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Agencies Undermine Mobile

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christopherhansen“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Christopher Hansen, president at Netmining.

It seems silly to think that mobile Web usage caught the advertising industry off guard.

Existing ad companies, be they agencies or ad tech, were so entrenched in their ways that to just serve ads on mobile devices required a whole new batch of companies to enter the space. The agency model was stuck on the concept of cookies and desktop tracking, and mobile swept right in and started stealing traffic.

So agencies stuck mobile in a silo, and now they’re desperately trying to figure out how mobile can become part of a larger plan, rather than its own unique line item. Perhaps the only way to do that is to abandon the cookie.

The No. 1 reason why agencies still struggle with mobile is that it’s not cookie-based. Cookies became the default measurement mechanism, or at least the one we have come to understand so well, so many agencies built their entire digital strategy around cookie targeting. Cookies make tracking easy, but they’ve spoiled marketers, agencies and ad tech companies for some time. Despite the predictions, cookies aren’t necessarily dying. Their value, however, is diminishing.

Mobile introduces a new level of complexity where strategies as simple as remarketing are much harder to execute. Mobile targeting is still in its infancy, and plans created with a mobile component are not 100% measurable. Marketers need to accept that and get used to statistical values, as opposed to absolute values, which require a major shift in mindset. Measurement will improve over time, but it may never be as clean as the cookie.

In place of the cookie, the industry is looking for a new secret sauce, which will likely come from stitching together many data sources across multiple devices to build unique targeting IDs.

Registration data is one component that will likely go into this new profile ID, giving players like Google, Twitter, Facebook and Yahoo an upper hand through their access to user data. But other cross-device identifiers will have to go into this new ID to create a robust, yet privacy-friendly, picture of an audience. The industry needs an ID gumbo, layered with several small ingredients, yielding a combination that works much better than its individual parts. There’s a lot of data points to choose from, including the mobile channel in app or Web, app category, platform, carrier, device type and device screen size, among others.

The cookie is simple and easy, but that simplicity has meant that the industry hasn’t tried to push the technology to do more. This new stitched-together ID is less precise than a cookie, which is good from a privacy standpoint, but it has more data points, creating a robust profile that retains its richness across devices.

In the meantime, ad tech has led the effort to pull mobile out of silos by advancing the data science and systems behind it. Consolidation is accelerating at the same time as display and search companies both try to make mobile part of their core offerings. Mobile will be fully integrated into display and search within the next two to three years, but agencies must lessen their reliance on cookies before then.

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The shift is comparable to the electric car. Electricity is more efficient and better for the environment than gas. While nearly every manufacturer has a hybrid model, we are only just starting to see this shift, although automakers haven’t yet abandoned gas to go all-electric for every model.

In the end, agencies don’t really have a choice but to navigate the pain and get to a point of deeper understanding. The bottom line is that consumers are shifting their Web surfing away from the desktop and toward their mobile devices. Marketers have come to expect data-driven marketing across platforms with some level of personalization and localization. Cookie-based models simply won’t cut it.

Follow Netmining (@Netmining) and AdExchanger (@adexchanger) on Twitter.

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