In 2020, Is User-Based Targeting the Most Effective Way to Connect?

Article Takeaways

• Recent scandals have required sweeping changes across the industry as to how brands use data.
• User-based targeting may not be the most effective way to reach consumers.

There has been an increasing amount of attention cast on the advertising industry’s use of personal data for targeting purposes. The roll-out of GDPR, CCPA, and a flurry of browser-level changes to the usage of cookies have forced marketers to reexamine how they reach consumers online.

These developments are accelerating the cookie’s demise. But it appears that most vendors and marketers are looking for workarounds to continue the same hyper user-based targeting that cookies have helped become the norm.

However, one big question remains: Has this ever been the most effective way to reach audiences?

Privacy, Trust and Cookies

The old age of advertising relied predominantly on context to serve ads to relevant consumers.

But as digital advertising exploded in growth (especially programmatic buying, which involves real-time identification and targeting) so have the number of third-party data providers and cookie-based segments.

Cookies, originally created to improve a user’s browsing experience, became tools for advertisers to understand user behavior and purchases. Cookies have always been an imperfect solution, with a relatively short lifespan, and have declined in usability as new devices and formats gained popularity with advertisers.

But these issues are not what’s driven the industry to rapidly seek alternatives. The driver has instead been consumer privacy and trust, with recent scandals, like Facebook’s involvement with Cambridge Analytica casting a spotlight on the need for regulation around how consumer data is tracked and used (like GDPR and CCPA).

Defining Your Audience

Shifting away from cookies, let’s look at user-targeting on a broader scale. To inform marketing decisions, marketers typically aim to build a detailed view of their customer base, identify the qualities of their best and most loyal consumers, and use third-party data to find people who are similar and target them accordingly.

But what if the defining quality of your audience isn’t the fact that they’re millennials with a certain median household income — but is instead that they’re reached in an environment that signals a specific state of mind and intent?

Pinterest spoke about the importance of context as a driver of intent the IAB’s Brand Direct Summit, discussing how a “pin” only becomes truly interesting when it is surrounded by a myriad of other images and ideas that create an inspiring moment.

This way of looking at consumer interactions also addresses a gap with cookie-based data: recency and relevance. As mentioned earlier, most cookies have a short lifespan, meaning that information about the user is sometimes outdated by the time marketers can capitalize on it. But advanced contextual solutions could give marketers greater ability to capitalize on cultural trends and popular topics in real-time, ensuring their message is fresh and relevant.

These tactics have already been proven to work. AdExchanger recently covered Dotdash’s efforts to offer more effective “intent-based” data by analyzing reader habits across specific topics like retirement planning. The strategy gave one of Dotdash’s partners a 50% higher click-through rate compared to campaigns using third-party data alone.

The New Wave of Contextual

While the future of contextual is bright with new personalization and enhancements possible, nothing can downplay the importance of accurate customer data. With the most recent browser-level changes and regulations, first-party data is going to be even more critical for modern marketers.

And modern marketers already know this — it’s every brand’s goal to reach “the right person” in the “right environment.” But how marketers use and expand on customer data needs to change. Instead of acutely focusing on the attributes of each user, marketers need to put a heavier focus on the state of mind of consumers as they browse through different topics. Most importantly, shifting towards this mindset keeps consumer privacy first — and moves away from using personal details to target users with ineffective ads.

As an industry, how we use and amplify first-party data is what will be key to success in the next wave of digital advertising. There needs to be a fundamental shift in how brands think about the use of advanced contextual data to grow their audience with the right personalized message.