Future of advertising

What Makes Retargeters Best Prepared for the Cookieless World?

In this article you will learn:

  • The classification of the digital marketing market
  • What types of data are necessary for each service provider to be able to work
  • What consequences disabling cookies will have for these vendors

The digital marketing landscape is a very complex environment. There are many players with different profiles of activities addressing the diverse needs of their clients.

For example, media houses/agencies primarily focus on developing comprehensive branding strategies and building their clients’ brand awareness. On the other hand, retargeters are focused on performance campaigns suggesting the right products to the right users to drive sales. DMPs/Data brokers are also an important part of the ecosystem, as they provide customer data for targeting purposes. What is crucial to allow each of the aforementioned types of companies to provide services?

Branding-oriented vendors focus on approaching the right audiences, but they don’t necessarily need data from their clients’ sites. This raises the question – if not from the clients’ sites, how do they gain access to the right users?

Currently, there are three dominant approaches: 

  • Contextual – targeting based solely on the environment in which the advertisement would be displayed without information about the user;
  • Publisher-defined audiences – groups to which the access is granted thanks to a direct relationship between the vendor and publisher;
  • Third-party audiences – groups built based on data sets available through data exchanges.

In contrast, retargeters would not be able to function without first-party data from their client’s sites. First, they need to know that a specific user has visited the advertiser’s website in the past. Then they need to know which products were visited by the user, and if the user added them to the basket or not. This makes a lot of difference when understanding a user’s purchase intentions. Such insights can also be enriched from data collected by third-party sources. This could be hard-to-obtain information from the client’s websites, such as demographic data. Such information can be helpful, for example, when an advertiser wants to retarget users who have viewed Lego blocks, but only if they are over 30 years old.

It’s worth mentioning here that apart from reaching new audiences for branding, contextual analysis also helps to blacklist placements in which ads shouldn’t be displayed, because they could harm the brand’s image. This technology is beneficial for both branding- and retargeting-focused vendors, and we wrote more about this in the article on Brand Safety.

How about data brokers and DMPs? 
Data brokers/DMPs are entities that collect data, organize it and make it available to other marketing technology providers for targeting purposes. Sources of this data range from CRM software, websites, and even emails. These companies work like exchanges, being an intermediary between the entities creating audience groups and those who want to gain access to them. Most data brokers/DMPs require precise descriptions for each of these groups (e.g. groups defined by age, gender, geography, and other parameters), so that buyers can buy access to users fitting their criteria.

Are the aforementioned entities at risk with the elimination of third-party cookies?

The key to success in post-cookie branding will be establishing close relationships with publishers. Only they will be able to create the most valuable target groups in the new world, due to their direct interactions with readers. However, branding vendors without such relationships will also be able to provide their services if they build proper contextual targeting engines.

On the other hand, the use of third-party data sets, critical to many branding vendors, will become very limited. The new mechanisms will improve the transparency of information exchange between publishers and their partners, and impose restrictions on the possibility of reselling it to entities without a direct relationship with the users.

As we mentioned, the most important success factor in a cookieless world will be having direct relationships. Retargeters are highly favored in this regard, as they have always worked this way with their clients. As you already know from our previous articles, retargeters will still have the possibility to analyze the behavior of individual users on the advertisers’ sites to assign them to interest groups used for targeting. 

However, just as today, retargeting will differ between vendors, and only those leveraging the most advanced technologies, like deep learning, will achieve the best results.

Data brokers and DMP:
By significantly hindering the possibility of identifying a single user, building and selling deterministic, individual-level target audiences will be challenging, if not impossible. Data brokers/DMPs will have to focus on building probabilistic groups, which do not provide the same certainty as to whether they actually allow access to users who meet the criteria.

It is clear that from the aforementioned participants of the digital advertising ecosystem, retargeters have the best starting position to face the upcoming changes. However, they will have to adjust their algorithms to stay compliant with the new standards. Working with a partner who has access to the latest knowledge, technology, and tools and can use them adequately may turn out to be the only path to success in the new reality.