In a world where the number of regulations impacting digital advertising continues to grow, the ability to deliver addressable advertising is becoming increasingly difficult. The variances between these rules in different markets mean that often ads have to be served on a consumer-by-consumer basis to achieve this addressability. This is inefficient and unsustainable and is made worse by the fact that only 30% of consumers can be targeted using the one-to-one method on the open web.
The deprecation of third-party cookies in Google’s Chrome browser will make matters worse, but two-fifths of the 50% of consumers using the browser already have cookies disabled. So, with or without cookies, advertisers are failing to reach a high percentage of consumers, and along with publishers, are in desperate need of a solution.
Going direct to the source
Programmatic advertising, in its current form, isn’t working. The ecosystem is battling issues around privacy, data leakage, and an increasingly crowded supply path, making the entire landscape unsustainable from both an efficiency standpoint and an environmental one.
Adding insult to injury, many of the solutions being touted as replacements for third-party cookies will only see addressability decrease further, replicating the issues seen with third-party data.
This is why a growing number of advertisers are exploring a shift back toward direct-bought inventory, removing many of the unnecessary steps on the journey to having an ad placed with a publisher.
Advertising can still be served through the ease of programmatic, but advertisers benefit from better access to audiences and placements, while cleaning up the supply path. This guarantees that advertisers can focus more of their spend on media, rather than over half of their expenditure going toward intermediaries. In turn, publishers gain back control of their revenues, having suffered as a result of third-party cookies.
However, this more direct approach still requires the publisher to have the right solutions in place to open up every one of their consumers to brands in a privacy-first and sustainable manner. That’s where cohorts come in.
Behaviour-powered audiences
Cohorts are a context-focused approach, tackling the addressability problem by enabling advertisers and publishers to work together to target defined audiences based on on-site behaviours.
A cohort is a group of users who have all met a predefined set of criteria. Every user who browses the publisher’s site and performs each of those behaviours automatically gets added to a cohort. These cohorts are then served targeted ads based on the common traits they share.
An example would be an ‘engaged travel readers’ cohort, where users who have read three or more travel-related articles in the past month are included. The user visits the site and looks at their first travel article, before clicking on their second a few minutes later, and their third a week after that. This data is processed and they’re added into the cohort, which can then be used to target this audience.
Serving ads based on the context of the page to groups of relevant people eliminates the inefficiencies around a one-to-one approach, and opens up 100% of a publisher’s audiences to advertisers.
Importantly, the privacy of consumers isn’t jeopardised by this approach – something that has been a significant concern with third-party cookies. Moreover, the carbon emissions associated with the complicated supply chain are lowered, due to the more efficient process and the fact that data isn’t being put at risk by being bounded across the internet following the user.
The future of digital advertising
Building direct relationships is no longer an opportunity for publishers and advertisers; it’s a requirement. Publishers are able to take back control of their revenue, and advertisers are able to reach the 70% of consumers they are currently failing to reach.
These relationships should be powered by the right technology solutions, and a good place to start is a technology that helps the publisher to build cohorts that constantly update. The present and future of digital advertising should be built on cohorts – not just to maximise addressability, but to clean up the environmental impact of this industry.
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ABOUT THE AUTHOR
Monica Rodil, Customer Success Manager at Permutive
Monica Rodil is Customer Success Manager at Permutive, which puts publishers in control of their revenue by enabling them to reach and monetise 100% of their audience while respecting consumer privacy. Previously, she held roles at Oracle, Blackmilk Media, and Azerion, where she specialised in media performance and ad operations.