Digital advertising is quickly approaching a turning point.
Third-party cookie deprecation will be a reality, leaving publishers and advertisers in need of a new paradigm for targeting consumers and measuring campaign success. A recent survey conducted by IAB Europe cited that 40% of respondents felt their company wasn’t prepared for cookie deprecation.
While the full implications of a truly cookie-free ecosystem are not fully understood, advertisers and publishers have much to consider. Advertisers need an alternative to third-party cookies, one that will allow them to scale their campaigns and drive efficiency.
For their part, publishers are seeking ways to leverage their first-party data, and to work more closely with their buyers as targeting and measurement strategies evolve.
What does the future hold? Which solutions and strategies hold the most promise?
To find out, DoubleVerify surveyed 300 publishers and 300 advertisers from across the globe to assess where there’s common ground, and where there is still work left to do. Here are some of the things they learned.
Everyone Agrees First-party Data Is Valuable, but Whose First-party Data Isn’t Clear
First-party data is widely seen as central to success in a post-cookie world. Some 94% of advertisers say the first-party data they collect and can activate is either moderately or very important moving forward.
Publishers also have a favorable view of first-party data, with 40% viewing it as the most promising replacement to cookies. They see their own first-party data as particularly valuable, as they’re the ones who interact directly with their end-users. What’s more, publishers believe their data is wholly unique, which means their audiences are also unique.
Advertisers, it must be noted, agree that publisher first-party data is valuable, with 76% of buy-side respondents indicating that they will only work with publishers that have some kind of first-party data offering.
And yet, despite the strong agreement with regards to the value of first-party data, neither side thinks much of the other’s data quality. Only 13% of advertisers say publisher first-party data is promising, and 18% of publishers say the same about advertiser data.
Why the disparity in quality assessment?
“I think the friction comes down to key questions that each side must struggle with, like how does one go about activating first-party data at scale?” explains Pieter Mees, VP of Video and Publisher Product at DoubleVerify. “Buyers want to apply targeting across a reasonable amount of traffic, as they can do when partnering with social media platforms. That’s a lot harder to do with individual publishers. The industry lacks a unified taxonomy and methodology that can be applied across a large swath of inventory that is available, the way third-party cookies can.”
In other words, using a publisher’s first-party data becomes a scale and optimization exercise, with buyers questioning whether it’s worth their time to define a dedicated targeting strategy based on the data available from a single publisher.
“Knowing how to operationalize publisher data is a big question that must be answered before first-party data can truly replace third-party cookies,” Mees said.
Taxonomy standardization is a worthy goal for the industry to work towards. Once we can normalize publisher data into a standardized taxonomy, buttressed with accredited methodology, we can create a strategy that’s trusted by all parties in the ecosystem. Standardization will lead to highly granular first-party data that spans thousands of publishers and — not for nothing — is far more accurate than third-party behavioral data ever was.
Role of Private Programmatic Deals
How do advertisers and publishers align more closely when first-party and quality data play a larger role?
Nearly 45% of advertisers said that private marketplaces (PMPs), programmatic guaranteed (PGs), and programmatic direct deals are the best options for targeting in a cookie-free world. In such cases, buyers can bring their own influence into the inventory selection process by applying buy-side targeting strategies driven by their own data.
Publishers largely agree, with over 45% of respondents highlighting the increased potential for successful PMP and PG deals.
“These forms of programmatic deals have historically been a strong revenue stream for publishers; the prospect of additional media dollars flowing to these types of deals is likely driving publisher optimism around cookie deprecation. An overwhelming 88% of surveyed publishers believe that direct relationships will become more important once cookies are sunset,” the report states.
A New Look at Contextual Targeting
Another cookie-replacement under serious consideration by both advertisers and publishers is contextual targeting. Some 95% of advertisers and 90% of publishers said they plan to use contextual targeting in 2022.
This shouldn’t come as a surprise. By analyzing the content of a page and delivering relevant ads based on that data, advertisers can reach highly-relevant audiences in a privacy-friendly way.
“We definitely see the future gravitating towards contextual targeting. To begin, the buy-side can activate both in programmatic and direct deals. And sellers can create contextual packages based on contextual data they have available, which they can sell in private programmatic deals,” Mees said.
One of the reasons why both buyers and sellers are taking a second look at contextual targeting is that it takes the consumer’s mindset into account.
In the behavioral targeting era, the industry assumed that a consumer who is a new mom will always be interested in baby clothes and products regardless of the time or place she sees an ad. But we’ve since learned that’s not reality. People who are at work are far less likely to engage with an ad that’s related to their family lives than when they’re unwinding at home after the kids have gone to bed.
Reaching an audience when they’re engaged in specific content is one of the many ills of behavioral targeting that contextual addresses.
Another is the inability to stop targeting people who have already converted or have since moved on. Consumers have long complained about ads that follow them as they move across the internet. But ads that are targeted based on the actual content the user is consuming at that moment in time by definition reach audiences who are still actively engaged with the topic. This fact has the potential to significantly increase the relevancy of the advertising experience for the consumer.
A Hybrid Future
In all likelihood, campaigns of the future will contain elements of first-party and contextual targeting strategies, executed in private programmatic buying models.
Advertisers can leverage insight about their audiences (e.g. moms aged 30-to-40 buy product X) to target a publisher’s readers who are reading about baby products. In other words, it’s possible to create specific PMP audiences based on the seller’s first-party data, while also factoring in the buyer’s data to decide whether or not to purchase impressions.
“We can envision a hybrid model where both sellers and buyers have the ability to layer contextual as well as audience data into the same decisioning process. This contrasts with open programmatic, which did not have many ways to layer in sell-side data, relying instead on third-party or buyer data,” explained Mees.
Interested in reading more? Download the full report here.