Rethinking Audience Targeting in a Post-Cookie World

The Deprecation of 3rd Party Cookies is now under way

The ad tech industry is experiencing a seismic shift as the end of the once-reliable cookie is finally at hand. However, the loss of signals doesn’t stop with cookies alone. Apple has already restricted mobile advertising IDs with the AppTrackingTransparency framework, and IP addresses are being safeguarded with iCloud Private Relay. Additionally, Google is preparing for its own initial IP protection beta. These changes are splitting the advertising world into two environments:

• Addressable: Where users can be identified using privacy-preserving methods
• Non-Addressable: Where a user cannot be identified

The Importance of Addressability and the Challenges It Poses

Preserving addressability is of utmost importance, and user log-ins play a key role. Browsers and operating systems are challenging non-deterministic methods that rely on signals like IP addresses, making user log-ins a more reliable solution. However, securing log-ins can be challenging, as evidenced by the fact that 80% of publishers’ audiences aren’t entering emails and passwords, according to the IAB State of Data report. To maximize campaign effectiveness, advertisers need to reach users even when they aren’t logged in.

Embracing the rising trend of non-addressable inventory presents a massive opportunity for advertisers to gain a competitive advantage. Incorporating non-addressable supply into media strategies can offer additional audience reach, lower eCPMs, and access to the same quality inventory as addressable environments. In a market that’s currently less competitive, advertisers can tap into this emerging methodology to maximize their campaign impact.

The Future of Non-Addressable Environments: Four Methodologies

To tackle the challenge of reaching non-addressable audiences, advertisers can rely on a variety of solutions already. Below is an overview of some methodologies that offer promising ways to connect with users in non-addressable environments.

1. Contextual Targeting: A Renaissance for Relevance

Contextual targeting is experiencing a renaissance in the ad tech industry. This approach focuses on delivering relevant ads based on the context of the content being consumed. By analyzing the keywords, topics, and themes of a webpage, advertisers can serve ads that align with the user’s interests and the overall context of their browsing experience. Contextual targeting allows advertisers to reach users without relying on personal identifiers, ensuring privacy while still delivering targeted messages.

2. First-Party Data: Empowering Publishers and Enhancing Control

Buyers are increasingly relying on publishers’ first-party data for audience targeting. This approach involves leveraging deals or seller-defined audiences to execute buys based on the publisher’s own data. By harnessing their own first-party data, publishers can create audience segments based on user interactions on their properties without needing to associate them with a universal ID or reveal the user’s identity to advertisers. This methodology empowers publishers, giving them control over their data and enabling them to provide highly targeted audience segments to advertisers without compromising user privacy.

3. Browsers and Platform Solutions: Exploring New Avenues

Browsers and platform solutions are also stepping up to provide options for reaching non-addressable audiences. Google’s Privacy Sandbox, a highly anticipated solution, has been gathering industry feedback and will soon open up testing to a broad group of brands, agencies, and tech companies. While these solutions may require time and testing, they offer initial insights into how advertisers can navigate the non-addressable landscape. Despite the fragmentation of these solutions, they hold potential for future-proof targeting in the absence of third-party cookies.

4. AI and Panel-Based Solutions: Inferring Audience Characteristics

AI and panel-based solutions, such as Yahoo’s Next-Gen Solutions, leverage sophisticated algorithms to project granular learnings on unknown users and infer audience characteristics. These solutions use AI to analyze available data and make predictions about user preferences and behaviors. However, the accuracy and reliability of these solutions depend on the quality of the input data. To ensure the highest accuracy in inferring audience characteristics, quality, trusted, and robust data is essential. Advertisers can leverage these AI-powered solutions to better understand and target non-addressable audiences.

The Shift From Third-Party Cookies to New Methods

As the internet phases out third-party cookies, online advertisers are exploring fresh ways to target customers. Transitioning to what Google’s Senior Product Manager, Radhika Mani, terms as the “Era of Prediction,” marketers are encouraged to adopt more robust audience strategies.

A media strategy that encompasses a combination of identity solutions, including non-addressable methodologies, is critical for success in the evolving digital landscape. By embracing non-addressable supply, advertisers can future-proof their targeting efforts and adapt to the changing advertising ecosystem.

The Promise of First-Party Data and AI

Advertisers can still build audience lists with enhanced AI filling the gaps left by less extensive tracking. For instance, Google’s Smart Bidding and Optimized Targeting can enhance ad relevance using internal algorithms.

Navigating Privacy Concerns

The pivot away from third-party cookies comes amidst growing consumer calls for robust data privacy protections. Phasing out third-party cookies aims to curb the relentless tracking of individuals across the internet. However, this could impact digital ad revenues.

Strategies to Thrive in a Post-Cookie World

To thrive in a post-cookie world, advertisers must harness their customer touchpoints, create partnerships to share data, and experiment with context-based and interest-based targeting.

The Power of First-Party Data

By leveraging their consumer touchpoints to collect first-party data, brands can create a personalized user experience while protecting user privacy.

Leveraging Second-Party Data through Partnerships

Forming partnerships with other companies to exchange data can enhance the value of a brand’s own data. Marketing data partnerships can bring together two non-competing, complementary entities to combine browsing-history data with shopping-cart data.

Contextual Advertising and Interest-Based Advertising

Contextual advertising, which displays ads based on the content a user is viewing, and interest-based advertising, which targets consumers based on their recent top categories of interest, are promising alternatives to third-party cookies.

The Future Is Now

As the addressable ecosystem bubble is about to burst, advertisers must adapt to the changing landscape by incorporating emerging methodologies for non-addressable environments. Contextual targeting, first-party data, browsers and platform solutions, and AI-powered solutions all offer promising ways to reach non-addressable audiences. By embracing these methodologies, advertisers can maximize their campaign effectiveness, gain a competitive advantage, and navigate the evolving ad tech industry with confidence. It’s time to think beyond cookies and embrace the future of addressability in the non-addressable supply. Let’s seize this moment and shape the future of advertising together.