A Transformational Moment in Digital Advertising

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By Rob McGovern, CEO and Founder of PreciseTarget. Also founder of Careerbuilder.com

Advice for navigating the new world of ad targeting in the privacy era

When two hurricanes collide it’s called the Fujiwhara effect. It last happened in 1933 in the Gulf of Mexico. While you can imagine a disaster movie about two storms colliding to form a superstorm, that’s not what happens. The two storms begin to orbit each other, doing an interconnected dance, ironically preventing each other from getting stronger. In advertising we’re having our Fujiwhara moment, where the privacy wave is intermingling with the targeted advertising ecosystem, creating a confusing picture for the advertiser.

Today’s privacy movement is being driven by consumers. There’s a famous scene in a movie where a news anchor encouraged everyone to open their windows and yell “I’m mad as hell and I’m not going to take it anymore.” People have learned they are being tracked and stalked by things with friendly names like cookies, pixels, and maids. They also now understand the expression ‘if it’s free, you are the product.’ They started yelling to regulators and lawmakers and the tide is now swinging in the other direction.

Europe took the lead with their GDPR law, which was quickly Americanized with the California Consumer Privacy Act (CCPA). These laws are designed to put the consumer in control of their data, including putting the stop button in the consumer’s hands. GDPR and CCPA were only openers in the mad-as-hell privacy movement. Next came the major browser makers, including Google and Apple, who announced they’ll no longer support 3rd party cookies in their browser. This is shorthand for less tracking and stalking. Next, Apple announced that iOS would no longer enable mobile tracking unless the consumer, perhaps because they are masochists, opts-in to being tracked. What does all this mean for advertisers? The game has changed, and it’s going to become increasingly difficult to target people with ads.

The other storm on the horizon is swirling around the ad-tech ecosystem. The system is largely built on cookies and MAIDS. For simplicity, you can think of a cookie as a way of identifying you and your specific computer, and a MAID, which stands for mobile ad identifier, which is a way of identifying you and your specific mobile phone or iPad. When the industry announced they were eliminating cookies and mobile tracking it was like putting blindfolds on the people at a shooting gallery. The ducks on the conveyor belt might now live longer than the turtles.

The losers on the vendor side are largely the ad-tech companies, like LiveRamp, Criteo, TradeDesk, Google, and Facebook. You’re going to read much about their potential fixes, which might be as interesting as listening to speeches made during a mass rumble. One faction is trying to create UnifiedID 2.0, which is a technology that enables consumers to opt-in to being tracked and targeted with ads. The last time I checked there weren’t many consumers wanting that. Google is testing something called FloC, which stands for Federated Learning of Cohorts. In this model, they’d want to aggregate cohorts of people with similar click patterns. The problem: the other browser makers, including Apple, Microsoft, and Firefox want no part of being subjugated to anything Google. The non-Google browser makers are 35% of the market, and most advertisers won’t be enticed by something ignoring 35% of the customer community.

What should advertisers do during the Fujiwhara rumble? This industry chapter, unfortunately, will play out over the next couple of years. Incidentally, it will also include anti-trust actions against Google and Facebook which are now entering the courts. If I were in your shoes, I’d have these three things on my to-do list during the wait for the new normal:

1. Tend your own garden: Brands are still able to use cookies to identify their own customers. These 1st party cookies are becoming increasingly valuable assets owned by brands. Aside from maintaining your cookies, which means keeping them refreshed, there are opportunities to interconnect with third parties so long as you’re the party delivering the content to the consumer. One great way to cultivate your 1st party cookie pool is to send personalized emails. When a consumer opens your personalized email, you have the ability to refresh your 1st party cookie.

2. Bring customer intelligence in-house: Your ability to target customers using ad-tech vendors will be rapidly degraded. This pushes the need to do more in-house, requiring advertisers to house more of the targeting data. Enriching your customer file with 3rd party data will be a key trend in this era. The data available to advertisers goes far beyond demographics and can be delivered in a way that preserves your CCPA legal compliance. For example, it’s now possible to enrich your customer file with specific data about your customer’s taste in categories. A consumer’s taste drives their decision making, making this a critical add-on to your customer file.

3. Rethink Personalization: Customers have learned to expect personalized experiences. Spotify and Netflix won their categories by delivering personalized experiences. Consumers don’t dislike emails from brands, rather they dislike impersonal and generic emails. Most retail brands continue to send generic emails to customers, rather than personalized emails with content and promotions that are highly relevant to the consumer. The email has become the forgotten marketing channel among advertisers, which is too bad. It’s nearly free, it’s an opportunity to speak one-to-one with your customer, and personalization technology and data are widely available.

We’re entering a new world of targeted advertising, so advertisers need to be focused on measurement and tuning over the coming months. The mobile tracking and browser cookie changes are going to ripple through the market with uncertain impacts. Every ad platform, including Facebook and Google, will be impeded by their inability to target specific consumers. Smart advertisers will be focused on understanding how lower fidelity ad targeting is impacting conversion.

Rob McGovern is CEO and Founder of PreciseTarget and also the founder of Careerbuilder.com. PreciseTarget is the first data science and machine learning company to profile and predict the Retail Buying Taste of every US consumer, enabling brands and retailers to better match their product and brand with customers.

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