Privacy & Online Advertising’s More Artful Science

Published on September 11, 2023

Tracing Digital Advertising’s Evolution to Better Understand How Brands Can Effectively Advertise in the Privacy Era

In today’s privacy-focused digital advertising landscape, brands face three crucial questions: Is the current way we advertise beneficial? Is it effective? Is it even necessary?

Answering these questions requires first recognizing how we got to where we are today. The fact is the online advertising ecosystem is built upon flawed concepts that can be traced back to search – one of the earliest forms of online advertising.

At its core, search is personalized advertising. A user declares their intent by typing it into a box. For those who were buying print adjacencies, broadcast sponsorships, and radio spots, search seemed like the ultimate form of advertising.

It was simple, effective, and, most importantly, highly measurable. It provided clear and powerful metrics that could be easily analyzed in a spreadsheet.

This had the unintended consequence, though, of causing brands and marketers to assume that all other forms of digital advertising would follow suit. Online advertising has been trying ever since to measure up…and largely failing.

This failure stems from an absence of any direct interaction with a user explicitly declaring their intent —the backbone of search-based advertising. Without this interaction, online advertising is reduced to something that is closer to art than science. Although less abstract than traditional media measurement and targeting, it still falls short of the precise science of search.

It should come as no surprise, then, that digital advertising has been losing its effectiveness over the past several years when it comes to capturing consumer attention and driving brand impact. This has only accelerated as platforms and publishers become more privacy-focused.

Brands shouldn’t despair, though. In fact, in several important ways, this evolving landscape has actually opened up new avenues for digital advertising to break free from the subconscious comparisons to search.

Thanks in part to the disruption brought about by the privacy movement, there are now more effective digital advertising tools and strategies available to brands and marketers that let them get back to something closer to the “science” that defined search.

How Did We Get Here?

The foundation of targeted advertising has always relied heavily upon making inferences through user tracking, often without their explicit consent. This was made possible by a relatively straightforward technology—cookies—that was conceived during the early days of the internet. These cookies facilitated the accumulation of user data, which in turn enabled advertisers to tailor their content to specific audiences.

The pursuit of broader reach led to the expansion of inferences made by data providers. The goal was to scale up the datasets, resulting in immense (but diluted) collections of information. These vast datasets could be acquired at reasonable prices, but their actual value was often marginal, at best.

In this quest for scale, the emphasis on data quality took a back seat. One famously illustrative example of this was third-party data brokers offering US auto-intender segments of over 300 million users, surpassing the US adult population by at least 20%!

Measurement techniques, like multi-touch attribution, aimed to share credit for the value of non-search advertising. Yet, this unintentionally led to sites designed primarily for advertising purposes – these MFA (made for advertising) sites buy traffic, sell programmatic advertising, and pocket the difference.

These sites fuel content recommendation platforms which share a percentage of the fees they charge to MFA sites with the publishers that have agreed to place their module below content. Publishers, often some of the most premium and respected media companies in the world, are fueling these platforms, which fuel the MFA sites that siphon advertising dollars away from them.

The New Normal in Advertising

The targeted methods that led to the rise of digital are now facing existential challenges. Ad-blocking technologies, banner blindness, and browser limitations on third-party cookie access have all combined to reduce the overall impact of traditional digital advertising. Consumers are also more skeptical of intrusive ads and tend to seek more personalized experiences and authentic brand interactions.

In today’s environment, methods, such as retargeting, face growing criticism for their ineffectiveness and intrusiveness. Consumers are frustrated with being bombarded by irrelevant, “action-based” ads. This lack of relevance has led to a decline in consumer trust and brand engagement.

Moreover, acquiring and utilizing third-party data sources for targeting purposes is increasingly challenging due to heightened privacy sensitivities. In programmatic buying and selling, third-party data often comprises extensive datasets. However, the lack of clarity regarding its origin makes it difficult to guarantee reliability and accuracy.

Ensuring compliance with privacy regulations adds an additional uncertainty. Safeguarding data privacy while maximizing the benefits of third-party data presents a complex and often insurmountable hurdle for marketers.

An Artful Science

In contrast to the complexities surrounding targeting and measurement, display and video advertising have the potential for genuine, consent-driven user engagement across the web.

While these interactions might not fuel mammoth user segments like the 300 million auto intenders, they can still deliver remarkable impact and value for marketers.

This impact, however, is not driven by the pure scientific rigor of search but rather by the amalgamation of real data science and the constraints imposed by browsers and regulators.

The crux of the matter for brands and marketers lies in acknowledging that effective measurement can indeed be rooted in authentic, consent-driven interactions with real users across the web.

This approach deviates from the tidy measurement standards of search but is still a powerful tool that is beneficial, effective, and even necessary to succeed in today’s advertising ecosystem.

Display and video advertising‘s capacity for superior measurability compared to conventional mediums like broadcast, print, and radio underscores its resilience and adaptability.

It’s also (still) more cost-effective.

The cost per thousand (CPM) for display advertising remains considerably lower than many other less measurable mediums. Over the years 2019 to 2022, statistics reveal that digital display CPMs were notably lower in comparison to newspapers, magazines, and TV.

Evaluating the many forms of digital advertising while navigating the intricacies of user consent, data quality, and measurement is challenging. It is important to recognize that while each of these forms shares a medium with search, their measurement must be tailored to their unique attributes. The journey from targeted inferences to true engagement remains a dynamic and evolving pursuit.

As brands and marketers reconsider the benefits and efficacy of digital advertising by the new standards of today, it has become increasingly evident that centering these efforts on the consumer is vital to effectiveness and desired outcomes.

It is these authentic, consent-driven interactions that align with consumer behaviors and privacy considerations that will allow brands to move beyond the limitations of the flawed paradigms that have dogged digital advertising for years.

By establishing robust connections with target audiences based upon genuine, user-initiated engagements across the web, brands can now not only adapt to the evolving privacy era but do so more effectively than at any time in the recent past. That makes this approach not only beneficial but also critical if brands want to succeed with their digital advertising today.

Doug is a Grit Daily columnist and the CEO of Rulo, a company founded to leverage the scaled, responsibly sourced, highly actionable dataset of CivicScience in advertising. Powering next-gen audience solutions in a rapidly evolving, privacy-first open internet, the new company provides value to users, brand marketers and content creators in a permissioned and regulatory compliant fashion without dependence on third party cookies.

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