How brands can adapt to the changing face of targeting – Nielsen

For any brand, regardless of industry or region, consumers should be priority No. 1. It’s true that sales are any company’s end goal, but sales—and generating them—depend on consumers who are receptive to what a brand has to offer. And when it comes to brand building, marketers need to be able to drive engagement, awareness and consideration among people who aren’t already customers. 

The premise of audience targeting certainly isn’t new, but with rapid change in what’s possible, marketers need different tactics and strategies than the ones they’ve been leveraging over the past 20 years or so. Addressable digital advertising has long been the channel most used for targeting, and the increasing adoption of internet-connected devices and smart TVs is now allowing marketers to bring that same thinking to linear television and other “traditional” media at scale. Addressable digital itself is also changing with the rise of privacy-safe browsing, spurring a new set of challenges and opportunities. Let’s look more closely at these two areas.

Addressable technology

Digital has been the predominant channel for ad targeting, largely due to addressability—the ability to deliver an ad to a specific intended target, at scale. While that addressability is an advantage, marketers must note that it doesn’t equate to perfection. Data from Nielsen Digital Ad Ratings (DAR) highlights that the average on-target percentage of ads across computer and mobile is 63%—even for targets defined by age and gender—targets for which there’s significant data coverage and quality.

That doesn’t mean that marketers shouldn’t use data to reach specific audiences. Importantly, they should leverage high-quality, deterministically sourced audience data to improve accuracy. Marketers would also be wise to step up their measurement of targeting accuracy and sales impact to be able to compare data sets and assess their value.

Third-party identifiers

No discussion of digital targeting would be complete without a consideration of the future state—a world without third-party identifiers. But even in advance of that future state, the current reality is that about 44% of U.S. internet users are already using browsers free of third-party cookies, and many users have already opt-ed out of mobile device tracking since Apple IOS 14.5 upgrade. That represents a significant portion of digital users already operating as if third-party identifiers are gone. In a blog post from earlier this year, DStillery noted that in the endstate, up to 90% of display impressions will have no third-party ID attached to them. When impressions are delivered to an anonymous viewer, addressability and ad performance are at risk. 

There are three primary responses for an advertiser to this growing challenge:

  • Lean into first party-data with persistent person-based identifiers
  • Leverage the addressability of digital video; it’s the future (CTV, smart TVs, etc.)
  • Leverage innovations in optimization vs. tapping into decades-old contextual targeting technology

The collection, maintenance and application of person-based identifiers requires an investment in first party data—the data companies collect directly from users or people in a consent-compliant way. This data is rooted in more persistent ID forms, such as email address, phone numbers and physical address. After being privatized through a variety of shared hashing protocols, these IDs can be matched and shared for targeting.

To excel in this ecosystem, advertisers must also have targeting capabilities that are interoperable with the person-based ID choices of the publishers where users consume content. This means speaking the same ID language of the content creators/publishers who attract consumers to their properties.

From an economic standpoint, effective marketing (engagement, awareness and consideration) is also cost efficient. While advertising budgets continue to come back on line in many markets, quality audience data is critical to media efficiency. That’s where developing a data strategy—and data connectivity for activation—is a critical undertaking. And many marketers remain stymied by a lack of quality data.

Importantly, brands can’t approach targeting in a vacuum, and audiences shouldn’t be copy and pasted from one channel to another. Brands should be leveraging a comprehensive audience strategy across linear and digital channels that leverage each medium’s strengths. These efforts should be made alongside measurement that can help validate sales and brand lift impact—ideally while campaigns are in flight rather than months after the fact.

For additional insights, download our recent Advertiser Playbook.

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