Advertisers Pivot in the Face of Data Privacy Initiatives

Advertisers Will Find a Way

Internet privacy concerns have companies like Alphabet (GOOGL) rethinking what practices should be permitted on its Chrome browser. The tech giant has plans to remove third-party cookies, which are used by advertisers to track users.

As it becomes increasingly difficult to get shopper’s attention, the marketing industry is reconsidering its strategy. One approach involves using “first-party data” collected from direct dealings with consumers. Retailers then share this data with advertisers who can customize ads to shoppers.

Media Networks

Media networks are being created by companies such as Walmart (WMT), DoorDash (DASH), Kroger (KR), and CVS Health (CVS) to facilitate the sharing of consumer data. This has the potential to be big business — net ad revenue is expected to grow by about 50% from $41 billion in 2022. Amazon (AMZN) will rake in 77% of these sales.

However, even smaller players see profit potential given the growth rate and size of the high-margin industry.

Marriott Goes All In

Marriott (MAR) is one company that is getting on board with the media network system. In partnership with Yahoo Inc, the hotel chain will use data on its customers to facilitate advertisers’ target marketing. Guests will eventually see ads popping up on the hotel’s website, TV screens, Wi-Fi, and common areas.

The travel industry provides marketers a way to reach consumers who have unique needs when away from home. It may also help them identify luxury travelers whose upscale tastes may extend to other product purchases, such as cars. Loyalty membership programs also have the potential to provide rich hunting grounds for advertisers, as Marriott’s program boasts 164 million members. In the search for consumer data, innovation is needed.

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