David Dobrowsky, Head of Competence Center for Marketing at FHWien der WKW, on the opportunities for personalized advertising through advancing digital transformation and how data protection and users are putting a stop to it.
We step out of the house onto the street, our retinas scanned: With each additional step, a new advertising face addresses us directly by our first name and advertises products that match our need profiles. How far are we from this familiar image from science fiction movies? David Dobrowsky, Head of Competence Center for Marketing at FHWien der WKW recently gave a guest lecture at MCÖ (Marketing Club Austria) on this topic, namely hyperpersonalization. We asked him for a contribution.
Personalization in marketing – new old hat
Personalized marketing is actually nothing new. However, technological developments in recent years in the areas of artificial intelligence, machine learning, data mining and also at the level of CRM tools offered on the market have resulted in significantly expanded possibilities. Hyperpersonalization therefore stands for the measures that fully exploit these possibilities. In doing so, digital advertising subjects or e-mails can be personalized as well as the entire content of landing pages or even product prices.
However, there are also limits to hyperpersonalization. On the one hand, there are the legal framework conditions, which are clearly defined, for example, in the General Data Protection Regulation or on the basis of fair trading law, and on the other hand, there are ethical aspects, such as the issue of discrimination against target groups or people who are not economically interesting for companies.
Personalization-privacy paradox: Only transparency works
Scientific studies on personalization and the personalization-privacy paradox show that people are only positive about personalization if they expect it to make their lives easier and bring them benefits. At the same time, there are major concerns about data security. Study results suggest that if companies make personalization measures visible and transparent, they will not only be better accepted by users, but will also be more effective.
The end of third-party cookies from 2022 (at the latest): Programmatic advertising – what’s possible?
Third-party cookies are currently a common means of serving users individual ads on the advertiser’s website. In this process, third-party providers (advertising network) store small code snippets on the user’s local computer during website visits and make their usage behavior (page visits and interactions with websites) measurable. This data is then used to identify these users again and to personalize advertising subjects or website offers for them.
Many Internet browsers and mobile device operating systems already block third-party cookies, and by 2022 at the latest, they will no longer be allowed. Google, for example, has already announced that it will block third-party cookies from that date and will now track user behavior itself via its own browser – a business model that will further strengthen the market power of the world’s largest Internet corporation. To prevent this, the industry is currently looking intensively for alternatives to be able to continue programmatic advertising. It remains to be seen whether cookie-free alternatives such as fingerprinting or data generation through login IDs or user accounts can prevail against Google’s market power. However, data protectionists will certainly continue to be concerned with the issue of user tracking even after the end of third-party cookies.
Do you like to learn more about this topic? David Dobrowsky, Head of Competence Center for Marketing at FHWien der WKW, is at your disposal:
Dr. David Dobrowsky
Head of Competence Center for Marketing
Tel.: +43 690 40 476 018
david.dobrowsky@fh-wien.ac.at