Forrester: Advertising Faces ‘Imminent Upheaval’ From Targeting Practices

 

The advertising industry faces “imminent upheaval” as their tracking-heavy approach to digital advertising is being rejected by browsers, regulators and consumers.

“Change is no longer a nice idea. It has become a requirement,” said Forrester VP and principal analyst Joanna O’Connell, who authored a report last week about how marketers need to address this change.

Instead of using data to provide relevant advertising, marketers need to “reorient around delivering consumer value,” O’Connell said.

Of course, marketers may be preoccupied with handling the coronavirus pandemic right now. But they still need to prepare for beyond that – especially as regulations such as CCPA and policies including Google Chrome dropping third-party cookies leave no other option.

Here’s how O’Connell believes the digital ad industry should face these upcoming challenges.

Create nuance in targeting strategies

Instead of doing mass advertising and 1:1 advertising, brands should create a “sliding scale of targeting and personalization based on relationship intimacy,” O’Connell said.

Retargeting a one-time ecommerce site visitor should be avoided. But a loyal customer will likely be receptive toward hypertargeted marketing because it shows the brand values them as much as the person values the brand.

This nuanced approach requires that marketers own their own data. Some, including Warby Parker and Noom, use quizzes to learn about their customers and tailor content and offers for them. O’Connell also recommended working with publishers to access their data through their own trusted relationships.

Brands also shouldn’t think rigidly about segments. They should be wary of assuming all consumers in the same targeting segment feel the same way about targeted advertising.

Even broad age and gender targeting can feel too confining, because 52% of millennials believe gender is a spectrum and 12% identify as transgender or gender nonconforming, O’Connell said, citing a Forrester report on gender evolution.

Innovate tech and ad formats

Beyond their targeting strategy, marketers should also look at how they can deliver value through less intrusive ad formats.

The Hulu “pause” ad for Charmin, displayed only when content is paused, delivered a “Need a break?” message in a normally ad-free space without bothering consumers.

Brand should also pay attention to advertising’s tech infrastructure, and should talk to all the companies making a play in the identity space, O’Connell said. They should also familiarize themselves with the IAB Tech Lab framework, which focuses on respecting consumer choice.

How brands act will determine consumers’ receptivity to ads, which could trickle down into the actions of web browsers and regulators.

“If the cookie is replaced by identity infrastructure, and we abuse identity, we are going to end up in the same situations. It could fail if we misuse it, intentionally or unintentionally.”

To avoid mistakes during a time of imminent upheaval, brands just need to put themselves in their customers’ shoes, O’Connell said. “The future of omnichannel must be customer obsessed.”

 

 

 

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