How Ad Tracking Works in a Privacy-Focused World

Jessica is a Google Analytics certified Digital Video Analyst at WebFX. She has created over 100 videos for the WebFX YouTube channel (youtube.com/webfx) in the last two years. Jessica specializes in video marketing and also loves content marketing, SEO, social media marketing, and many other aspects of digital marketing. When she's not creating videos, Jessica enjoys listening to music, reading, writing, and watching movies.

In this video, Dan from the WebFX Marketing team will tell you how ad tracking works and explain some changes that are happening in the advertising industry. You’ll be extra prepared for your next digital campaign. 

Transcript: 

Advertising tracking is changing in a pretty major way, and it will impact how you reach your audience online. I’ll tell you more about this in just a bit, so keep watching to learn more. 

What is ad tracking?

In its simplest form, ad tracking means gathering information about how people are interacting with your digital ads. 

With tracking in place, you can measure things like impressions (which are how many times your ad loads on people’s screens), clicks, and conversions.

Ad tracking leads to more targeted advertising since you have deeper insights into your audience’s behaviors, interests, and more data across the web. This data helps you create ads with messaging tailored to the people who are most likely to invest in your products or services. 

You can stop spending money on unqualified leads and shift more of your ad spend to focus on people who actually want what you sell.

So say I’m adopting a dog, and I read an online article from a pet store about how to make your new dog feel at home. I see some products in the article and go to a product page, but I don’t buy anything. Later, I land on a different website that allows ads and see a display ad featuring one of the products I looked at on the pet store website. 

I am actually in the market for dog supplies, so the pet store is spending money on someone who really needs their products.

I’m going to talk about the different ways you can use ad tracking and how it will change in the future, so don’t go anywhere. 

How ad tracking works: Old and new methods

At the time of making this video, common ad tracking methods include:

  • URL tracking
  • Tracking pixels
  • Cookies

With a move towards more privacy on the Internet, those methods are expected to change in the future. But let me give you an explanation of each method before I dive into the updates.

URL tracking

With URL tracking, you take a regular URL and add custom parameters to the end, so you can track results back to a specific campaign. 

You can use a tool like Google’s Campaign URL Builder to create a custom URL that works with Google’s analytics platforms. 

Tracking pixels

A pixel is a tiny bit  of code you add to your website in order to track people’s online behavior, including site visits and conversions. 

Pixels are popular among social media platforms as a way to help advertisers reach the most relevant shoppers. 

There’s the Facebook Pixel, the LinkedIn Insight Tag, and a Twitter Website Tag, just to name a few. 

Cookies

Cookies are little files that remember your information online. Like pixels, they can be used to track your online activity.

Cookies can serve different purposes. Some may exist to remember what’s in your shopping cart while you browse a website, while others may actually be for ad tracking. 

Either way, two types of cookies you should know about are:

  • First-party cookies
  • Third-party cookies

First-party cookies come from the website you’re on. They allow the business behind that website to gather analytics about users and remember information like login details and user preferences.

Third-party cookies come from somewhere outside of the website you’re on, like an advertising platform. These advertising cookies can track your behavior while you surf the web. They help businesses craft ads specific to their target audiences based on what they’ve done online.

Learn More About First-Party vs. Third-Party Cookies

I know I’ve been teasing some information about how ad tracking will change, so here it is.

First, let’s start with Apple. With its iOS 14.5, iPadOS 14.5, and tvOS14.5 updates, users need to give apps permission to follow their activity across the Internet. This impacts apps like Facebook, LinkedIn, Twitter, and really any others that rely on tracking for digital ads. The company has also made the move to block third-party cookies on Safari, its web browser. 

Second, Google. They actually plan to stop supporting third-party cookies in their Chrome browser, which is pretty significant since Chrome holds most of the global browser market share

Instead, Google is looking into new, privacy-focused ad targeting options, which may include its shift to targeting based on consumer interest — not individual behavior. One example of this is Federated Learning of Cohorts, or FLoC, for which Google ran trials, though it’s not certain if FLoC or a different technology will usher in this new wave of privacy-conscious advertising. 

As always in the digital world, things will continue to change in the targeted advertising industry as ad platforms find what works best. 

All of these big changes make collecting first-party data essential to your digital ads. First-party data is gathered directly by your business and can come from many different sources. Just to give you a few examples, you can get first-party data from: 

  • Contact forms on your website
  • Reward programs
  • Email newsletter signups
  • Gated content downloads
  • Purchases

This is your data, so you’re not as limited by what other advertising platforms do. 

This is all a lot to process, I know. And, as I said, what actually happens with ad tracking in the future is still up in the air. Just keep your finger on the pulse (or let us do it for you) to make sure your business is ready for whatever the advertising world throws at you. 

To keep up with the advertising industry and everything digital marketing, subscribe to our email newsletter — Revenue Weekly — and our YouTube channel.

Happy advertising!

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