Communication transformed by ITP and cookie regulations. What are tech-touch strategies that achieve customer success while respecting privacy?

Have you heard the talk that "targeting and effectiveness measurement will become difficult because cookies can no longer be used"? To effectively leverage the wide range of touchpoints with customers, optimization tailored to each customer's attributes is essential. The key to this is digital behavioral history, including personal information.

However, driven by the global rise in personal data protection awareness, regulations restricting the use of "3rd Party Cookies"—cookies issued by third parties other than the visited domain—are advancing. Among these, the impact of tracking prevention features like "ITP" is immense, forcing companies to change their web-based approaches to customers. How can we balance privacy protection with achieving customer success through tech-touch initiatives? By reviewing the trends surrounding personal information and grasping the fundamentals of tech-touch, we can explore the key points and considerations.

How Will ITP and Cookie Regulations Change Things? The Current State of Web Advertising

Cookies are a mechanism that temporarily stores information about visited websites on a computer or smartphone browser. This allows users to skip entering IDs and passwords on websites they've logged into before and enables the prioritized display of information deemed highly relevant based on user behavior history. Cookies have also been utilized in web advertising to leverage this characteristic, displaying content tailored to user preferences and attributes.

While cookies provide this convenience, concerns about user privacy infringement also exist. Particularly regarding the use of "3rd Party Cookies," which track user behavior across multiple sites, many express discomfort, stating, "It feels like my browsing history and personal information are being shared with third parties without my consent," as seen in banner ads for related products appearing after purchases on e-commerce sites. Consequently, regulations have gradually strengthened in recent years.

ITP: Born from the Trend of Personal Information Protection Regulations

In recent years, awareness of personal information protection has grown, leading to various laws and regulations being established worldwide. Among these, the "GDPR (General Data Protection Regulation)" enacted in Europe in 2018 had a significant global impact. The GDPR is a set of rules aimed at protecting personal information, including prohibiting the transfer of personal data collected within the European Economic Area (EEA), including the EU, outside the EEA. It defines online identifiers such as cookies as personal information and mandates obtaining user consent before collecting them.

Similarly, Japan enacted and promulgated the "Revised Personal Information Protection Act" in 2020 (scheduled to take effect in April 2022). This strengthened regulations, requiring consent from the individual when linking information like cookies to personally identifiable data (such as name, address, date of birth, email address, etc.) or when providing such linked data to third parties.

Similarly, in January 2020, Google announced a phased elimination of third-party cookies in its Chrome web browser, sparking significant discussion.

Furthermore, Apple, a major influencer in the smartphone market, implemented its tracking prevention feature, "ITP (Intelligent Tracking Prevention) 1.0," in its standard web browser, Safari, ahead of the curve in September 2017. ITP prevents unwanted tracking by restricting or disabling the functionality of cookies.

Since ITP's introduction, each version update has strengthened privacy protections, impacting companies that rely on cookies. Then, with the March 2020 addition to ITP 2.3, third-party cookie usage was finally completely blocked across all apps on iOS.

Due to Chrome and ITP 2.3's restrictions on third-party cookie usage, tracking user behavior on the web has become more difficult. Even when delivering targeted ads based on interests or retargeting ads to users who visited your site, traditional methods inevitably suffer from reduced accuracy. This makes solving the challenge of establishing touchpoints in the upper funnel a critical issue.

How can we drive customer success through tech-touch initiatives while respecting privacy?

As the landscape of web advertising evolves, how should companies approach users? To consider this, we first explain "Tech Touch" – the digital touchpoints between companies and customers.

Tech-touch is one approach within "customer success" that guides customers to success through products or services. It refers to leveraging technology to engage a large number of customers with low LTV (Life Time Value). LTV is a metric indicating the total profit a single customer or company generates for a business over the entire period from their first transaction to the end of their relationship. It is generally calculated using formulas like "Average Customer Value × Purchase Frequency × Retention Period."

Within the customer success framework, customer engagement methods are categorized into three tiers based on metrics like LTV: "High Touch," "Low Touch," and "Tech Touch." "High Touch" provides personalized, intensive support to a small number of customers, such as high-value accounts, where LTV is expected to be high. "Low-touch" provides attentive support, requiring a certain level of personnel and effort, for customers who, while not major, still impact revenue. "Tech-touch" primarily uses technology-driven approaches—such as automated response emails, chatbots, owned media, and FAQ sites—to efficiently handle a large, undefined group of customers with lower LTV, like users of low-priced services or those with small transaction volumes.

Tech-touch strategies also include running targeted ads and collecting information from website visitors to inform marketing initiatives. Within this tier, where the impact of regulations like ITP is most pronounced, what considerations are essential to balance privacy protection and customer success?

