During its annual Worldwide Developers Conference in June, Apple (NASDAQ:AAPL) management announced a major change was coming: Device users will be prompted to opt into Identity for Advertisers (IDFA) when opening an application. The change is to go into effect in early 2021, buying app developers and advertisers time to adjust — but the change nonetheless upends a primary (and controversial) way businesses monetize their wares and advertisers track the efficacy of their marketing. Alphabet is expected to follow suit and implement similar changes to its Android mobile operating system.
However, this doesn’t mean digital ad tracking is dead. Apple will allow for the collection of data, although device- and user-specific data won’t be revealed. The coming changes will also alter behavior at technology firms and alter the way digital content gets monetized.
This could open the door to growth for those players developing viable alternatives to personal data collection and tracking. Five companies doing just that might be worth a look. They are: Magnite (NASDAQ:MGNI), LiveRamp Holdings (NYSE:RAMP), The Trade Desk (NASDAQ:TTD), salesforce.com (NYSE:CRM), and Adobe (NASDAQ:ADBE). Here’s why these stocks are a better bet for dealing with new digital data privacy standards.
1. Magnite and 2. LiveRamp: Building new platforms based on publishers, not users
Magnite and LiveRamp are at the forefront of changes to targeted advertising. Both platforms help publishers and advertisers transition away from individual activity tracking to a model that uses an anonymous collection of data. Let’s start with Magnite, a supply-side platform (SSP) that is helping publishers scale up their marketing activity using information they themselves are collecting directly from customers.
Magnite CEO Michael Barrett explained that the existing individual identity model is shifting to one powered by publishers themselves, and Magnite is positioned as one of the only SSPs with broad-based publisher relationships and the tools to help them implement more data-friendly practices. In fact, Barrett said on the company’s Q3 2020 earnings call that more than 10% of the revenue it generated for publishers was derived from whole audience segments created on Magnite’s platform directly, compared to almost none a year ago. The company thinks its sell-side data technology revenue will double again by the end of 2021.
However, as Magnite itself has pointed out, first-party consented targeting (in which the user opts in to tracking) will continue to play a part in this new advertising landscape. That’s where LiveRamp comes in. LiveRamp pools first-party anonymized data collected from consumer-facing businesses. The result is a collection of robust consumer data that product and content creators and advertisers can access to make better decisions. Both Magnite and LiveRamp struggled early in the pandemic, as many ad campaigns were temporarily put on hold, but they have since rebounded and continue to forecast double-digit percentage growth through the end of 2020.
3. The Trade Desk: The leading buy-side platform embraces anonymity too
While a sell-side platform helps publishers monetize content, the buy-side of the equation helps those companies looking to market their goods and services find the right outlets (webpages, podcasts, TV spots, etc.) to reach their audience. That’s the role that The Trade Desk plays, and its cloud-based platform to help marketers automate and target ideal customers has soared over the last few years.
Besides enjoying general industry migration to digital channels and programmatic targeted ads, The Trade Desk could also benefit from the switch away from identity tracking. The company recently announced a partnership with LiveRamp in which marketers can now bid and transact on LiveRamp’s anonymous data-driven platform directly on The Trade Desk. The result is campaign personalization and performance tracking without the need for individual device or app activity tracking.
In the years ahead, adding a new level of user privacy, transparency, and control to its cloud-based marketing tech could help The Trade Desk maintain its fast upward trajectory.
4. Salesforce and 5. Adobe: Helping organizations unlock the power of their data
Software juggernauts Salesforce and Adobe have approached digital transformation from different directions — the former from its customer relationship management (CRM) software core proficiency, and the latter from its creative software for content and media producers. But both are finding success helping their customers unlock and make full use of their own internal data.
And in a world where privacy and user consent is rightfully getting more attention, unlocking insights on relationships organizations already have with paying customers will only increase in importance. And Salesforce and Adobe are helping in this regard. While their CRM and content creation competencies remain the primary drivers of growth, both have added buy-side marketing to their cloud-based software suites. It’s been a valuable add-on for both of them. Organizations are deploying their data within the respective platforms to drive better go-to-market and sales strategies, and use of Salesforce’s and Adobe’s marketing tools could get a big boost if other device makers follow Apple’s lead in eliminating non-consented user tracking.
Apple’s first move in removing IDFA won’t be the end of the digital data privacy revolution. More changes lie ahead as consumers demand more control over their personal information and activity — and who’s able to utilize it. But in the next stage of transformation, these five companies could benefit from enabling marketers to comply with the coming user-friendlier adjustments.
This article was originally posted by The Motley Fool.