SAP steps into the cookieless future with AI-driven contextual targeting

Reach versus targeting; which will deliver you better results? It’s one of the oldest problems in advertising - and for many companies it’s about to get a lot more pressing.

The demise of the third-party cookie early in 2023 will make it much more difficult to target online advertising. For mass-market businesses that concentrate on reach, this need not be a big problem. But for those that sell to specialist audiences, things could be very different. German multi-national enterprise software company SAP is one such business.

“Facing the threat of the cookieless future, the challenge of targeting very small but highly specialized audiences will get even harder,” explains Moritz Fisecker, integrated media specialist EMEA at SAP. “We need to find solutions ahead of time.”

That’s not all that’s at stake for SAP. The company sees a chance to establish a competitive advantage in its sector by being prepared for the end of the third-party cookie well before it actually happens. In addition, it was looking for ways to ensure its digital advertising was completely brand-safe and brand-secure.

Finally, the move is important for the way SAP’s brand is perceived. As Timo Steyer, deputy director digital strategy at OMD Germany points out, technology businesses are rarely first-movers in their advertising

“SAP is a business software company, not Coca-Cola, so together we wanted to deliver this first-mover approach to demonstrate we’re really ahead of things ourselves,” he says. “Everything innovative is worth a try for us. We want to be ahead of every other large enterprise in the sector, and we want to have overcome all the hurdles around third-party cookies before next year.”

Contextual targeting – it’s nothing personal

There are three main types of solution jostling to replace the third-party cookie: first-party data, and anonymous identifiers based on that data; interest-based groups, such as Google’s recently announced Topics; and contextual targeting. Of the three, the latter poses the least risk to consumers’ privacy since it doesn’t use any personal data.

Contextual advertising is the oldest form of targeting known to media. At heart, it’s simply placing ads next to relevant editorial content; if you’re a car manufacturer, you advertise on pages about motoring. The big difference in the modern version is the sophistication of the matching of advertising and content. Until recently, online contextual targeting relied on keyword matching.

Now, artificial intelligence (AI) is used to analyze the meaning and sentiment of a web page’s content, then that analysis is used to select which ad to deliver. In the most innovative solutions, that analysis includes video and audio as well as text.

The result is greater relevance and increased brand suitability – not just making sure ads don’t run next to the wrong content, but also that they do run next to the right content.

“Brand suitability is all about increasing the quality of the ad environment,” Steyer says. “GumGum delivers that through AI analysis of the semantics of the page, plus analysis of video, to reduce ad clutter and increase relevance.”

New kid on the block

SAP had already worked with contextual intelligence company GumGum, while Fisecker and Steyer also knew JustPremium, the programmatic rich-media platform acquired by GumGum in August 2021. It was Simon Tritsch, commercial director for DACH at JustPremium, who suggested SAP should trial contextual targeting.

This approach came at the same time as SAP was rethinking its approach to media, as Fisecker explains: “SAP celebrated its 50th birthday recently, and we decided we wanted to behave more like the new kid on the block.”

The JustPremium suggestion came in March. Thanks to SAP’s new approach, within a couple of weeks the project had been approved.

“SAP is a large ship, so this kind of fast turnaround would not have been possible last year,” Steyer says.

The best of both worlds – scale and precision

The product chosen for the trial was an SAP solution specifically tailored for SMEs. The key decision-maker in the buying process for these systems is the CIO, which means the target audience for advertising is small.

“They also have a significantly longer customer journey to undertake than an FMCG buyer would have,” Fisecker explains. “Therefore they need to be accompanied by advertising for a way longer time span and across multiple channels. That’s why defining new ways to locate them is so important to us.”

“GumGum’s new AI targeting means we can combine the best of both worlds; the maximum audience size with the sharp targeting we need,” Steyer says. “Will this hybrid approach mean we get the necessary awareness generation for both SAP and the product?”

To find out, the trial will be measured using traditional brand metrics, pre- and post-campaign.

“We’ll also measure pipeline and sales impact,” Steyer says. “We want to see if an awareness campaign can also drive sales. That’s why it’s about relevance, because more relevant advertising will drive sales.”

Improved brand suitability will also drive increased relevance, Steyer explains: “If interactions with the content increase, we’ll know we’re doing it right.”

Ultimately, Fisecker says, the benefits of the project are two-fold.

“The earlier we start, the more experience we’ll get. We want to create a benchmark for future trials,” he says. “But then, if this experiment works, our new agile media approach means we can commit further resources too.”