This blog post marks the beginning of a three-part series exploring the digital advertising landscape. In today’s post, we’ll examine the data collection mechanisms employed by ad platforms to deliver personalized advertisements. Future posts will delve into practical strategies and examples to help optimize digital advertising efforts, which are based on the concepts we’ll familiarize ourselves with today.
# The current landscape
The global marketing industry is, and has been, booming. While estimates vary, analysts predict that the market could reach anywhere between $700 billion and $1.2 trillion by 2028. To put that into perspective, the digital advertising market alone is on track to surpass the GDP of Belgium. That’s an immense amount of purchasing power.
A major driver behind this growth is the proliferation of personalized advertisements. Google leads the charge in the ad ecosystem, leveraging their dominance in search engines, browsers and platforms like YouTube to collect enormous amounts of user data. As they have been accused of deploying questionable tactics to collect this data, like gathering user data in Incognito mode through their Chrome browser.
So this begs the question: where does all of this actionable data come from?
# How data is collected
The phrase “If something is free, you are the product” perfectly encapsulates the reality of digital advertising. There is a growing regulatory push around the globe to protect consumer privacy and control how companies store, track and handle personal data. While cookie acceptance banners have become inescapable, companies already employ more key tactics to monitor your digital footprint.
# 1. Cookies: The Foundation
Cookies are small text files that the browser stores on your device on behalf of the websites you visit. These cookies can be placed in your browser by different vendors, which introduces the concept of first vs third party cookies.
First party cookies are explicitly set by the website you are visiting. They are commonly used for the site to remember your shopping cart or login status. They can also be used to track your behaviour across the website.
Third party cookies are created by external parties. When you browse a site (and consent to their privacy policy), code is loaded onto your device from advertising networks and social media platforms. This enables them to store an identifier on your device which they can read when you visit another site that deploys code from this vendor.
Google Analytics is a common third party cookie vendor that tracks user behaviour across its network of websites. Its tracking code sets cookies to collect data like page views and interactions, sending it to Google’s servers. If the user visits another site using Google Analytics, their browsing habits can be linked, helping businesses refine marketing and deliver targeted ads.
# 2. Fingerprinting
Fingerprinting is a tracking method that’s harder to detect and block. It aims to identify and track users across websites and in different sessions.
It works by collecting a variety of data points about a user’s device, browser, and geolocation. While there are virtually endless points that can be tracked, some common ones are:
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Browser and device:
- Type
- Version
- Screen size
- Language settings
- Timezone
- Operating system
- Graphics processing unit (gpu) & processor details
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Your IP address and the approximate location it resolves to.
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Any installed browser add-ons or tools.
By combining all of these factors, fingerprinting creates a unique identifier that can persist even if you deny tracking or clear your cookies.
# 3. Tag Managers
Tag managers allow you to efficiently deploy small bundles of code, referred to as “tags”. These tags are triggered on your website by a specific user event, such as clicking on a product or viewing a page. They have become popular for streamlining the process of integrating user tracking on websites.
One of the most popular tag management tools is Google Tag Manager, though similar solutions are offered by Adobe, Tealium, and others.
Tag managers integrate seamlessly with analytics tools, data warehouses and advertising platforms. This has made it easier to get actionable data from tracked user behaviour. Within minutes you can segment audiences and identify high-value customers for retargeting.
# What’s next
Today we’ve discussed three primary methods of data collection: cookies, fingerprinting, and tag managers. As the digital advertising industry continues to expand, consumer privacy and government regulation is becoming a major concern. Future posts in this series will dive deeper into strategies for optimizing digital advertising efforts while staying compliant with privacy regulations.