{"id":11467,"date":"2022-02-09T18:10:06","date_gmt":"2022-02-09T18:10:06","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/02\/09\/marketers-look-to-adtech-and-agencies-to-solve-the-addressability-problem\/"},"modified":"2022-02-09T18:10:06","modified_gmt":"2022-02-09T18:10:06","slug":"marketers-look-to-adtech-and-agencies-to-solve-the-addressability-problem","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/02\/09\/marketers-look-to-adtech-and-agencies-to-solve-the-addressability-problem\/","title":{"rendered":"Marketers look to adtech and agencies to solve the addressability problem"},"content":{"rendered":"

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NEW YORK \u2014 Addressability and privacy present nothing less than \u201cexistential challenges\u201d to the advertising industry, said Anthony Katsur, CEO of IAB Tech Lab, on the Annual Leadership Meeting stage this week. Add this to CEO David Cohen\u2019s calls for \u201cburning impatience,\u201d and the threat to $8 to $10 billion of ecosystem revenue <\/a>by 2025, and we seem to have a five-alarm fire on our hands. \u201cSitting on the sidelines is probably at your peril,\u201d said Cohen later in the day.<\/p>\n

The twin threats to addressability<\/h2>\n

Cookie deprecation (which, as several speakers pointed out, has already happened across the web) and ever more stringent regulation dominated the day\u2019s discussions. Cohen\u2019s keynote condemnation of the \u201csomeone will figure it out for me\u201d attitude was underlined by a lack of engagement from brand marketers. At one session, specifically focused on alternative identity solutions, most of the audience were adtech professionals. There were a handful of agency marketers and a couple of publishers. When the moderator asked brand marketers to identify themselves, not a hand was raised.<\/p>\n

One audience member affirmed that marketers just don\u2019t have the time or skill-sets to solve these problems themselves. First-party data, alternative identifiers, clean rooms, privacy-enhancing technologies (PETs) \u2014 some combination of those can surely be made to work by adtech, or the agencies, or the publishers. And then, of course, there\u2019s Google and its Topics API<\/a>.<\/p>\n

Google doesn\u2019t have all the answers<\/h2>\n

Topics is the replacement for FLoC, Google\u2019s proposal to allow interest-based advertising to anonymized audiences. Topics is certainly easier to understand. It will assign a small number of interests to a user, changing every few weeks, enabling advertisers to target those users without knowing their identities. This does preserve cross-domain targeting and is thus richer than contextual advertising. If a consumer searches for camping equipment on outdoor activity websites, the same consumer could be shown ads for tents when shopping online for clothes or groceries.<\/p>\n

But starting with a list of several hundred topics, and with no plans to expand the list to many thousands, the Topics API is surely a very blunt tool. It might detect a consumer\u2019s interest in hotel rooms, but how could it show ads for hotels at any specific destinations?<\/p>\n

The same reservation was expressed in a forthright comment by Mike Woolsey, COO at data and identity solutions platform Lotame: \u201cEven the difference between \u2018sports\u2019 and \u2018hockey\u2019 can be the difference between worthless and worthwhile for the digital marketer. The latter category might just be 3 to 4% of the traffic in the former. Google could never survive relying on such basic tools for it\u2019s vast empire of authenticated traffic, and to bequeath it to the rest of the world borders on insulting for most of the digital media industry.\u201d<\/p>\n

Woolsey concedes, nevertheless, that Google is trying to be helpful. \u201cEver since some of these regulations like CCPA and GDPR became effective, there are certain players that are independent adtech, not just Google, saying we need to go back to 2003, 2004, contextual targeting. I know these regulations are complex and hard to comply with but I just don\u2019t feel that it\u2019s a genie that will ever go back in the bottle.\u201d<\/p>\n

He also concedes that Topics is an improvement on FLoC. \u201cOnly a data scientist could understand how to develop methods to use the FLoCs, and a person could only be in one FLoC at a time \u2014 and there\u2019s different cells of interest people have.\u201d But Topics, he says, \u201cis a child\u2019s toy.\u201d<\/p>\n

Lotame, of course, offers its own identity solution, Panorama ID, which probabilistically clusters IDs from different devices \u2014 CTV, phone, web-based, and so on. \u201cWe operate on the open web,\u201d he said, \u201cand we do require consumer consent.\u201d However effective this approach is, it\u2019s one of literally dozens of alternative identity solutions, in many different flavors from The Trade Desk\u2019s Unified ID 2.0 and LiveRamp\u2019s ATS to Tapad\u2019s Switchboard and Neustar\u2019s Fabrick.<\/p>\n

This is the universe of complexity many marketers are reluctant to enter.<\/p>\n

Read next: Addressability is a \u2018slow-motion train wreck,\u2019 says IAB CEO<\/a><\/em><\/strong><\/p>\n

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Looking for common ground<\/h2>\n

Opposing camps at the IAB meeting were searching for common ground. On the one hand, there were voices \u2014 including from publishers like News Corp and Business Insider \u2014 who saw first-party data, given with full consent \u2014 as the future of targeting. This is despite investment in first-party data being flat year-over-year according to IAB\u2019s 2022 \u201cState of Data<\/a>\u201d report<\/p>\n

On the other hand, voices from the adtech community were still talking about more extensive targeting capabilities while acknowledging they would need to respect consumer privacy in a way that cookie-tracking never did. But as Woolsey told us, \u201cSome of the regulators, and a lot of the people that are in regulators\u2019 ears, really just mean for the end of the use of identity in digital media. That\u2019s the objective, so nothing is really going to be okay.\u201d<\/p>\n

Nevertheless, that\u2019s where clean rooms or PETs might come in. Clean rooms are neutral space that can cluster first-party data about the same customer from a number of brands. PETs? Well, some PETs, like multi-party computation, seem indistinguishable from clean rooms. PETs are already at work in the financial and health sectors, for example enabling sharing of insights about COVID<\/a> without sharing sensitive patient information.<\/p>\n

This proliferation of terms, however, shows how big a challenge IAB faces. There were calls at the meeting to finally develop a common taxonomy for discussing addressability and privacy. There were also calls for standards around alternative identity solutions and measurement. The IAB points out that standards are effective only if they\u2019re generally adopted. It\u2019s hard to see that happening when so many vendors are competing for commercial advantage in the identity space.<\/p>\n

The industry is trying to sing in harmony and IAB is striving mightily to direct the choir. Right now, though, cacophony would be a better word.<\/p>\n

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