Online data privacy constraints are steadily tightening its chokehold on companies everywhere. Not even huge multinational corporations such as Google can stifle the stagnating effects of this suffocating privacy ecosystem. Following an EU privacy violation, Google has had to reengineer its cookie consent framework to let users opt out more easily. In addition to the death of the third party-cookie and an increased consumer awareness over privacy rights, the digital landscape has dramatically changed by way of an entirely new privacy ecosystem.

Advertisers have felt the brunt of these restrictions in their targeting strategies, as it is estimated that failure to find an alternative solution could translate into companies losing over 25% of their collected data. First-party data has never been more important in the digital environment than it is now. By safely collecting and storing this data, companies hold the key to streamline programmatic activation, measurement, and attribution. While this concept is applicable to all companies, it is especially relevant for smaller advertisers who might not have access to the vast amounts of data pools that larger companies do.

Ad personalization in particular has taken a hit due to the new privacy regulations. Companies that invest in personalization are reported to have 40% more profit revenue compared to those that don’t reform their targeting strategies. Consumers take advantage of targeted ads because they prefer to have personalized experiences online. In fact, over 80% of consumers state that they would not interact with a brand’s outreach if it wasn’t personalized. The numbers evidence the simple fact that the ability of personalization to reach consumers is irrefutable.  

Fortunately, an alternative targeting solution that doesn’t use sensitive consumer data exists in the form of artificial intelligence (AI). AI has proven to be an exceptional tool for personalization in the advertising realm. Brands are able to reach scale with speed as the significant load of work is handled by the software and without the collection of sensitive consumer data. Instead, the personalized messages are based on a user’s interest.  

An example of the capabilities of AI is through its use in helping brands stand out in search engine marketing. By combining AI with a natural language generation tool, ads can be expertly tailored to the specific search terms of individual consumers without the need for exhaustive copywriting. The use of artificial intelligence is growing at a remarkable rate and will soon be a critical part of the digital advertising infrastructure.

As with any sudden change in the business world, optimizing budgets remains a necessity. What’s even more crucial is identifying the areas that provide a favorable return on investment (ROI). An excellent way to optimize budget is through good data housekeeping as this keeps data up-to-date and compliant with privacy policies. Tools that uncover inconsistencies, consent management platforms, and Google’s Consent Mode and GA4 allow advertisers to have more granular data control and prevent budget wastage. 

The new privacy ecosystem should not be feared or shunned by advertisers, but instead viewed as an opportunity to welcome innovation in the digital advertising space. As conventional methods of consumer targeting become outmoded, other channels are constantly being created and refined. Companies that embrace such change and efficiently manage data will stay ahead of the curve, limiting budget waste while still reaching their desired audience demographic in a highly personalized fashion.