"The Sell Sider" is a column written by the sell side of the digital media community.
Today's column is written by Michael Schwalb, GM of Data and Advertising at JW Player.
For the most part, the internet has made advertising more inclusive. Social media brought attention to stereotypes and discrimination in advertising, and in response, brands took a stand and made diversity, equity and inclusion a priority in their ad creative and messaging.
But the industry still relies on one discriminatory tactic: the third-party cookie.
This tactic is based on the outdated idea that you can make assumptions about people based on their age, race, gender, location, income or any other external characteristic. Judging a book by its cover, as they say, may be frowned upon everywhere else in our society, but it’s still standard practice in advertising.
The death of the third-party cookie will be an important step forward for inclusivity, as advertisers wean themselves from their reliance on the assumptions.
It begs an important question, though: How will advertisers target their ads without cookies? Well, one option is to go back to what advertisers used before cookies – contextual targeting.
Not Your Parents’ Contextual Targeting
Contextual targeting dates back to the pre-internet days of advertising on TV, print and radio. Without cookies, advertisers couldn’t track who was watching their ads. So they placed ads based on the surrounding media’s relevance to their offering.
But back then, contextual targeting was just as reliant on assumptions as cookies are today – if not more so. There simply wasn’t enough media for advertisers to find content that aligned perfectly with their offering.
So advertisers had to make generalizations about their audiences much like they do today with cookies: Sports watchers were most likely men, business news audiences were most likely high earners, cooking show audiences were most likely housewives and so on.
Obviously, not everybody who watches sports is a man, not everybody who reads The Wall Street Journal is wealthy and not everyone who watches Julia Child is a woman. But advertisers were forced to layer these assumptions with even more assumptions about what these different demographic groups would be interested in buying. Of course, not all wealthy people are in the market for a Mercedes or any other luxury item. The same goes for any other demographic group.
Fortunately, contextual targeting has come a long way since the pre-internet days. For one, there are infinitely more types of content on which advertisers can place ads. Hundreds of hours of new videos are uploaded every minute. So no matter how niche your product is, there will surely be thousands of videos that are directly related to it. The challenge is in finding them.
In the past, brands using contextual targeting could only place ads on broad categories of videos, diluting their ad inventory with videos unrelated to their offering. But recent advances in AI and natural language processing made it possible to categorize the content of any video with laser precision.
To put that in context, imagine a brand selling American cheese. A few years ago, they would only be able to target videos in the “Food/Drink” category. Their ads would be shown on plenty of videos for fine dining, vegan recipes and mixology, wasting ad spend on audiences who probably aren’t in the mood for good old Velveeta. But today, the same brand could target videos with much more specific keywords – for example, “grilled cheese” or “best dip recipes” – and place ads on these videos at scale across the web.
Another added benefit of the advances in contextual targeting is that advertisers can target ads based on the content of the videos themselves, rather than the URL hosting them, which opens up even more inventory. So, for example, if Sweet Baby Ray’s wanted to advertise on videos of barbecuing, they could place ads on an Insider video with barbecue tips for beginners, which would otherwise be categorized as “News” content based on the URL alone.
The difference is that advertisers no longer need to assume who may be interested in their offering. They can know exactly who is interested, regardless of their demographics. It doesn’t matter if the audience is rich, poor, male or female – what matters is that they are watching a video about grilled cheese, barbecue or whatever else a brand is advertising.
Making the Switch to Inclusive Advertising
But brands only hurt themselves by clinging to the cookie. By limiting their ad targeting to audiences they assume are interested based on their age, gender, race, nationality or any other demographic detail, advertisers miss out on reaching potential buyers whose interests don’t line up with expectations. In other words, it pays not to assume what people want.
With contextual targeting, you already know that audiences are at least somewhat interested in your product. Videos are now an important part of the buyer journey and often go-to sources for research on upcoming purchases. At the very least, people watch videos that reflect their interests and hobbies. Unlike with cookies, you don’t need to invasively track your audience's interests over time; you can show ads related to what people are watching in the moment.
Ultimately, contextual targeting is a win-win for advertisers and audiences alike. Audiences get ads that are more relevant to what’s currently on their mind without sacrificing their privacy. They also don’t get served ads that make assumptions about them based on their demographics. Meanwhile, advertisers can reach more engaged audiences without limiting their reach by discriminating along demographic lines.