In today’s digitally-enhanced landscape, the phrase ‘being a one-trick pony’ has gained renewed significance given the wide array of market players. As the era of third-party cookies draws to a close, advertisers are understood to be seeking ways to adapt, moving beyond reliance on first-party data. In this context, alternative targeting methods have emerged, including contextual targeting, data clean rooms, and privacy-preserving cohorts, each presenting solutions to the challenges encountered in modern advertising. 43% of global marketers upheld the top concern in media and marketing strategies as the diminishing ability to calculate campaign performance on open web and tech platforms, followed by 39% emphasising on the lack of strategies to approach the time beyond cookie deprecation, and around three out of 10 respondents mentioning the loss of access to third-party data as a significant concern, as per a November 2023 survey by Statista, a data and business intelligence firm. On that note, the mentioned techniques seem to be growing in importance to tackle traditional cookie-based tracking, due to privacy concerns and regulatory pressures. “As the digital marketing landscape evolves and cookie-based tracking loses relevance, I believe solutions are emerging to cater to customer engagement while respecting user privacy. In this regard, contextual targeting takes centre stage, analysing the content a user is engaged with. Furthermore, clean rooms offer a secure environment for collaboration. Finally, privacy-preserving cohorts group users with similar characteristics anonymously. This allows them to reach relevant audience segments while prioritising user privacy,” Abhijat Shukla, vice-president – data science, WebEngage, a marketing automation platform, told BrandWagon Online.
Adapting to a post-cookie world
Since Google announced its plans to deprecate third-party cookies by early 2025, the advertising industry has been in a frenzy, scrambling to determine the way forward. The emergence of first-party data has emerged as the likely candidate to chart the upcoming path for advertisers, with 88% of marketers mentioning the increased importance of first-party data, in a 2022 report by Acquia, a software-as-a-service (SaaS) company. However, utilisation of contextual targeting, data clean rooms, and privacy-preserving cohorts are considered equally important for shifting to the cookieless future. “I believe contextual targeting, clean rooms, and privacy-preserving cohorts provide solutions that prioritise user privacy and consent whilst allowing for relevant and personalised advertising. These strategies enable transparency and control for users over their data, ensuring that advertising remains relevant and personalised whilst respecting privacy and complying with data protection laws. Advertisers and technology providers strive to balance personalised advertising with user privacy and ethical standards by implementing measures such as transparency, consent management, and data anonymisation,” Sam Noble, CTO, Veera, an ad-free browsing application, mentioned.
In 2023, global spending on contextual advertising was estimated at $227.38 billion, with projections suggesting that by 2030, this figure will reach $562.1 billion, as stated by Statista. Media reports suggest that contextual advertisements can generate click rates worth 50% more and increase conversion rates by 30% in comparison to non-contextual advertisements, with signs that 74% of advertisers have already started utilising contextual information to prepare for a third-party cookie-deprecated landscape. As far as data clean rooms are concerned, 2023 was predicted as the year for 80% of advertisers, having media budgets worth a million dollars and beyond, to shift towards using data clean rooms, as stated by Gartner, a technological research and consulting firm. On account of cohort marketing, it was found that 81% of advertisers transitioned from device-oriented focus to group-level marketing, as per insights from a study around transfer to first-party data utilisation by Claravine, a content data management platform. Cohort-based targeting is considered an application of first-party data, necessitating data enrichment beyond basic demographics, device details, and behavioural insights to improve targeting results.
Companies and challenges
As for advertising strategies in a cookieless world, companies are believed to have jumped on the bandwagon. From the contextual targeting perspective, companies include BuzzFeed, for understanding the content users are engaging with and serving ads relevant to those topics, The New York Times, for offering contextual ad placements based on the specific articles or sections users are browsing, and Spotify, to consider factors such as genre, mood, and listening history to deliver relevant ads during podcasts or music. In terms of data clean rooms, companies such as Nielsen, LiveRamp, Experian, among others, provide their own data clean rooms to enable collaboration among advertisers without hampering data privacy. Lastly, for privacy-preserving cohorts, Google’s Privacy Sandbox initiative includes proposals such as Federated Learning of Cohorts (FLoC), which groups users with similar browsing habits without revealing individual data points, along with Flock’s usage of privacy-preserving advertising solution that uses machine learning (ML) to create audience segments without user identifiers and Meta’s, formerly Facebook, exploring of privacy-preserving cohort solutions for targeted advertising within their platforms. “Customer Data Platforms (CDPs) are also emerging as a solution for marketers to organise and analyse their customer data, activate their customers across the channels, and measure the efficacy of their marketing campaigns. It’s considered important to identify and invest in a CDP that can activate the customers across owned media and paid digital media. Data clean rooms can complement CDPs by creating a privacy safe environment to onboard the brand’s first party data, merge it with relevant second and third-party data assets, understand the customer and prospect base, activate the audiences across digital channels and measure the performance,” Lakshmana Gnanapragasam, SVP – analytics, Epsilon, highlighted.
However, a question which seems to revolve around is the presence of legal and regulatory challenges that arise with implementing alternative targeting methods like contextual targeting and privacy cohorts, and how do these challenges vary across jurisdictions? Privacy regulations such as General Data Protection Regulation (GDPR) and Digital Personal Data Protection (GDPR) Act have ‘broad’ definitions of personal data. Even anonymised data sets used in clean rooms or cohorts might be considered personal information, depending on the level of detail and potential for re-identification. This can create uncertainty for companies who struggle to understand what level of anonymisation is sufficient. Even with anonymised data, users might want control over how their data is used for advertising. Market reports have upheld the need for companies, availing these kinds of services in their jurisdictions, to be savvy in the local laws and tailor their data journey across regions, accordingly, to ensure both legal compliance and consumer trust. “Currently, contextual targeting doesn’t face specific legal challenges. However, privacy cohorts can face challenges based on limiting the number of users in a cohort that might be mandated to minimise the risk of re-identification and regulations that might specify the types of data allowed for cohort creation. Overall, companies implementing alternative targeting methods need to navigate the legal and regulatory landscape. Understanding regulations in each jurisdiction they operate in is crucial. Building a user-centric approach that prioritises transparency and respects user control over data is essential for navigating this evolving landscape and ensuring compliance,” Jacob Joseph, VP – data science, CleverTap, a mobile marketing SaaS company, concluded.