IDs and contextual tracking can deliver audiences – but you don’t know who
As digital marketers adapt to life beyond the third-party cookie, many have defaulted to ID-based and contextual targeting to fill the gap. But are these methods really delivering the depth advertisers need? Rishi Bedi, managing director APAC at Ogury, unpacks the growing identity crisis in digital advertising.
Digital advertisers are caught between the complexities of ID-based targeting and the limitations of contextual targeting.
Since the gradual decline of third-party cookies, the alternative ID space has seen a race between various providers working to establish scale dominance. However, despite all their efforts, the root cause issues remain unaddressed: mass consumer opt-outs to tracking and tightening privacy regulations that have limited scale and purpose of alternative identifiers.
Then there’s contextual targeting, which ticks the privacy box but offers only a surface-level view of consumer activities and interests. Vendors have significantly enhanced their contextual offerings with machine learning, but anonymised content consumption patterns still don’t reveal the vital “who” behind the audience.
Neither contextual nor ID-based targeting captures the behaviours, passions, and purchase intent that transform data points into real audience segments brands can connect with authentically. But that doesn’t mean advertisers are out of options.
Rishi Bedi
In the red corner: ID-based targeting
The rapid expansion of the alternative ID market has left digital advertisers overwhelmed as the cookie free-for-all gives way to a fragmented landscape. Unlike third-party cookies (which, for all their flaws, had the benefit of not being “owned” by a single entity) alternative IDs operate in silos, with vendors and platforms prioritising their own proprietary solutions. Advertisers hoping to achieve scale are left juggling multiple solutions at once.
This burdens brands with additional costs and performance-draining inefficiencies that only worsen as they scale. A global campaign for a global CPG Brand, for example, would need to integrate several different ID solutions across multiple platforms, each with its own limitations and reach. Even in the best-case scenario, where a handful of dominant IDs emerge, marketers will still find themselves playing by the rules of a new batch of walled gardens, limiting their ability to build audiences on their own terms.
Then, after all that effort, alternative IDs still only represent a thin slice of the total audience pie. Public concerns around data privacy have led to widespread opt-outs from tracking, as well as increased use of VPNs and adblockers. Regulators across the APAC region continue to tighten restrictions on personal data use, making it increasingly difficult for ID-based approaches to remain viable, especially when campaigns are planned across borders into countries with differences in data privacy approaches.
With much of the open web consisting of logged-out users, alternative IDs provide, at best, a seed from which a broader — but fundamentally incomplete — understanding of audiences and their movements can be extrapolated.
In the blue corner: contextual targeting
On the other end of the scale from the dizzying complexity of IDs is the common-sense simplicity of contextual targeting. Selling furniture? Advertise on a homes and lifestyle website. Running a back-to-school campaign? Buy inventory next to a parenting advice column. It’s a form of advertising rooted in the print era, its digital iteration automating the process to programmatically match campaigns with the appropriate context.
Contextual advertising is easy to sell and deploy, but its limitations become apparent the moment it is applied at scale. While it offers a way to place ads without relying on personal identifiers, its effectiveness is inherently constrained by its narrow scope. Contextual targeting assumes that consumers viewing certain types of content are likely to be interested in related products. Great in theory, but in reality, human interests and purchasing journeys are rarely so linear.
For instance, someone reading an article about the Tour Down Under on Yahoo Sports might be served an ad for an electric bike. But reading about a race is not a reliable indicator that they’re in the market for a new bike, or that they’re even interested in an electric one. Many of the target consumers may not even engage with cycling content at all. Think about all your own hobbies for a moment — are they all reflected in your online navigation and habits, or do some of them live offline?
Contextual advertising also hits a wall when it comes to supply and demand. As more advertisers turn to context as other proxy signals for consumer interests dry up, they all end up competing for the same shrinking pool of premium inventory. The surge in Made For Advertising websites is further diluting the ecosystem, crowding out high-quality content. Unless there’s a sudden surge in reputable online publishers (and, let’s be honest, that’s not the direction the ecosystem is headed), growing demand and falling supply mean higher CPMs and deflated ROI.
Google is killing off third-party cookies.
Playing an entirely different game (and winning): personified advertising
ID-based targeting is too complex, and contextual is too limited, so where can advertisers turn for a solution that delivers scale, privacy, and precision? The answer is not to focus on individuals but on personas, leveraging zero-party data to build a holistic understanding of consumers.
Zero-party data — information that consumers willingly share — finds its strength in the age-old saying that a person’s favourite subject is themselves. Unlike behavioural data derived from tracking, zero-party data is obtained through direct interactions such as surveys and polls. Not only is this approach inherently privacy-safe, it also provides richer, more qualitative insights into consumer interests, intentions, and preferences — including those exclusive to their offline lives.
Personified advertising also overcomes the scale barriers inherent in other targeting methods. Because it does not rely on tracking individual users across the web, it can be applied universally, even in environments where identifiers are absent or where users have opted out of targeted advertising. By utilising billions of data points to refine personas and ensure on-target reach, personified advertising makes the open internet fully addressable without compromising precision or privacy.
In short, personified advertising offers a solution to reaching consumers that should not be as radical as it seems: want to know what people like? Simply ask.
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