Why Contextual Can’t Wait

Umberto Torrielli Aug 20, 2021

The Now.

You just clicked on an advertisement for a pair of shoes, you bought the shoes, and a day, or week later you are being retargeted for that same pair of shoes. Redundant for the consumer? Wasted ad spend? Frustrating for advertisers? Absolutely.

Anyone who has browsed the web on their mobile, a computer or any other connected device, has been retargeted with an ad. That, for the most part, is a function of third-party data and retargeting strategies.

What Hasn’t Been Working?

The advertising tech industry was predominantly built on the foundation of third-party cookies and media strategies have long relied on third-party data. Data that was, and still is, used for use-cases such as refining targeting, personalization, and look-alike modelling around consumer profiles.

Third-party data, according to a Google definition, refers to any information collected by an entity that does not have a direct relationship with the user the data is being collected on. Third-party data has historically been collected by capturing browsing behaviour from websites, apps and other connected devices, only to be aggregated and re-sold by third-party data marketplaces within DMPs, DSPs, and other related platforms.

Although third-party cookies and data are the foundations of marketing, the industry knows (and hates to admit) that there are fundamental flaws around third-party cookies & third-party data. Here are just a few challenges that come to mind:

  • Third-party data was used because there was no other option to personalize marketing experiences if a user hadn’t already visited a brand’s website;
  • Third-party data is tied to device IDs or cookie IDs often without explicit consent, and therefore goes against compliance laws such as GDPR and CCPA;
  • Third-party data is not necessarily attributed to the right person. According to the definition it does not have a direct relationship to the user;
  • Third-party data is often collected & aggregated from a variety of websites, making it extremely difficult to accurately tie back all touch points and IDs to a single user;
  • There are hundreds of third-party data providers available leaving marketers confused with who they can trust;
  • Moreover, there are no industry standards for third-party data quality and verification, each provider has their own version of a standard, forcing everyone to operate in silo and leaving marketers at a loss;
  • The quality of third-party data is low and since this data typically has a 90 day recency period, there is no way to accurately capture what happens during this time span;
  • Millions upon millions of advertising dollars are spent on ads that are not relevant.

In the last decade, third-party data has always tried to be a proxy for behavioral targeting, but never lived up to the expectation. If you consider this in the application of what has been said, third-party data has limited the accuracy of retargeting, limited personalization and limited accurate audience profiling.

Whereas first-party data continues to be unquestionably crucial for marketers, third-party data has never been the ‘gold standard’. The poor quality, lack of industry standards and minimal data protection for consumers are just some concerns to name a few. As we move towards a new era where third-party cookies will be no more (phew!), we can look to a more reliable, hopeful, and deterministic layer of data in contextual.

Why Contextual Matters.

You guessed it. It’s the eagerly awaited resurgence of contextual. Although contextual has long been on the scene in the ad tech world, it is taking on a new life, creating new avenues for the post-cookie era.

The foundation of contextual is effectively real-time deterministic data that has no latency period. It allows for advertisers to feel confident in their targeting strategies and relies on tangible data. Contextual targeting refers to the concept of targeting consumers without any assumptions, on any device they are using, and reaching them with an advertisement that is relevant to what they are reading or watching. In this instance, what truly matters is the content being consumed, in that specific moment. That is what drives the consumer experience.

Still not sure why contextual matters? Let’s talk through some key factors, to name a few, that reveal the power advanced contextual solutions can bring:

  • Contextual solutions allow advertisers to make the decision to serve ads based on the content of the page or video, increasing targeting precision and alignment;
  • Contextual targeting is widely accepted and standardized by organizations such as the IAB, making it easier to govern and adopt;
  • Contextual targeting allows for a better consumer experience.
  • By tapping into contextual solutions, advertisers are less likely to lose spend on wasted impressions;
  • When implemented correctly, contextual targeting drives our outcomes and can provide insights on how the context resonates with the advertisement and even provide new learnings to improve future campaigns.

What must be realized is that we do not need to wait for third-party cookies to be deprecated in order to consider the urgency of a more effective solution. Next-generation contextual is the evolution of digital marketing, driving outcomes using contextual real-time deterministic data that can change the way we deliver actual performance and tangible results. We don’t need to wait for tomorrow, it is time to act now.

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