Why contextual alone is not the answer to the identity problem

Running short of first party marketing data but trying to wean off the cookies? Contextual targeting can help, but a blended approach is needed.

While contextual lets advertisers match keywords and offers them insights into the “meaning” of a page, it is not a comprehensive alternative to the third-party cookie alone, warns Travis Clinger, SVP, Activations and Addressability at LiveRamp.

Contextual solutions are often imprecise, difficult to measure, and based solely on the context of the browser session at that point in time.

Marketers are unlikely to generate authentic people-based marketing capabilities relying wholly on in-the-moment targeting. Instead, marketers should use a mixed approach to their identity practices. For marketers who want to maximise their reach and return, and for publishers who want to maximise yields, authenticated, first-party data should remain at the very top of the marketers priorities.

This article outlines  how marketers can supplement their first-party data sets with cohort-based or contextual advertising across unauthenticated inventory. In this way, marketers can achieve the in-the-moment semantics targeting for prospective customers, with the reassurance that their fully addressable and ‘known’ customer base are reachable.

With the continuing delays to Google’s Privacy Sandbox Solution, the future of digital advertising is still not clear, and for many the urgency to adapt to a post-third-party cookie world may have seemingly waned.

However, the reality is that the cookieless future has already arrived. Alongside new digital channels like mobile in-app and CTV environments, consumers have been using cookie-free environments like Safari, FireFox and Edge for years - the reality is that almost 45% of the internet already operates without cookies.

With all the work the industry has done over the past few years around preparing for the cookieless future, what has become abundantly clear is that first-party addressable solutions actually provide far better performance than cookies ever did. For example, Microsoft Advertising, the world’s second-largest publisher, partnered with LiveRamp’s cookieless Authenticated Traffic Solution (ATS) to enable brands to buy authenticated inventory.

As a result, Microsoft increased CPMs by over 40%. Meanwhile, for those brands and publishers that either have limited or no access to first-party data, contextual targeting has re-emerged as an increasingly popular complementary solution and, even in some cases, as a standalone option.

A new look to contextual targeting

Contextual targeting has changed immeasurably over the past few years. There has been a lot of investment in this area and the inclusion of powerful data technology developments, like AI and machine learning, means publishers and advertisers are now able to build faster analytical links between content and potential outcomes.

Despite all these developments, contextual targeting still only really provides advertisers with two avenues for targeting their required audience.

The first is based around matching keywords, and the second through semantic insights into the “meaning” of a given page. Contextual targeting unquestionably provides a privacy-compliant solution, but trying to align advertising campaigns to specific keywords is imprecise, almost impossible to measure, and above all extremely complex and inefficient to scale.

Putting their sole focus into contextual targeting to build out campaigns will leave marketers and advertisers unlikely to achieve the results that they desire and have the ability to measure the true performance of their campaigns.

The harsh reality is that brands and advertisers wishing to increase revenue and market share will suffer if they choose to only utilise contextual strategies.

Positioning contextual as part of a broader identity strategy

Having said that, although ineffective if leveraged by itself, contextual targeting certainly does have a role to play in campaign planning for marketers and publishers. Instead of being the central focus, it should be seen as one part of a broader identity strategy.

As we move forward into an increasingly compliance-driven post-cookie ad ecosystem, to achieve their engagement and acquisition goals, marketers will need to create strategies that offer a blended approach to managing the challenge of identity.

This will need to be based both on the availability of privacy-compliant identifiers as well as the suitability of the individual approach for each specific channel they are using. By placing people-based marketing and first-party data solutions at the heart of the strategy, this will also allow marketers and advertisers to then supplement their authenticated audiences with cohort-based or contextual solutions across unauthenticated inventory.

This way they are effectively ensuring that they get the best of both worlds—in other words, they are catching passing prospective customers through in-the-moment semantic targeting, while at the same time being safely reassured that their fully addressable and ‘known’ customer base are also being reached as part of their campaigns.

Ultimately, a blended approach like this will lead to better business outcomes than contextual could ever have hoped to provide by itself. Some of the benefits that marketers and advertisers are likely to see, include greater return-on-ad-spend, more accurate measurement, and larger audience reach, all done at scale and, of course, while staying privacy-compliant.

And because they are relying on authenticated and privacy-compliant targeting methods, it will also serve to bring bra nds, publishers and their audiences closer together.Which in turn will help to rebuild some of the trust that has been lacking in the digital ad industry.

For marketers who want to maximise their reach and return, and for publishers who want to maximise yields, a blended approach to identity is the way forward. This will allow both parties to leverage the broadest set of identity solutions in order to achieve both scale and reach, while at the same time maintaining the desired level of accuracy.

By Travis Clinger

SVP, Activations and Addressability