This promoted content is produced by a publishing partner of Open Mic. A paid-for membership product for partners of The Drum to self-publish their news, opinions and insights on thedrum.com - Find out more
Why brands need to act now to stay ahead of the curve with ad targeting
March 24, 2022
When it comes to targeting and consumer engagement, third-party cookies have remained the cornerstone of data-driven advertising for years. But that’s all changing. Apple’s restrictions on in-app tracking and the news that Google will end support for third-party cookies in 2023 mean that targeting users will become more challenging for advertisers. The emergence of cookieless data, which is a combination of first-party data and contextual targeting, represents a major opportunity to keep advertising on the right track while respecting the privacy of users. But what other trends will help the future of ad targeting?
According to Statista, the global spend on programmatic advertising in 2021 was estimated to be $155 billion. Further, a survey by ALFI revealed that 49% of senior advertising executives expected that spending on programmatic advertising will increase significantly over the next three years.
Programmatic advertising uses algorithms to match ad content with the right audience. This allows for instant tracking and adjustments, and the system can be adapted to match the needs of a specific brand or audience, which can help increase the ROI of marketing efforts across all channels.
Automated bidding is one of the most valuable benefits of programmatic advertising. It saves advertisers time and money and produces rich data in real-time. This enables advertisers to target their audience more precisely and choose which ads to place on different sites.
The underlying data can also efficiently help to scale ad campaigns. Agencies and brands use the demand-side platform (DSP) and supply-side platform (SSP) to choose which ads to buy. These platforms are an essential tool for any successful programmatic ad campaign. Inside Intelligence’s eMarketer ‘Ad Targeting 2021’ report states that year on year growth of ad tech fees have grown significantly and spending could reach almost $10 billion, which includes every aspect of the programmatic buying process, not just targeting.
In addition to being effective in targeting, programmatic advertising can help brands maximize their marketing budget, and marketers optimize their campaign’s reach. By making use of relevant content and data, the ad campaign can be customized to suit the needs of the specific audience, which, in turn, should ensure higher customer satisfaction.
Although Google’s decision to delay the ending of third-party cookie support until 2023 gives marketers and advertisers more time to devise, test, and integrate new solutions, it also keeps an air of uncertainty around ad targeting’s future.
Yet it seems that many data sets used by advertisers to identify, segment, target audiences have yet to change.
According to LiveIntent’s research from December 2020, ‘Third-Party Cookies and Identity’: “almost eight out of ten US marketers and publishers were still relying primarily on third-party cookies.” The eMarketer report goes on to state that even as late as June 2021, ad tech executives believe “advertisers will be transacting on cookies until the day they can’t anymore.”
What is looking likely is that in the cookieless future, since access to third-party data will be limited, any user data that will help advertisers improve the efficiency of ad personalization will be priceless.
Advertisers may implement features that allow them to collect, consented, zero-party data, such as adding products to favorites or creating surveys.
Additionally, owners of first-party data will be able to use this as a replacement for third-party data sets to build custom audiences. This will include four types of data sources:
- Contextual data - targeting based on the consumed content of pages and articles
- Behavioral data - data based on the premise that the ad is relevant to the user visiting the page, not the page itself
- Identity providers - methods based on 1:1 user identification that uses a unique identifier derived from personally identifiable information, e.g., email address
- FLoC (Federated Learning of Cohorts) - a brand new approach based on Google's Privacy Sandbox that groups people with similar browsing behavior in a group that can be then be targeted
Data sets and targeting techniques will change dramatically in the next few years as new proposals get adopted.
Connected TV advertising
The appetite for video content is insatiable. Demand is growing, so is it any wonder that Connected TV (CTV) is among the fastest-growing ad streams, according to the eMarketer report, with spending predicted to reach $13.41bn, and mostly all on video ads? Additionally, “just under 70% of CTV video ad spending will be transacted or fulfilled via automation, giving advertisers the greatest targeting opportunities.”
However, CTV ad targeting still has a few challenges to be overcome including:
- Fragmented inventory across many suppliers
- Measurement - although goals may be the same for both linear and CTV ads, they don’t use similar targeting or currencies for measurement
That said, many ad tech firms are already working on solving these issues, so by the time cookies are switched off, CTV will look a much more attractive prospect.
This new technology will offer advertisers a new and easy way to reach a target audience through their smart, internet-connected television sets that consumers use to stream entertainment from YouTube to video games.
It will enable marketers to leverage consumer data and create custom commercials that speak directly to their target audience at the right time. These types of ads can also be used to enhance brand awareness and may be a more cost-effective form of advertising.
How can brands prepare for tomorrow today?
The withdrawal of third-party cookies is already underway, and although it will take some time to fully mature, brands and advertisers need to be proactive now to prepare for this new reality.
Some ad tech companies, including RTB House, are already ready for the cookie switch-off and others have an additional two years to test and refine their approaches.
Agencies need a strategic approach to the future and should include being open to working with more options than they do now. They also need to help brands ditch old habits and ways of working by seeking out and testing new solutions, technologies, and approaches to ad targeting without cookies, sooner rather than later.
This, of course, will ensure that when the day comes when cookie data cannot be used, brands will be in the best position to ensure their online visibility doesn’t drop.
How RTB House can help with ad targeting
Our proprietary artificial intelligence engine and deep learning algorithms have been working hard since 2017. We actively use deep learning algorithms in 100% of our campaigns, and to date, it has been used in more than 3,000 campaigns in over 70 markets, delivering for some of the world’s biggest brands and over 270 of the most renowned media agencies.
To discover how you can benefit from our expertise, and how our approach can help you get the most out of your ad targeting campaigns in a cookieless future, contact RTB House today.