A version of this content appeared in Street Fight.
If you’re a publisher or advertiser, and especially if you’re operating in the mobile space, you’re probably getting a little tired of being told about new forthcoming privacy changes that are sure to upend your monetization and marketing plans. The simple fact is that change is the only constant in today’s digital landscape; if you’re waiting for things to simmer down, you might need to find a new industry. It’s time for us to start looking longer-term and to plan for data signal sustainability.
There’s no getting away from the need to remain nimble when it comes to today’s online and mobile ecosystem. But that doesn’t mean publishers, developers and marketers should have to rewrite their playbooks entirely every time another state passes a new piece of privacy legislation or a major tech platform tweaks its data-sharing practices.
Monetization Shifts (Again)
While many of our industry’s sustainability conversations today are rightly focused on the vital matter of environmental sustainability, there’s another resource we need to be treating with similar care and concern: data. And to put it plainly, the data practices that have gotten us to where we are today are not sustainable.
Major looming privacy shifts are threatening to (again) upend monetization models for publishers and developers, along with their related value to advertisers. We’ve seen the impact of Apple’s App Tracking Transparency (ATT) feature and the deprecation of IDFA. Google’s final deprecation of third-party cookies on Chrome next year will send yet another shockwave through the broader digital industry, along with a host of other global privacy initiatives.
The implications of these ongoing changes as it relates to consumer privacy and the data signals available for targeting look a lot different depending on where you sit within the digital ecosystem, but every layer and player within the supply chain will feel the effects in some way—and be forced to adapt accordingly. For some, that means a wholesale pivot in business model.
Consider, for example, the lens of performance-driven developers. We’ve seen players like Voodoo—a leading casual game developer that has, to date, primarily monetized via in-app advertising—pivot to increase focus on its in-app purchase monetization. In fact, Voodoo’s in-app purchase business increased from 6 percent of its revenue in January 2022 to 24 percent in March 2023.
However, these pivots are not possible for many publishers, and deprioritizing advertising is not a solution for building a healthy and sustainable digital and mobile ecosystem for the future. Rather, our industry needs to stop putting itself in a position to react to privacy and identity shifts and instead focus on identifying and building opportunities for data signal stability and sustainability.
From Precision Targeting to Prediction Targeting
To realign our industry around sustainable data signals, we need to transition our mindset from one of precision targeting to predictive targeting. Privacy shifts have reminded our industry that identifiers like device ID simply can’t be relied upon as a sustainable basis for targeting and inventory monetization, no matter how intoxicating this level of deterministic targeting can feel. There are other opportunities to enable sophisticated targeting leveraging more-sustainable (and privacy-conscious) data signals, and that’s where our industry must turn its focus.
Attention, demographic, behavioral and contextual data signals all offer richer and more relevant targeting opportunities for advertisers. While the precision of a device ID might be lost, the additional signals inherent in these types of data provide more reference points for advertisers, enabling greater relevance within the advertising experiences. Moreover, these types of data signals can be leveraged to predict behaviors and attributes within larger audience segments, bringing scale to campaigns that extends well beyond the scope of seed data.
In the mobile space in particular, there are a lot of data signals that simply haven’t been put to use historically due to the legacy focus on device IDs. By tapping into and extrapolating insights from in-app signals—not only from first-party user data—related to usage, behaviors, geolocation, verticals, ad interactions, ad formats and more, publishers can begin to drive a different type of value for their advertisers with enhanced insights into when, where and how best to connect with their audiences. Most importantly, these sorts of privacy-safe data signals are highly sustainable, offering greater scale and relevancy for better advertising outcomes.
For publishers, the key will be to identify the data signals most important to understanding their audiences and to establish the means for tapping into the insights they reveal. That means working with partners that can help them leverage these signals to increase the value of their inventories. Meanwhile, the major holding companies that are in the process of creating their own addressable audience solutions would do well to work with companies that have access to direct data and signals at scale and across devices, as well as the means to deliver on them in a privacy-compliant way in order to fuel enhanced targeting for marketers.
The future of targeting will look a lot different than it does today, but not in the way that a lot of industry players fear. Done right, the future of targeting will be more relevant—and sustainable—than ever.