Cookies Crumble, Conversions Plummet: The Journey Back to Peak Performance
We often point fingers at external factors like economic recessions, inflation, or global pandemics for low conversion rates. However, one real perpetrator is lurking within our digital advertising ecosystem: addressability.
- The blocking of third-party cookies by browsers and new privacy laws have reduced the addressable audience that brands can reach using traditional retargeting methods to about 30%.
- Brands must comply with new privacy laws set to take effect in 2023 like the CPRA, VCDPA, CPA, UCPA, and more.
- To overcome the challenges of a shrinking retargeting audience, brands must shift their focus towards first-party data.
- The first-party data most brands collect tends to be outdated, leading to wasted marketing efforts.
- fullthrottle.ai helps brands build real-time first-party data audiences from their website traffic, offering a solution to the addressability problem.
Challenging the Status Quo
For years, businesses have relied on retargeting to convert prospects into customers. Retargeting has always been the highest performing audience, helping businesses re-engage visitors who have interacted with their brand. But a recent article by Bill Parlaman, Chief Experience Officer at fullthrottle.ai, paints a grim picture.
Due to the depreciation of third-party cookies, brands can now only retarget around 30% of their audience using traditional methods. The rest, dubbed the “Unreachables,” remain a missed opportunity, leading to a considerable dip in conversions.
The Real Problem: Loss of Addressability
According to the State of Data report from the Interactive Advertising Bureau (IAB), third-party cookie deprecation, primarily instigated by strict data privacy regulations and actions by platforms like Apple and Firefox, has led to a massive 50–60% loss of signal fidelity from third-party identifiers. With Google's planned deprecation of third-party cookies in 2024, this issue is only set to grow. Device ID, another pivotal part of adtech, is now hovering around 20%. These developments have led to total addressability dropping to a meager 30%.
The Numbers Don't Lie
Our diminishing retargeting capabilities translate to a steep fall in conversion rates and subsequent revenues. Retargeting makes it 70% more likely that previous visitors can be converted into paying customers, and can result in a 147% increase in average conversion rates. Losing over half the audience that brands previously had access to for retargeting has undoubtedly led to declining conversion rates and, consequently, dwindling revenues.
Looming Privacy Law Changes: Are You Ready?
As if the current challenges weren't enough, the landscape is set to change again this year, with five new state omnibus privacy laws coming into effect. These laws, passed by California, Colorado, Connecticut, Utah, and Virginia, could further alter the adtech ecosystem and impact brands' marketing strategies. The laws generally apply to organizations that meet certain revenue thresholds, process specific volumes of personal data, or derive significant portions of their revenue from personal data.
The Future of Adtech: First-Party Data
In the wake of the collapsing third-party data ecosystem, first-party data has emerged as a savior. Brands need to shift their focus to capturing and leveraging data from their known (logged-in) first-party audiences and the significant portion of unknown (not logged-in) first-party audiences, which constitute around 80% of publisher audiences. The IAB estimates suggest that up to $10 billion of sell-side annual revenue is in jeopardy due to the loss of third-party cookies and identifiers, further underlining the necessity to pivot towards first-party data.
The Urgency of the Situation
The AdTech industry's transformation isn't a distant threat—it's happening now. With the already-occurring deprecation of third-party cookies and the increasing scrutiny on data privacy, brands urgently need to reevaluate their marketing strategies. At the very least, brands must swiftly supplement their marketing efforts with first-party data.
The Solution: fullthrottle.ai
Enter fullthrottle.ai—an end-to-end, first-party data-powered technology platform that can help your brand navigate this changing landscape. fullthrottle.ai helps brands identify and resolve website visitors into first-party addressable households of real, in-market leads. Not only does it help in capturing and nurturing leads, but it also provides crucial insights into audience interaction, helping brands optimize their marketing strategies.
The time to act is now. As the industry shifts towards a first-party data-centric environment, brands need to make the switch to stay relevant and continue their growth trajectory. With fullthrottle.ai, you're not just investing in a solution for today, but preparing for the future of adtech. Book a demo and let's get started on regaining control over your lost audiences and boosting your conversion rates.