The Most Practical Approach to the Individual Tracking Problem in Digital Advertising

Google’s latest announcement of not developing and using technologies that track people individually across the internet has created turmoil in the digital advertising industry. The impact was so powerful that the stock of the California-based ad tech company, The Trade Desk, dropped by more than 20%. The Trade Desk has spearheaded a technology known as Unified ID 2.0, which is based on users’ email addresses, as an alternative to third-party cookies. But in its latest announcement, Google has said it does not believe that email-based identity solutions will be able to meet rising consumer expectations for privacy. It also stated that these solutions will not be able to stand up to rapidly evolving regulatory restrictions, and therefore aren’t a sustainable long-term investment. 

The adverse effects of Google’s new announcement were not only faced by The Trade Desk, but other big players in the digital advertising industry also bore the impact. The stock of PubMatic dropped by 27.5%, while that of the world's largest independent sell-side advertising platform, Magnate, was down by 21.5%. Shares of Criteo, a French ad tech company, fell by 7.8%, while Viant witnessed a loss of 17.2%, and Live Ramp, of 14.7%. With no scope of advertising solutions based on individual tracking in the future, it has become indispensable for marketers to switch over to a solution that does not make use of users’ personal data, is fully compliant with the privacy regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), and at the same time, is highly effective and cost-efficient. This solution is contextual advertising.

Contextual advertising involves placing ads on the basis of the content a user is engaging with. Whether it is video or textual content, contextual ad targeting offers an effective way to reach the right people, at the right time, and in the right context. As contextual advertising has nothing to do with the personal data of consumers, the question of data privacy breaches does not arise. Moreover, marketers that leverage contextual ad targeting achieves highly impressive results. The effectiveness of contextual ad targeting is well-backed by research. A neuro-analytical study found that the ads that were in line with the content of the articles generated forty-three percent higher neural engagement and more than two times better ad recall. The study revealed that the contextually relevant ads were ten percent more engaging than the content of the articles overall. This neuro-analytic study also revealed that the contextually targeted ads led to a noteworthy increase in purchase intent. 

In a survey of more than one thousand participants, the majority of them said they like to see those ads on a web page that match with the content of the page. Also, the majority of the participants said that they form a more favorable opinion towards a brand whose ads are contextually relevant. Apart from being a highly effective form of advertising, contextual advertising is significantly more cost-efficient than cookies-based behavioral advertising. A study found contextual eCPM, contextual cost per mille viewable impressions (vCPM), and contextual cost per click (CPC) to be considerably lower than behavioral eCPM, behavioral vCPM, and behavioral CPC, respectively. 

Traditionally, keyword contextual targeting has been used as the main approach to deliver contextual ads. With the advent of artificial intelligence (AI) technology, AI advertising solutions have surfaced in the market that delivers a very high degree of context relevance unmatched by other approaches. AI and computer vision-powered contextual video advertising technology is now available and has the potential to revolutionize the YouTube video advertising industry. This technology accurately detects contexts like faces, logos, objects, etc. in the video, enabling the placement of ads that are highly contextually relevant to the content a user is actively engaging with. In the era of rising consumer privacy concerns, data privacy regulations, and cookie-less browsers, contextual advertising offers an effective, cost-efficient, and safe way of targeting ads to consumers, and at the same time, makes ads less interruptive, and more integrating and engaging.