Shifting Away from User Data

GDPR. Apple’s iOS 11 Intelligent Tracking Prevention. Server-side header bidding. Internet trends point to an uncertain future for data-driven digital ad placement. User data – often the primary (if not only) driver of ad placement – will take a back seat as tighter privacy regulations shift into place. Cookies and users are slipping through the cracks, and marketers, media buyers, and media sellers are now faced with lower match rates on the audience segments they worked so hard to cultivate.

The push to keep user information anonymous is coming from many fronts, and includes government regulation with GDPR (General Data Protection Regulation), large corporations utilizing Apple’s iOS 11 Intelligent Tracking Prevention, and increasing adoption of Server-side header bidding within the ad tech industry. These three major factors alone point to a 2018 (and 2019) with an increased number of auctions on the open market where the user cannot be identified.

How much is this ad placement worth? 

In a perfect world, marketers and media buyers would be able to assign an accurate cost value to each impression on the web. Every marketer and media buyer wants to know what an ad placement is truly worth to them.  When marketers have at least some information about the user, they can make that decision quite quickly and rationally. The historical success of audience-based targeting and optimization has largely based the crucial decision of determining the cost of an ad placement on who the buyer thinks the user is.

Now, however, we are confronted with a landscape of increasingly available ad placement for sale and increasingly unavailable information on the user. Without user information for an increasing number of impressions, marketers and media buyers must try to assign a value to this ad placement. Does that mean this ad placement is worthless? Absolutely not. We can still direct a user interested in the marketer’s product to see the ad, but we must use an alternative source of information to decide on the value of impressions. Context information becomes crucial to the digital marketer’s toolkit.

What’s the context? 

Imagine an impression for sale on the open market with no user information available (which will be increasingly common). We can still make an informed decision on the ad’s worth. In fact, we can determine the location, the time of day, the day of the week, the size and location of the ad on the page, the site it’s on, the page of the site it’s on, even specifics about what content is on that page. For example, we could learn there is an impression available at the bottom of an article titled “Best Valentine’s Day Gifts for Her” dated February 12th. This page’s information tells us enough about the type of user visiting the page to assign a value to this impression and determine its worth to me as a marketer. Through its context, I can deduce enough about the user’s intentions to decide how much I’m willing to pay for an impression.

Contextual Optimization in a Post-GDPR Landscape

Understanding that we have enough information about ad space without user information means we can face the (more private) future of the industry with far less fear. Furthermore, because of the lingering dominance of user-based optimization, much of the unmatched ad space on the open market is effectively “on sale.” Buyers that have relied solely on user-based optimization will be bidding very little or not at all on these unmatched impressions. And now that you have this contextual information, it can of course work in concert with your user-based buying strategies when they are available to you, making your bidding decisions incredibly powerful and precise. In a post-GDPR landscape, contextual optimization within native advertising will be the superior strategy for digital advertisers.

Read more about Contextual Optimization from Bidtellect CEO Lon Otremba

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