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Even before the pandemic, changes in CPG advertising were underfoot. Consumer concerns about privacy spurred leading tech companies to reimagine how consumer behavior was tracked across their products. Then, COVID-19 hit. Consumers suddenly began purchasing groceries in larger quantities online. These two converging events will impact how CPG advertisers and publishers find and reach consumers.
Carl Spaulding, executive vice president of strategy at NCSolutions, and Georgi Georgiev, senior vice president of strategic partnerships and product enrichment, sat down virtually to discuss what this all means for the advertising community today.
CARL: There are two major privacy events that threaten to disrupt the digital advertising industry in the near future. First, Apple will be giving users the choice to block the IDFA (Identifier For Advertisers) at the app level as soon as this month, and second, Google will eliminate third-party cookies in its Chrome Browser early next year. Let’s talk a little about the impact of these changes on CPG advertisers. To start, how did we get here?
In recent years, in response to growing concerns about consumer privacy and regulations like GDPR (General Data Protection Regulation) in the European Union and CCPA (The California Consumer Privacy Act), Safari and Firefox have deprecated the use of third-party cookies, leaving Google Chrome as the only major browser to still allow such tracking. Today, Chrome has nearly 65% market penetration, so changes that it makes to its privacy policies will have a major impact on the industry.
Advertisers use mobile ad IDs, such as Apple’s IDFA, in much the same manner for mobile advertising. Apple has the largest share of the U.S. smartphone market, capturing between 40 -65% of quarterly shipments.
CARL: For publishers who are not prepared, these shifts could have significant consequences and will affect their ability to fully monetize their inventory due to lack of data-driven addressability. For advertisers this means that activation and measurement initiatives reliant on third-party cookies or mobile ad IDs will be degraded and they could lose much of the ability to target based on consumer behavior or tie ad exposures to outcomes.
GEORGI: That’s right. And the amount of media spend impacted will be in the billions.
CARL: So let’s talk about what steps NCS is taking to help advertisers and publishers navigate this new environment.
GEORGI: These disruptions, coupled with consumer behavior changes established during the pandemic, nudged us to focus on increasing the breadth and depth of our CPG purchase data.
CARL: We called this data enrichment initiative Project Boost.
GEORGI: Yes, because this project boosts the utility of NCS closed loop solutions by furthering the representation and diversity of the underlying purchase data. The ultimate outcome is greater utility of NCS solutions for our clients.
CARL: What exactly does this mean for NCS data sets? What’s the impact?
GEORGI: We’ve boosted the number of NCS best shopper households by 34% compared to last year. These are the households that shop consistently at NCS retailers and give us the most accurate measure of their purchase behavior. In addition, NCS retail sales dollars are up 37% and our retail stores counts are up over 100% compared to the prior year.
CARL: How will these changes help our clients improve their advertising effectiveness amid continued changes in consumer behavior and ahead of imminent industry privacy changes?
GEORGI: We’re helping to future-proof advertising effectiveness for our clients. Project Boost has added more diversity to our purchase data and expanded its representativeness. One outcome is that we get a more accurate measure of what these households buy. This increases the utility of our data, providing our clients with more options.
For example, NCS Sales Effect measurement study feasibility is primarily based on having a minimum number of exposed buyer households in the sample data. By increasing the count of our best quality buyer households used for NCS measurement by 34%, we can help mitigate future loss of exposure data. That means our clients should not have to give up measuring the sales lifts of most of their digital campaigns due to the impending privacy-related changes.
Another benefit is that as we add more buying households to the NCS Purchase Graph, we have an even better balance between machine learning models and seed data. This makes the NCS Purchase Graph even more substantial and our audience creation even more accurate.
CARL: I’m excited about these changes. It’s clearly a move in the right direction. At NCS, we’ve always supported consumers’ rights to choose how their data is used. In fact, we’ve never collected personally identifiable information(PII). The impending privacy changes are in line with our belief in the consumer’s right to privacy.
For more on pending industry privacy changes and what they mean for your business, sign up for our Future Fit Workshop.
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