Could the loss of cookies be a blessing in disguise for big brands? According to a study by Analytic Partners, contextual ROI beats hyper-targeting for large brands. This report found that contextual targeting, matching media buys with likely interests of the target audience, is generally 1.2 to 2.5 times more effective at driving sales or other objectives than hyper-targeting based on data about individuals.
No cookies. No problem.
Over the past couple of years, the focus has been on attracting the ideal target audience. Businesses have been pouring dollar after dollar into this method. However, the fact that more sales are driven by hyper-targeted media now than five years ago doesn’t mean that it’s more cost-effective. Hyper-targeting has a lower return on investment than contextual targeting. Bad data is often the reason why. Third-party data used to target based on gender, age or other demographics is often wrong.
Why is 3rd party data not always accurate?
First-party data tends to be very strong. However, third-party data can be questionable. This is due to multiple individuals living in a household accessing the same devices and cookie deletion. Therefore, you are following multiple target demographics on the same device.
Results of a recent study
An Analytic Partners study for one automotive brand found that even though it was using its own, reliable first-party data, its hyper-targeting efforts delivered the lowest ROI of any ad placement tactic. This included contextual, broad reach, programmatic and even third-party data targeting.
Is contextual targeting the wave of the future?
Instead of focusing on hyper-targeting, businesses should take advantage of contextual targeting. Contextual targeting gets around many problems because it’s based on putting ads in places potential customers likely frequent. While the audience may extend well beyond brands’ core buyers, it may reach people who aren’t current customers but have similar profiles.
Carolina Macedo, the author, is Project Coordinator of Marketing Keys.