First-Party Data Can Solve Ad Targeting’s Bias Problem. Here’s Why It Hasn’t.

Ad targeting concept illustration

By Reggie Wideman, Chief of Staff, Head of Strategy, Lytics

For advertisers everywhere, traditional ways of targeting are failing to honor new ways of thinking (or the way many modern consumers today live). With more data at our disposal than we know what to do with, brands no longer need to make assumptions about who someone is and what their demographics mean about them in order to reach them. Nonetheless, they continue to do so, and many even fail to recognize their assumption-based approaches — despite audience frustration and growing usage of ad blocking technology from disgruntled web users.

Reliance on assumptions about who our ideal customers are and what they want have inadvertently injected bias into our acquisition strategies. It used to be that the majority of families fit the traditional, nuclear mold (think: mom, dad, and at least two children). Nowadays, only 46% of families do. Today, it’s more common to see single-sex couples, divorced parents, childless single adults, etc. Where it was once expected that women of a certain age would be stay-at-home or working moms, today, one in five women are actively choosing not to have children — and for educated women who hold at least a bachelor’s degree, that ratio jumps to 1 in 4. Ad targeting, however, has not yet caught up with the times.

Nonetheless, to claim that unintentionally biased advertising is solely a cause of societal change would be misguided. Without exploring our unconscious biases and how they play out in our advertising strategies, the story of why this is happening remains incomplete. (To dive even deeper, join our discussion on October 17th with Reggie Wideman, Head of Strategy at Lytics, Giusy Buonfantino, Vice President, Consumer Packaged Goods Industry Solutions at Google Cloud, and Steven Moy, CEO of Barbarian,  at 4:10 p.m. ET and learn to check your ad targeting biases at the door.)

How unconscious bias affects ad targeting

Biases come in all shapes and sizes. And unfortunately, advertisers often make assumptions about their audiences based on demographic data, leaving room for things like unintentional gender, age, racial biases, etc. Here are some of the ways gender bias alone, as an example, plays out in the world of advertising.

  • 76% of female and 88% of male marketers believe they avoid gender stereotypes when creating advertising. (Martech)
  • Still, ad targeting is extremely skewed within specific product categories like baby products, laundry products and household cleaners — where women make up 98% of the targeted audience. (Martech)
  • While 75% of fathers consider themselves responsible for the emotional well-being of their children, only 20% of these fathers consider this dimension of their paternal role to be reflected in advertising.
  • Women buy 62% of all new cars in the U.S. But you wouldn’t be able to tell that by watching the average, hypermasculine car ad. (Streetsblog)

Nonetheless, ad targeting’s bias problem is much bigger than gender. As Forbes put it, “targeted ads reinforce bias by seeing only a slice of our lives.” If you’re an advertiser who may be guilty of unconscious bias, here’s our hot take: think outside the box; don’t put your customers in one. Here’s how.

Make ad personalization about intent, affinity, and interest — not demographics

Brands all want to —and think they do — understand their customers. But if you only understand them on a demographic level, do you really know your customers? The easy answer is no.

Lytics’ own research shows that behavioral data is as much as 20x more predictive than demographic-based data. In fact, with the right tools and data science, behavioral analytics are the leading predictor of customers’ actions 86% of the time, compared to demographics which are only 4% predictive.

Translation: if you want your customers to engage with your brand, you need to focus on what makes them tick, not on their attributes.

But why aren’t more advertisers digging deeper, and leaning on more meaningful customer data for targeting? There are a few hurdles in the way, but they can, and should, be addressed. 

What’s blocking truly bias-free advertising?

Step one: we need to be honest with ourselves.

Every marketer and advertising professional in the business should not just be aware of their own biases, but actively work against them and embrace technologies, like customer data platforms, that help make bias elimination a foolproof process.

But actually executing on bias-free, first-party data-driven ad targeting strategies also continues to pose a challenge for brands.

Despite the fact that first-party data records a user’s preferences and behavior, and helps brands identify and engage targeted audiences with ad experiences that address their unique needs, 32% of marketers admit they are still underutilizing first-party data in their advertising (even with the end of third-party cookies coming in 2024). What’s even more concerning is that, among marketers who are making an effort to embrace a first-party approach, almost half feel that the information they are trying to access when building campaigns is inaccessible or hard to find.

With reliable first-party data, instead of targeting your total addressable market based on demographics, your ads will be geared towards those most likely to take action.

Why is now the time for change?

Want more high-intent, predictive audiences? Lean into first-party data and take another step toward leaving your biases behind. As a bonus, your customers also benefit from hyper-relevant and meaningful messaging served at the right time.

Recent data shows that 41% of customers agree that an ad placed around relevant content sparks a positive brand perception. Eliminating bias from your advertising can mean more meaningfully personalized, relevant ads, and more delighted customers.

Better customer engagement. Deeper brand-customer relationships. Higher ROI. Saying goodbye to bias in ad targeting isn’t just the right thing to do, it’s also a pretty lucrative business driver for any scaling brand.

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