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End of an era of ad targeting

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Publishers will need closer ties to their audiences

What we now call the nearly $500 billion digital advertising business started with a humble banner ad on HotWired.com in 1994. From the start, digital advertising was embedded with three original sins:

  • There was no identity system to the web, giving rise to the use of tracking cookies as a proxy.
  • The audience data was separated from the media impression.
  • The success metric was the click.

These three facets took the emerging publishing industry on a path to where it is today: beset with privacy regulations by governments and tech companies that are overturning how digital advertising will work, concentrated power in a handful of sprawling tech companies and a publishing system with misaligned incentives that have led to the rise of the adversarial web and the rise of paywalls.

The industry itself should shoulder much of the blame. User privacy has long been treated as an irritant, left to the last panel of the day at ad tech conferences, the proverbial “last thing standing between you and cocktails.” Privacy advocates were treated as weirdos, not people to be taken seriously. And over the years, the response I most often heard to questions about the use of promiscuous collection and use of data: We don’t use personally identifiable information and besides the direct mail guys are sketchier.”

This maximalist view – “Privacy is dead, get over it” – wasn’t a good bet. It allowed the mostly harmless machinations of ad tech to simply make banner ads more effective to be painted much more nefariously. Normal people never bought the idea that ads were “personalized” rather than targeted. It’s why so many people are convinced Facebook or others are listening to their conversations to target ads. There’s not a ton of trust in what’s happening in the back room.

The moves to rein in ad targeting will have a raft of winners and losers, like any change. Don’t believe those that take extremist views one way or the other. Weirdly, democracy will not collapse because the third-party cookie is going away, but by the same token, many businesses will be hurt as the ability to target ads and count them becomes harder and more expensive.

The pendulum will swing back toward context. In a recent episode of The Rebooting Show, Audigent’s Jake Abraham pointed to retargeting as a catalyst for moves to crack down on the use of data in digital advertising. That’s because retargeting ads replaced pop-ups as the symbol of “annoying” and “creepy” digital advertising. The emerging solutions, including Google Topics, will shift targeting from a less granular level and rely more on the context of the environment (the original targeting technique) to match ads with prospective customers.

Primary-engagement media will gain. As I’ve written, I believe the next phase of digital publishing will favor quality over quantity in terms of audiences. Those publishing brands that put community at their core will thrive since it easily lends itself to a direct relationship that will make those audiences far more valuable than a random collection of people who mindlessly tapped a link on their Facebook feed. There’s a reason that Squarespace found podcasts such an efficient way to acquire customers. The newsletter boom is a signal of where publishing is going.

Feed content will suffer. Former Bleacher Report CEO Howard Mittman used a neat “need vs feed” framework for the publishers with real audiences that seek them out vs those who pump out content designed to catch fleeting attention from algorithmic platforms like Google and Facebook. Indirect audiences will be harder to monetize.

Understanding your audience will be critical. First-party data is thrown around as a catchall, with many misunderstandings and even debates about whether there’s such a thing as zero-party data. Ultimately, publishers will need an in-depth understanding of their audience in order to build out sustainable business models. It’s not enough to fall back on the “see a cookie, hit a cookie” approach.

Data will…

Read The Full Article at The Rebooting

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