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McKinsey partner shares advice on data privacy and media advertising

By L. Carol Christopher

INMA

Pleasant Hill, California, United States

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How news media companies will create a value exchange beyond third-party programmatic is a topic on the minds of many industry leaders.

“Before cookies, the Web was essentially private, Kabir Ahuja, partner/Media & Entertainment and High Tech Practices at McKinsey & Company UK, told attendees at during the third module of INMA World Congress of News Media on Tuesday. After cookies, the Web becomes a space capable of extraordinary monitoring.”

Kabir Ahuja, Partner, Media & Entertainment and High Tech Practices, McKinsey & Company UK, shared these six thoughts for news media publishers.
Kabir Ahuja, Partner, Media & Entertainment and High Tech Practices, McKinsey & Company UK, shared these six thoughts for news media publishers.

There are both positives and negatives from that.

“In a recent McKinsey survey, 41% of consumers said they don’t want advertisers to use tracking cookiesm,” he said, yet the value exchange is actually quite high. Consumers find value in the features they get.

Privacy changes will, of course, have a profound impact on the digital advertising industry in these ways:

  • In 2020, Google Chrome announced the pending elimination of the third-party cookies while Apple announced pending changes to IDFA, driven partly by a desire to ensure a consumer’s right to privacy.

  • Browser-based display retargeting market on the open Internet is expecting a 2022 “cliff” of 40% to 50%, upon Chrome cookie depreciation, as marketers pull spend out of retargeting when performance declines.

  • Some of these ad dollars (US$152 billion) will likely shift to other walled gardens while some will be redirected to other performance media solutions, e.g. probabilistic, contextual, Retail Media Networks.

  • These will have a clear and profound impact across the ecosystem for advertisers, publishers, agencies, and data companies that will need to create confidence in cookie-less solutions’ ability to drive comparable performance.

Yet, the digital advertising industry has an unprecedented opportunity to re-invent itself, Ahuja said.

Four big opportunities for media companies as they reinvent their advertising strategies.
Four big opportunities for media companies as they reinvent their advertising strategies.

Those opportunities include: 

  • Clear opportunity for advertisers and publishers to redesign their customer experiences with a real value exchange where the consumer’s consent is the result of a consumer experience, not the objective.

  • Data platforms that aggregate knowledge on permissible use of consumer data across devices and platforms will become the new utilities.

  • Advertisers will reapproach media allocation to drive a full-funnel data-driven program while innovating in new addressable media channels such as Retail Media Networks.

  • The marketing and advertising technology stack needs to be reinvented or built further and be comprised of solutions such as ID mapping, clean data rooms and CDP.

The failure mode, Ahuja said, is doing nothing in the next 12 months since nobody really knows what’s going to happen. His advice:

  • Start down the path to give yourself the ability to act and go forward. 

  • Expect to experiment and learn during this period. 

  • Look at the most likely scenario in order to plan for the future if privacy regulation becomes more strict.

The World Congress continues Tuesdays and Thursdays through May. Register here for future and recordings of past sessions.

About L. Carol Christopher

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