GOOGLE CONSENT MODE V2: IMPACTS ON YOUR ROI

The year 2024 is set to significantly advance the enforcement of data privacy regulations, with a notable emphasis on the Digital Markets Act (DMA) in Europe. This legislation introduces stringent measures for major technology firms, particularly those known as GAFAM (Google, Amazon, Apple, Meta, and Microsoft), to ensure they adhere to new privacy standards. A critical requirement under this act, effective from March 6, 2024, mandates these companies to secure explicit user consent for targeted advertising, subjecting them to severe penalties for non-compliance. Google has proactively begun to adapt, launching an enhanced version of its Consent Mode. But what is Consent Mode V2? How should it be implemented, and what are the potential impacts on return on investment (ROI)? We explore these questions comprehensively.

The DMA is designed to dismantle the monopolistic tendencies of tech giants within the European digital marketplace, aiming to restore competitive balance and afford more opportunities to European companies and internet users. Effective March 6, 2024, major internet companies, including the GAFAM group and ByteDance, the parent company of TikTok, are required to ensure that they have obtained and respected user consent for advertising activities. Google, taking initiative, has updated its Consent Mode in December to counteract the potential decline in conversion tracking resulting from consent refusal.

 What is Consent Mode V2?

Consent Mode V2 is a Google feature designed to adjust the functionality of website tags based on the consent status of users. When users decline consent, this tool compensates by modeling conversions and user behavior to maintain and optimize the performance of advertising campaigns. This new version, deployed to comply with the Digital Markets Act (DMA), introduces two significant changes in Google's tracking methodology. Initially, tracking was based on Google Ads and Google Analytics tags; however, Consent Mode V2 incorporates two new parameters: "ad_user_data," which relies on consent for advertising purposes, and "ad_personalization," aimed at remarketing. Thus, Google's Consent Mode V2 enhances data transparency and privacy, offering users greater control over their information.

Google Unveils Two Versions of Revolutionary New Software Platform: Advance vs Consent mode

To implement Consent Mode V2, Google offers two options: a basic version and an advanced version. "We recommend the basic version because it aligns with the recommendations from data protection authorities across Europe. Data collection occurs only after a user has given consent, whereas the advanced version allows for the immediate transfer of consent status information to Google for adjustment and modeling of user behavior," explains Florentin Hild, Data & Analytics Director at Bespoke (part of Qwamplify group).

While the advanced mode provides more precise modeling and conversion rates by gathering signals such as device type, conversion type, country, time, and browser type, it is not GDPR compliant in terms of data collection. Bespoke strongly advises its clients to opt for the basic version, ensuring that no data is collected without user consent. Bespoke's Analytics team provides a comprehensive package for setting up Consent Mode and can also assist with the advanced version's deployment if desired. However, a few prerequisites are necessary: "Ensure you have GTM and Google Ads tags correctly implemented. Our team will then proceed to preview and verify the configuration with a Google Ads consultant," Hild adds.

What are the consequences of Google Consent Mode V2?

For users, Google's Consent Mode V2 allows for the refusal of data sharing across all Google services or only select ones (Chrome, YouTube, Google Play, advertising services, Google Shopping, Google Maps). On the advertiser's side, if Consent Mode is not implemented before March 6, 2024, the performance of campaigns within the Google ecosystem will suffer due to the inability to refresh targeting audiences, directly affecting ROI. The tool enables the recovery of lost conversions by sending signals to Google, with the company claiming an average recovery of up to 65% of conversions. As the end of third-party cookies approaches and conversion measurement becomes more challenging, advertisers not in compliance with new standards will find it difficult to manage Google Ads campaigns effectively, highlighting the importance of considering alternatives such as server-side tracking.

Ensuring the correct implementation of Consent Mode is crucial to avoid mistakes, as Hild emphasizes. For instance, websites need to check that the HTTP request sent by Google Ads when tags are triggered includes the correct Consent Mode parameters. This task requires technical expertise, particularly with tracking and GTM, and should not be delegated to individuals who are not sufficiently knowledgeable in these areas.

As Google adopts Consent Mode V2 in response to European legislative changes, other platforms affected by the DMA are expected to follow suit. Meta, for example, has announced the forthcoming launch of additional tools for businesses. "In the next few weeks, we'll provide more details on user updates, especially regarding information sharing across Meta services and platforms. These updates complement our subscription service launched in November 2023 to comply with regulatory requirements," the platform stated.

User tracking is a significant concern this year, with the introduction of Consent Mode V2 marking the first step and the elimination of third-party cookies representing the next phase. This process has already started, with Chrome beginning to phase out third-party cookies for 1% of its users in early January. Qwamplify Nordics encourages businesses to consult with our Analytics experts to implement the latest version of Consent Mode before March 6, 2024.

Qwamplify Nordics is together with Bespoke part of Qwamplify Group, collaborating closely together and ensuring a cohesive approach to digital analytics and privacy compliance across different markets.