What Businesses Need to Know about the Google Ad Changes for Data Privacy and Enhanced Conversions Google is capable of collecting mountains of pertinent data, but users are increasingly concerned about their privacy.
By Baruch Labunski Edited by Russell Sicklick
Opinions expressed by Entrepreneur contributors are their own.
Concerns about privacy, coupled with advertisers' desire for information, present quite a quandary for Google. How have the powers that be at Google responded? Well, it's complicated.
In May of 2021, Google announced new privacy controls for users intended to let people determine who has access to their data. Users gained the ability to delete the last 15 minutes of their search history, and new password management was introduced as well. For years, third-party cookies had been used without user permission, or even knowledge, to track activity, collecting valuable data, but the war on third-party cookies is successfully drawing to a close. As companies begin to deploy their respect for user privacy as a selling tool, and as regulators look more carefully at how data is collected, used and sold, Google jumped into the fray with these new privacy controls.
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But Google sells ads. Lots of them. And advertisers need to be able to determine if their ad buys are worth the expense. Advertisers want to have the means to track what Google users do after viewing an ad, something that's complicated by Google's phasing out of third-party cookies and by implementing privacy controls for users.
The solution? Enhanced conversions.
To understand enhanced conversions, we need to explore a few concepts. First, a conversion is when a customer does something you want after viewing your ad. They might fill out a form with valuable information that enables you to launch their customer journey. They might make a purchase. Google Ads defines a conversion this way: "An action that's counted when someone interacts with your ad or free product listing (for example, clicks a text ad or views a video ad) and then takes an action that you've defined as valuable to your business, such as an online purchase or a call to your business from a mobile phone." Basically, a conversion means your ad did its job.
How do you know if you're getting conversions? You do conversion tracking. How does that work? Google explains: "You add a conversion tracking tag, or code snippet, to your website or mobile app code. When a customer clicks on your ad from Google Search or selected Google Display Network sites, or when they view your video ad, a temporary cookie is placed on their computer or mobile device. When they complete the action you defined, our system recognizes the cookie (through the code snippet you added), and we record a conversion." Google then provides sophisticated analytics of your conversion data, allowing you to see, for example, your cost per conversion, conversion rate and value per conversion.
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So you can buy an ad and understand what people do after seeing your ad. With me so far? A problem arises, though, when users take advantage of Google's new privacy controls. Users can opt-out of certain cookies that enable conversion tracking.
If a customer has opted not to allow cookies that track their actions, Google has an innovative solution, and that's how we get to enhanced conversions. Enhanced conversions require first-party data, like name, email address, home address or phone number. Customers of your site provide that information to you as part of the conversion, but they can opt-out of having that information used for marketing purposes. In that instance, your conversion tracking tags collect the data, hash it (basically a form of encryption that anonymizes data,) and then pass it to Google for analysis. Your Google Ad analytics can then reflect aggregate, anonymized conversion data. Vidhya Srinivasan, VP/GM of Buying, Analytics and Measurement for Google Ads, explained: "We're here to help you succeed in a world with fewer cookies and other identifiers with new ways to respect user consent, measure conversions and unlock granular insights from your sites and apps." It takes a while for enhanced conversions to begin to work once you've set them up. Google will collect data for up to 75 days before you'll have access to the enhanced insights.
It could be a nightmare to try to navigate data collection and analysis while respecting users' privacy choices, so Google introduced Consent Mode, which automates the process. You can also use Google's Tag Manager, which makes it much simpler to manage the bits of code required to collect and track customer data.
And there are more exciting developments just around the corner. As more users opt-out of having their data collected, it may become increasingly challenging to gain access to the valuable analytics that let you determine the success or failure of a given advertising effort. Vidhya Srinivasan explains: "Soon, we'll extend Google's advanced machine learning models to behavioral reporting in Analytics. For example, if there is incomplete data in your User Acquisition report due to cookies not being available, we'll now use modeling to help fill gaps for a more complete view of the number of new users your campaigns have acquired."
It's not only possible to get conversion data while respecting user privacy; it's necessary. Make sure your tagging infrastructure is sound and that you're using Consent Mode to take advantage of the automation Google provides. Understanding your customer journey is vital, and enhanced conversions can help you gain additional insight.
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