Stop Worrying About Signal Loss and Concentrate on the Gains
The latest version of the IAB's State of Data report makes it clear that the ad world is deep into an era of signal loss. Cookie deprecation looms, yet its state regulations that will likely deliver the crippling blow to behavioral targeting as we know it.
This may seem like a doom and gloom scenario, but in reality, it should be an epiphany. Signal loss happens all the time. It's just receiving more fanfare now than ever before. We can't go back to the old days, but the next era remains unclear.
Recent layoffs shows that emerging signals are challenged to make it to the other side. Without funding and adoption, no new signals stand a chance. Even with the expectation of imperfection, are advertisers paying enough attention to the fact that new signals are entering the market to help guide their ad efforts? Or will they miss yet another opportunity to finally change their ways?
Signal Loss Is Natural
Any hair pulling at the thought of signal loss represents unnecessary fatalism. Signal loss is part of online advertising and always has been. Cookie-built audiences have a shelf life because consumer needs and interests change constantly. We're not too far removed from a wave of audience sellers labeling their audiences as real-time, always-on, or customized, all built around the concept that the data was fresher than what was previously available.
Let's not forget that there are millions of impressions served every day without the use of cookies, because browsers like Safari and Firefox stopped supporting cookies years ago. The fact that anyone would fret right now shows that signal loss wasn't normalized enough in the past.
All that said, it's critical to look at what's being lost. Yes, third-party cookie support is waning. But the data lost to privacy regulations was already bad or unsustainable. Using those kinds of data sources could put brands in a precarious position, so it's for the best that they begin to modify the sources and systems with signals that will survive.
Measure the Gains
The ad ecosystem is always in a state of flux, and losses and gains are simply part of that process. What's happening right now is a widespread loss of data collected directly from consumers. But evolution isn't solely defined by what's lost, so let's look at the gains. The ecosystem is about to enter a new era of addressability, and that's a good thing.
Brands, agencies, and platforms are building out solutions for the current unaddressable web and the unknown future. Based on what we're hearing, the new addressability needs to cover the four following areas.
1. The moment
Advertising's reliance on behavior focused on where prospects fell within the purchase funnel. You can lose the behavioral signals and still deliver a message within a particular moment that has significance to a consumer. Attention can be sliced by type of site, content, and time of day.
Still, we're just at the beginning of even understanding how to use attention metrics. A recent report by IAB Australia found that measuring attention is a key way to uncovering new insights, but marketers are still using these metrics in isolation.
2. Location
Location data, once one of the hottest areas in advertising, has cooled off substantially, largely due to the privacy and regulatory climate. Even as advertisers lose access to granular mobile location signals, some level of location data will always remain available to advertisers. The insights might not be as granular as how a consumer moves through a city, but they are still useful.
Audiences in different regions have different sentiment and purchasing behaviors. Companies like Goldfish and Experian are already working on privacy-compliant ways to link these real-world behaviors to the digital world.
3. Intent
In-market audiences are among the most valuable targets for advertisers. In the past decade, B2C and B2B ad targeting has focused on building segments based on media consumption and topic research. The new world needs to consider the moment when an ad is delivered even more granularly to take advantage of intent.
For example, the sentiment of sports audiences varies wildly depending on whether a team wins or not. The same goes for how consumers or companies interact with content around big tech and AI. Rather than just lump these into audience buckets, brands need to look at new data sources to better understand the thought process and the intent behind consumers' content interests.
4. Brand trust
Programmatic made it easy for brands to reach consumers across the long tail of content. That also made it difficult to track every placement and led to widespread fraud, the proliferation of ad-supported fake news, and the rise of made-for-advertising websites that offer absolutely zero value.
Brands don't want to pay for those placements, nor do they want negative association. Brands need to put their ads alongside trusted websites and content, and that's probably not talked about often enough these days. In a world of perfectly imperfect ad targeting, expect brand trust to become more important than it has ever been.
Prep for the Future
Signal loss is real, but it's not new. Adaptation should be baked into every advertising plan to respond to the natural shifts of the ecosystem. Yet even with the writing on the wall for several years, some advertisers are still resorting to doomsday scenarios or frankly not addressing the challenge as proactively as they should.
Advertisers and the providers that service them need to decide if they want to invest in the new mode of addressability and build the required learning not, or if they want to clutch at the last shreds of legacy signals.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Mario Diez is the CEO of Peer39.