertisers, with brands tapping their content-creation skills and accessing their loyal audiences. But competition for top influencers can be stiff, as well as expensive. Spending on influencer marketing skyrocketed from $1.7 billion in 2016 to $13.8 billion in 2021. There are also risks involved, particularly if relationships sour or if the influencer is involved in a scandal or controversy. For many brands, though, the rewards outweigh the risks.

In some cases, fashion companies have elevated influencers to brand-defining roles that were once the sole domain of Hollywood stars and supermodels. Hugo Boss, for example, signed a multi-year agreement with TikTok personality Khaby Lame as a global brand spokesperson in 2022. Similarly, YouTube star Emma Chamberlain has appeared in television advertisements, brand campaigns and collaboration for Levi’s since 2021.

Publications also have a new role to play in the content market, extending beyond traditional display and print advertising or old-school advertorials. Their customised features, video series or affiliate marketing links can validate brands and direct readers to e-commerce sites. Brands can also tap the publishing house’s creative teams to produce sponsored projects. Digital streetwear and luxury publication Highsnobiety, for example, has a partnership with Gucci tied to its collaboration with The North Face. A video from the project, released at the start of 2022, featured TikTok star Francis Bourgeois. When Zalando acquired a majority stake in Highsnobiety in June 2022, the e-commerce retailer said the publisher would act as a “strategic and creative consultant” to extend its storytelling capabilities.

In recent years, many fashion companies capitalised on television streaming by partnering with productions for increased exposure. For example, Gucci provided access to its archives and allowed shooting in its Rome flagship for “House of Gucci,” a film directed by Ridley Scott and starring Lady Gaga and Adam Driver, which generated 25,000 posts across news and social media in the months ahead of the film’s release in 2021.

Source: businessoffashion