Rapid Surge in OTT and CTV Marketing
New Delhi, June 16: As of last year, Google, Facebook, and Amazon earned more than $30 billion of digital advertising revenue. Having control of the advertising spend has given the big tech companies access to large data sets. Having access to large data sets has led to privacy violations. Since 2018, different privacy laws such as GDPR, CCPA, and CPRA have been created to regulate the PII (Personal Identifiable Information) infractions.
We have noticed a rampant increase in advertising privacy violations because PII is collected based on an individual’s device browsing preferences and history. The PII collected is used for audience-based targeting. Audience-based targeting involves collecting cookie-level data that captures specific demographic, interest, and behavioural data. Audience-based targeting has been used across different DSPs (Demand Side Platform). A DSP can be defined as a tool that helps advertisers buy specific and place ads across different domains, apps, and video platforms.
DSPs also enable advertisers to select multiple layers of data sets to target their audience. The explosion of audience-based targeting led to different 3-party cookie-based companies growing rapidly. 2016 was the tipping point for audience-based targeting, where we saw different advertising platforms in the United States enabling political parties to target their audience intrusively. This immediately led to the birth of different privacy acts and the cookie armageddon.
In 2019, Companies like Apple and Google, which own Safari and Chrome, respectively, swiftly made announcements that they would be depreciating the use of third-party cookies on their browsers. Apple had announced it would launch a new version of the ITP (Intelligent Tracking Prevention) policy. In this new version, it would block all third-party cookies and tracking. In other words, this meant that advertisers and publishers would have little to no information about the visitors to their websites. This policy by Apple ended any form of targeted advertising in Apple’s ecosystem. In 2021, they provided the users with an iOS update that users have the option to opt for in-app ad tracking.
In 2021, to combat third-party cookie depreciation, Google announced they would implement FLoC (Federated Learning of Cohorts). FLoC was based on a select group of publishers and advertisers that were going to decide what specific data sets would be applicable to track and understand targeted audiences. FLoC did not get a good response from the marketplace, so, at the start of 2022, Google announced that they would be implementing a new privacy sandbox called Topics. Topics enable users to be anonymous, and their browsing history would not be tracked. Chrome, the browser, will determine a set of topics of high interest to a specific individual. The topic data is stored for 3 weeks, and the device used for browsing will be studied simultaneously. No external servers or API is used for this process. Through Topics implementation, Google has entered into the contextual targeting realm.
Government, brands, and consumers are concerned about an individual’s privacy and the control that tech companies have on the digital marketing ecosystem. To combat this, privacy acts and the implementation of contextual techniques have helped tilt the balance in favour of the end consumer.
Contextual targeting is a method of targeting a specific audience based on their consuming content. Contextual targeting uses NLP (natural language processing) and predictive modelling to understand the tonality and inflection in the content that the user is consuming. Based on the content studied, the user will be showcased an ad. Recently, IAB published a study called State of Data Report, which highlights that 42% of marketers will be increasing their ad spend in terms of contextual targeting. Additionally, the report highlights that 46% of industry people do not understand how different BlackBox concepts (for example, Privacy Sandbox) works.
All these signs indicate that contextual targeting can be the solution for the future. Contextual targeting helps marketers create real-time messaging and acquire new customers instantaneously. Unlike behavioural targeting, which requires studying different data points and signals before deciding on targeting the intended audience, contextual targeting is based on content relevancy and recency.
According to Mr. Akaash Ramakrishnan, Co-Founder and COO at AdSkate, “Contextual targeting can easily be applied to engage in-market audiences as well to improve brand awareness”. For example, if you have a target audience on a pet forum, you can showcase relevant petcare product ads that can lead to instantaneous conversions. Another imminent application of contextual targeting is in the CTV realm. Smart TV manufacturers have created a method to capture ACR (Audience content recognition) data to identify the audio and video content the user consumes. Accordingly, they can be contextually targeted across the different devices within a household.
With new privacy laws in place due to data violations, contextual targeting appears to be the safest and best bet for the marketplace. This cookieless targeting is making a swift comeback into the digital marketing ecosystem. Advertisers will be left with a choice to either adapt or slowly perish.