Solving the Advertising Reach Crisis

By George Alderson, Customer Success Manager, Advertiser at Permutive

Between significant privacy changes and the deprecation of cookies, programmatic advertising isn’t delivering on its promises. Advertisers can only reach 30% of audiences on the open web, and with Google phasing out third-party cookies and Apple launching its Privacy Manifest, this is likely to decrease. For publishers, more than 8 in 10 (83%) are already experiencing significant revenue loss as a result of working with the open marketplace in 2023.

The OMP once transformed how advertisers and publishers worked together. It no longer provides a viable route for advertisers to reach consumers.

Advertisers need sustainable solutions to reach relevant and engaged audiences, but the leading contenders to solve the challenge replicate the issues experienced with third-party data. Solutions that use fingerprinting and rely on email addresses are not privacy-safe and won’t scale. Apple plans to reject all apps using fingerprinting early this year and seems sure to go the same way as cookies.

Focusing solely on email addresses to match user data, including hashed ones, while more respectful of privacy and consent, won’t get advertisers near reaching 100% of available audiences. Less than 10% of consumers are currently logging into sites with their emails when browsing, where focusing on direct match rates and scaling this audience will only serve as an unreliable and ineffective way of reaching consumers.

As the industry moves closer to third-party deprecation, the critical opportunity for advertisers and publishers lies in direct partnerships and data collaboration. First-party data analysis and modelling of known audiences enables both parties to scale consumer reach intelligently while protecting user privacy.

Opening up reach through publishers

Resolving the reach problem requires a shift toward more direct partnerships between advertisers and publishers. Publishers have a direct link to their readers, which has enabled them to build high-performing cohorts of authenticated, contextual, declared, and behavioural signals.

By working directly with publishers, advertisers benefit from being able to harness that data and address the 70% of audiences they can’t currently reach. A large global technology brand that spends significant money on digital display advertising is working to solve the reachability crisis. They ran a global campaign in the US, Canada and the UK across 15+ publishers, increasing their reachability by 150%.

Advertisers can also level up publisher first-party data by matching their own datasets, boosting the effectiveness of targeting across publisher sites. Publishers can leverage signals and model them to reach advertisers’ target audience.

A great example of a brand going direct is Hershey’s. The chocolate brand, which spends between $350 million and $450 million on advertising every year, realised it was not showing up in premium environments despite all of the money it was spending. To tackle this, Hershey’s now aims to buy 80% of its media through private marketplaces and only 20% on the open web.

Direct to the future

Direct relationships between advertisers and publishers result in transparency in audiences and campaign spending, drive ad effectiveness, and promise improved insights into consumer behaviours. An example is US-based publisher Penske Media Corporation (PMC); they can apply granular audience targeting capabilities across 100% of their audience, including passerby audiences. Using first-party data, PMC can find the best audience to help partners meet their objectives. It is mirrored in the marketing funnel to deliver campaigns at all customer journey stages, including awareness, consideration, and conversion. The results for PMC’s campaigns show a 5x increase in performance (CTR) in campaigns that only used first-party data and a 5x increase in driving effective CPA for a clothing retailer when using PMC’s first-party data.

Collaboration is vital to the present and future of digital advertising.  Brands and publishers alike must work to build first-party data and direct partnerships rather than using unreliable and non-privacy-respecting solutions.

The reach crisis facing advertisers is evident, but it doesn’t need to be a problem, providing advertisers and publishers explore technologies that will enable them to work closer together.