The New Imperative for Ad Tech: Promoting Addressability

By Andrew Baron, SVP, Marketplace & Addressability, PubMatic

The ongoing deprecation of third-party cookies and similar identifiers is significantly affecting the digital advertising landscape, threatening the addressability that underpins targeted advertising and accurate measurement. This shift challenges advertisers to achieve their campaign objectives and publishers’ ability to generate advertising revenue. Consequently, it’s requiring today’s ad tech providers to re-envision their roles within the larger advertising ecosystem.

The evolving role of ad tech within the digital ecosystem has implications for publishers and advertisers alike when it comes to refining their approaches to addressability in a cookieless world. Here are the key points to understand.

Alternative Targeting Strategies to Embrace

In response to today’s mounting addressability challenges, buyers and sellers are exploring alternative strategies for audience targeting without cookies. These include:

  • Google’s Privacy Sandbox: Understandably, as Google phases out third-party cookies in Chrome, it’s looking to give the industry an alternate means of privacy-preserving ad targeting and measurement.
  • Deterministic Approaches: Using alternative IDs developed either by publishers or through partnerships with ID-specific vendors, these efforts aim to replace cookies with new forms of identifiable information.
  • Probabilistic Methods: Employing statistical models to infer audience characteristics based on available data, these methods enable strong prospecting campaigns and targeting at scale, but with less precision than deterministic IDs.
  • Contextual Targeting: Leveraging the context of web content to target ads, contextual targeting sidesteps the need for individual identifiers altogether.

The Role of Sell-Side Tech in Addressing Signal Loss

Preserving addressability in today’s digital ecosystem will require a blend of the above strategies. For individual publishers, adapting to ongoing marketplace changes and supporting advanced targeting strategies could be prohibitively resource-intensive. Thus, the strategic imperative has shifted toward ad tech. In the face of signal deprecation, our industry must ensure addressability through innovative targeting and measurement solutions.

Ad tech companies that are embracing this new role within the digital ecosystem are adapting by building capabilities within all of the above spaces. Here’s how:

Embracing the Sandbox: The broader ad tech industry must collaborate with Google and its Privacy Sandbox to make it as strong as possible. When it comes to protecting publisher revenue, like a variety of other solutions available, Google’s evolving toolset will play a key role, and our entire industry has an interest in working with the company to make this solution the best it can be.

Fueling Deterministic Strategies Across IDs. Ad tech should play a pivotal role in facilitating the adoption and integration of alternative IDs. By partnering with ID-specific vendors and developing solutions that simplify the management and usage of these IDs, our industry can help publishers maintain precise targeting capabilities. This includes building infrastructure that supports the seamless operation of proprietary IDs and fostering collaborations that expand the reach and effectiveness of these identifiers. Certain IDs will surface as the frontrunners of the industry, and together, these will be stronger than the cookie.

Extending Addressability with Probabilistic Methods. Recognizing the limitations of deterministic strategies alone, our industry also needs to enhance addressability by incorporating probabilistic modeling into its offerings. These methods, which infer audience characteristics from patterns in aggregated data, offer a scalable (albeit less precise) alternative to cookie-based targeting.

Probabilistic solutions offer scale to buyers and incremental revenue to publishers. By integrating probabilistic models into platforms, the ad tech ecosystem can provide publishers with tools to reach their desired audiences effectively, even in the absence of direct identifiers.

Supporting Publishers with Better Contextual Targeting. As signal deprecation undermines the efficacy of identity-based targeting, contextual targeting emerges as a more vital strategy than ever. Our industry can support publishers by enhancing the capabilities for contextual targeting, leveraging advanced natural language processing and machine learning technologies to analyze content and match ads to the most relevant environments. This approach not only preserves addressability but also aligns with growing concerns about privacy, offering a non-intrusive way to deliver targeted advertising.

The ad tech industry can and should guide publishers in optimizing their content categorization and metadata to improve the accuracy and effectiveness of contextual targeting. In doing so, they can ensure that ads are placed in environments that match the advertisers’ objectives and audience interests.

By embracing these enhanced roles, the ad tech industry can facilitate the transition to a new era of digital advertising, where addressability is maintained through a blend of cohort-based, deterministic, probabilistic, and contextual strategies. This holistic approach not only mitigates the impact of signal loss on targeting and measurement but also underscores the evolving value proposition of ad tech in the digital advertising ecosystem. Advertisers and publishers alike should be prepared to screen their partners for these enhanced capabilities and ensure they’re delivering the needed infrastructure and guidance to preserve addressability in the digital advertising ecosystem of the future.

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