Cookie deprivation leads to an 8% year-on-year increase in contextual targeting spend

Research has uncovered that advertisers will increase their contextual targeting spend by £770m in 2023, an 8% year-on-year increase.

The data from audience targeting platform Nano Interactive and CoLab media consultancy suggests that the increase in contextual spending is a product of the decline of cookies as people-based targeting becomes more challenging for businesses because of signal loss.

Currently, just 60% of consumers are still addressable on Google Chrome due to the popularity of incognito browsing and use of the more advanced privacy settings at their disposal, as the continual shift from opt-out to opt-in cookie consent occurs.

Cookie deprivation and the spotlight on attention

The report surveyed 150 UK brands and agencies in partnership with CoLab to understand how they are dealing with signal loss. The number one factor impacting the marketing needs of larger advertisers (budgets of over £1m) in the coming year was identified as cookie decline, followed by their Environmental, Social and Governance (ESG) credentials.

For smaller advertisers (budgets of less than £1m), cookie decline was slightly less of a concern but still cracked the top five.

In the wake of signal loss, brands and advertisers have been forced to reassess how they measure a successful campaign and attention has emerged as a metric of increasing value.

Almost two-thirds (63%) of survey respondents held attention metrics in a positive regard and over half (57%) selected attention from a list of the ten best metrics for measuring success and reporting against. This growing enthusiasm for attention was most apparent among larger advertisers, with 79% expressing positive sentiment towards it.

However, attention still needs to do more if it is going to solidify itself as a reliable form of measurement. A third of respondents (33%) said that attention targeting tools still need to improve if it is going to be usable.

Heather Lloyd, Head of Product Marketing at Nano Interactive commented: “Attention is receiving attention right now because of industry flux, but there is also a flurry of activity around it because there isn’t yet a clear, single definition of what it is.

“This is opening up exciting new avenues and conversations which were long overdue but never had a chance of happening before. Viewability and CTR are still important, but no longer enough on their own.”

AI pivotal to successful adoption of contextual

With artificial intelligence (AI) continuing to make waves within the advertising industry, the report revealed where advertisers believe the technology will be most influential in future. 52% said targeting will be most affected with campaign optimisation not far behind (47%) and streamlining operations (37%) rounding out the top 3.

AI was also identified as having significant potential to improve contextual advertising by 59% of respondents, outlining it as a key factor to helping future-proof contextual so it can reliably fill the gap created by signal loss.

Carl White, CEO of Nano Interactive, said: “Signal loss is not a new problem in online advertising and to succeed as an industry we should be aiming for future-proofed solutions. 

“Targeting that is free of all personal identifiers is likely to be one of the fastest growth sectors in digital marketing this year. Brands and advertisers who embrace these new targeting models will be well placed to navigate signal decline and ensure their campaigns are safe from changes brought both by tech giants and new legislation.”