The end of an era?
Does performance marketing still work?
The year 2024 marked a decisive turning point in the field of online marketing, particularly with regard to tracking methods. What does this mean for you as an entrepreneur and advertiser?
Traditionally, companies have relied on client-side tracking using "cookies" to analyse the behaviour of users on their websites. However, constantly evolving technology and stricter data protection regulations have meant that client-side tracking is increasingly losing its effectiveness. 37.5% of internet users worldwide block tracking technologies with an ad blocker tool. Users of browsers such as Safari and Firefox (currently 48% market share) have been blocking tracking via cookies for years and providers such as Google (Chrome) will also block this tracking technology next year. As a result, the data collected has been "blurred" at best for several years. From next year, this method of targeting in "performance marketing" will be virtually useless.
Performance marketing is a form of online marketing that aims to achieve measurable results and direct reactions from the target group. Unlike traditional marketing approaches, which focus on visibility and awareness, performance marketing concentrates on encouraging specific customer actions.
In simpler terms, imagine you see an online advert for a product. If you click on the advert and buy the product, performance marketing has achieved its goal. So it's not just about generating attention, but also about generating measurable actions such as clicks, registrations or sales. The great thing about it so far was that the results could be measured precisely across multiple channels, which helped companies to continuously improve their marketing strategies.
The end of client-side tracking: data protection and technological challenges
Client-side tracking, based on cookies and scripts, was the norm in performance marketing for a long time. Companies were able to track user behaviour, analyse their interactions and develop personalised marketing strategies. Data protection concerns and technological developments have meant that this approach has become increasingly ineffective.
Data protection concerns: The introduction of stricter data protection laws, such as the General Data Protection Regulation (GDPR) and similar regulations worldwide, has severely restricted the use of cookies. Users now have more control over their data and have become more sceptical about their online activity being tracked. Browsers such as Safari and Firefox block third-party cookies by default, which significantly impairs the ability to collect data.
Technological challenges: Advancing technology has also led to a rise in anti-tracking measures. Ad blockers and privacy tools are now widely used and prevent tracking scripts from working properly. The combination of privacy requirements and technological hurdles makes client-side tracking an insecure foundation for performance marketing.
Everything will be different in 2024: Faced with the challenges of client-side tracking, companies are increasingly looking for alternative methods to ensure the effectiveness of their marketing efforts.
Server-side solutions
A promising alternative is "server-side tracking". With this method, tracking requests are no longer triggered by the user's browser, but by the advertiser's server. This reduces the dependency on cookies and minimises the impact of browser tracking restrictions. Server-side tracking offers greater data accuracy and enables personalised analyses, regardless of browser settings.
Serverside tracking may sound like a complex term, but in reality it's like a smart assistant for your business in the background. Let's take a closer look:
Normally, when someone visits your website, the tracking is done on the user's side (i.e. on their computer or mobile phone). This is called client-side tracking. Server-side tracking, on the other hand, takes place on the server where your website is hosted.
Why is this important? Well, think about cookies, those little packets of data that are stored on users' devices. Sometimes browsers block cookies or users delete them, which can lead to incomplete or missing data. Serverside tracking avoids this problem because it doesn't rely on cookies.
A simple example: Someone visits your website, clicks on a product and places it in the shopping basket. With Serverside Tracking, this action is recorded directly on the server without the user having to do anything. Even if the user later deletes their history or cookies, this information remains on the server.
Here is another example: Imagine you run an online shop. Someone buys a product via an app, but not on the website. Serverside tracking makes it possible to track this purchase anyway and take it into account in your analyses. It therefore ensures consistent data collection, regardless of how someone interacts with your company.
To summarise: Serverside Tracking is like a trusted detective working in the background, ensuring you get accurate and complete information about your customers' actions without being influenced by cookies or browser settings.
Attribution modelling
Another strategy to compensate for the loss of accuracy due to the limitations of client-side tracking is the increased use of attribution modelling. This is a method of finding out which part of your marketing efforts had the biggest impact on a desired action. It's about understanding the contributions of different promotional efforts on the customer journey that ultimately leads to a purchase or other important action.
Here are two simple examples:
#1: The journey through the ad landscape - Imagine someone first sees an ad on Instagram, clicks on it, then checks out your blog, and finally, after a few days, they come back via a Google search and buy your product. Which advert made the biggest contribution to this? Attribution modelling helps you to find this out so that you know where you can use your marketing resources most effectively.
#2: The email that kicks things off - A person opens your email, clicks on the link, looks at your website, but doesn't decide to buy yet. A few days later, they see an advert on Facebook and then buy your product. Which channel do you attribute the greatest success to? Attribution modelling makes it possible to identify the "hero role" of the email that triggered the first step.
To summarise: Attribution modelling helps you better understand your marketing efforts so you can make smart decisions about how to allocate your resources. It's like the puzzle that shows you which part of your marketing strategy has the biggest impact.
What can small businesses do?
Small companies face the challenge of keeping pace with the changing landscape of performance marketing. However, without large budgets and resources, they too can implement innovative strategies to ensure they are not left behind in 2024.
- Invest in server-side tracking: To become less dependent on client-side tracking, small businesses can invest in server-side tracking solutions. Platforms such as Piwik Pro (https://piwikpro.de) offer a free alternative with comprehensive functions. Implementation is also possible without in-depth technical knowledge.
- Use of attribution modelling tools: Tools such as "Google Analytics"(https://analytics.google.com/) offer functions for attribution analysis. Free courses, such as those available at the Google Analytics Academy (https://analytics.google.com/analytics/academy/), enable small companies to utilise the full potential of these tools.
- Active participation in data protection regulations: The General Data Protection Regulation (GDPR) provides comprehensive guidelines for the implementation of transparent data protection guidelines. The official GDPR website(https://gdpr.eu/) provides resources and information that can help small businesses review and adapt their data protection practices.
- Local Search Engine Optimisation (Local SEO): Google My Business (https://www.google.com/business/) is an essential tool for local businesses. The Google My Business guide (https://support.google.com/business/answer/7107242) helps small businesses improve their presence in local search results.