• March 21, 2022

Google Revamps Analytics to End IP Address Logging

Google today announced that Google Analytics will stop logging IP addresses and the company plans to sunset its legacy Universal Analytics product in a privacy standards overhaul. In its place, Google will introduce Google Analytics 4 (GA4).

Universal Analytics (UA) will be shuttered entirely by July 2023. Its replacement, GA4, will be able to accommodate both web and app data collection and comes with built-in privacy features.

"Universal Analytics was built for a generation of online measurement that was anchored in the desktop web, independent sessions, and more easily observable data from cookies. This measurement methodology is quickly becoming obsolete," Russell Ketchum, director of product marketing for Google Analytics, wrote in a blog post late last week. "Meanwhile, Google Analytics 4 operates across platforms, does not rely exclusively on cookies, and uses an event-based data model to deliver user-centric measurement.

"Google Analytics 4 has the flexibility to measure many different kinds of data, delivering a strong analytics experience that's designed for the future," Ketchum continued. "It allows businesses to see unified user journeys across their websites and apps, use Google's machine learning technology to surface and predict new insights, and most importantly, it's built to keep up with a changing ecosystem."

The biggest change, though, is that Google Analytics will no longer log or store IP address information.

"Google Analytics 4 is designed with privacy at its core to provide a better experience for both our customers and their users. It helps businesses meet evolving needs and user expectations, with more comprehensive and granular controls for data collection and usage," Ketchum wrote. "Importantly, Google Analytics 4 will also no longer store IP addresses. These solutions and controls are especially necessary in today's international data privacy landscape, where users are increasingly expecting more privacy protections and control over their data."

Google Analytics 4 is also being tightly integrated with other Google products, including Google Ads, Search Ads 360, Display & Video 360, YouTube, BigQuery, the Firebase app developer toolkit, the Google Play Store, and AdMob, Google's in-app advertising network.

The moves by Google come as little surprise, given not only that the search and Internet giant has come under a lot of scrutiny for its data collection and sharing practices but also because of heightened concerns worldwide about customer data privacy and increasing legislative action to protect it.

Chris Apaliski, senior director of paid social at performance marketing agency Adlucent, says "There has been plenty of increased pressure on privacy over the past few years, so this is likely the next stage of the privacy revolution."

His view on the impact of Google's moves was dual-sided.

"For advertisers, sunsetting IP address tracking is going to put more of the same pressure we've seen on mobile with Google and Apple's Android and iOS updates. We'lll likely see higher costs with increased difficulty to target their ideal customer to the point of a lower-funnel conversion. There will also be increased scrutiny on the effectiveness of ads and potentially a return to broad upper funnel efforts.

Apaliski also anticipates a decline in digital advertising’s effectiveness, but points out that the move isn';t supposed to happen for another year,"which gives advertisers time to prepare and plenty of time for more server-to-server solutions to roll out.

"In any case, advertisers will unfortunately have to go through another round of budget scenarios to gauge what an additional dip in the effectiveness of advertising may mean on their digital strategy as a whole," he concluded.

Emad Hasan, CEO of Retina AI and former head of data analytics at Facebook and PayPal, says now is the time for companies to act.

"Companies' data and marketing teams that haven't revisited their top-of-funnel marketing data really need to," he says. "With Google's Universal Analytics sunsetting, not only will the existing tracking break, but teams will get new benefits from Google Analytics 4." 

 Among the benefits of GA4 that he cites are the following:

  • The ability to ombine the GA4 data with other customer-level data to get complete journeys;
  • Fine-grained analysis of the full customer journey; and
  • Advanced analytics models to predict the full customer lifetime value early on.

"Making the switch to GA4 now will get you ahead and let you start gathering the historical event-level data that you will need for all of the above later," Hasan adds. "With the digital landscape changing, this is a major opportunity for data and marketing teams to start leveraging their first-party data to create better business outcomes."

It's advice that Ketchum echoes. "Make the move over to Google Analytics 4 as soon as possible to build the necessary historical data before Universal Analytics stops processing new hits," he suggested.

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