Utilization of 1st Party Cookies and Alternative Technologies Advances

First, the use of 1st Party Cookies will become increasingly important. 1st Party Cookies are issued directly from the domain of the website being visited and store information like login details and purchase history. Conversely, 3rd Party Cookies are issued from domains other than the visited website, enabling cross-site user tracking. From a personal information protection perspective, the problem lies in information linked to an individual being transmitted without their knowledge. However, with 1st Party Cookies, data remains only on the visited site, so they currently face less stringent regulations than 3rd Party Cookies. Consequently, we will likely see an increase in strategies that actively leverage first-party cookie data to enhance LTV. This includes more meticulous analysis of customer preferences and consumption trends to deliver coupons, discounts, or point rewards at optimal timing.

Furthermore, optimizing digital initiatives within tech-touch is essential. Careful profiling based on a company's service usage history can also make the obtained data usable for both low-touch and high-touch approaches. Designing truly user-centric targeting—such as presenting appropriate information by fully leveraging 1st Party Cookies and attribute information/behavioral history based on registration details—will also contribute to enhancing engagement.

Furthermore, new initiatives are emerging to enhance advertising effectiveness while protecting privacy in preparation for the cookie-less era. A prominent example is "FLoC," developed by Google as an alternative technology to cookie usage. FLoC does not use cookies; instead, it groups user behavioral data based on interests and preferences, then delivers ads to those groups. By targeting based on group IDs, it delivers interest-based ads while respecting privacy, without identifying individuals.

Although development of FLoC itself was halted in January 2022, Google announced a transition to "Topics," a technology that builds on the expertise gained from FLoC while placing even greater emphasis on privacy protection. Topics selects high-interest topics like "Fitness" or "Travel" based on a user's browsing history and shares them with websites and advertisers. Information is stored for only three weeks, after which older entries are deleted. Furthermore, by performing topic selection on the user's own device, the amount of information transmitted to external servers is reduced, making individual identification more difficult.

Thus, alongside changes in cookie usage, services operated by various companies continue to rapidly evolve: refining user understanding and adopting approaches to ad delivery that protect personal information.

Building Trust with Customers Through Tech-Touch Initiatives in the Cookie-Less Era

Moving forward, initiatives like ITP and other tracking prevention measures are expected to accelerate, placing greater demands on companies to implement tech-touch strategies that prioritize privacy protection. While the regulation of previously routine practices like retargeting ad delivery may necessitate challenging changes to marketing strategies, complying with rules and adopting user-privacy-conscious approaches will ultimately contribute to building trust with customers.

Finally, here are two examples of related services for implementing tech-touch strategies while respecting privacy.

Mobile Carrier's Privacy-Conscious Digital Ad Delivery

A major mobile carrier has developed a next-generation digital ad delivery platform that can serve ads highly relevant to customer interests while respecting privacy. By identifying customers using a temporary ad delivery ID issued per website or app visit, combined with the simultaneously acquired IP address, it enables the delivery of highly relevant ads while maintaining privacy.

Data Clean Room Built with Twitter

A data clean room is a data infrastructure enabling digital marketing that balances "delivering a positive customer experience" with "privacy protection" by linking web behavioral data in a non-personally identifiable manner.

The "Twitter Data Hub Omusubi," jointly developed by Twitter and Dentsu Digital Inc., is one such example. It enables analysis by combining Twitter's ad delivery data with a company's 1st Party Data and Dentsu Digital Inc.'s 2nd Party Data (1st Party Data from other companies used with consent). By leveraging publicly visible data on social media, it allows for marketing initiatives that respect privacy. This truly represents a service well-suited for the social media era.

If more services like this, mindful of customer privacy, proliferate, it may become possible to protect customer privacy while simultaneously achieving high advertising effectiveness.

Furthermore, the very nature of tech-touch is evolving. While tech touch is strongly associated with establishing broad online touchpoints, it is also becoming possible to collect customer information in physical spaces like stores and events—traditionally seen as low-touch or high-touch environments—by installing various sensors and RFID tags (technology that reads and writes ID information non-contact via radio waves). Furthermore, the evolution of IoT devices and AI-driven learning and analysis are expanding tech touch opportunities.

Several events have already pioneered privacy-conscious approaches to customer engagement. For instance, some distribute beacons (devices that transmit and receive information via Bluetooth signals) with consent to gather visitor behavior statistics, measuring and analyzing popular areas, dwell times, and interest levels. This movement to acquire data in physical spaces, unlinked to third-party cookies, can significantly enhance the quality of customer understanding and greatly contribute to improving LTV.

Opinions such as "Cookies undermine the reliability of ad delivery" or "Acquiring behavioral data becomes difficult" are not entirely incorrect when viewed from one perspective. However, this is not necessarily the case if we avoid clinging to traditional approaches. Even amid growing privacy protection movements like ITP, it is entirely possible to implement highly effective marketing strategies by leveraging alternative technologies and reevaluating the tech-touch approach itself. Moving forward, actively implementing tech-touch strategies that prioritize privacy protection will likely build trust with customers and ultimately contribute to increasing LTV.