Challenging the Data Discussion: Why User-Based Targeting Isn’t the Answer

With 2020 in full swing, there has been a lot of talk about the shift away from user-based targeting. With CCPA and GDPR in full effect, it's no wonder marketers are re-evaluating the use of cookies and personal data to reach new customers.

Third-party cookies are crumbling fast: browser-level changes and privacy regulations have spotlighted the fact that marketers need to find new ways to reach audiences. However, what we need to realize is user-based targeting has never been the most effective way.

It seems that most retail marketers are looking for workarounds to continue the same user-based targeting that was once powered by third-party cookies. But the question remains: Should marketers be turning their attention to a different solution? I say yes.

Hi There, Cookies

The old age of advertising relied predominantly on context to serve ads to relevant consumers. However, as digital advertising exploded in growth (especially programmatic buying, which involves real-time identification and targeting), so have the number of third-party data providers and cookie-based segments.

In tandem, brands moved from focusing on context and interest to the personal attributes of the user. Why? The reasoning was fairly simple: it’s more effective to target people who fit the profile of consumers who typically buy your products.

However, the rate of growth in digital advertising has far outpaced the evolution of targeting practices. Cookies were never designed for advanced targeting. Their usability deteriorated further as consumers moved away from using one desktop computer to browsing content across smartphones and multiple devices.

Most importantly, these personal identifiers have led to serious issues with consumer privacy and trust. The simple fact is, the way marketers reach consumers online has needed to change for a long time.

Defining Your Audience

I order to move on from cookies, let’s look at specific user-based targeting in general. Brands typically strive to build a comprehensive understanding of their customer base, distill the qualities of their most loyal customers, and use third-party data to find and target similar people.

But what if the defining quality of your best customers isn’t about who they are? What if it’s not the fact that they’re middle-aged with a high household income, but is instead reached at a moment when they’re ready to discover a new brand?

Pinterest spoke about its approach to this method at the IAB’s Brand Direct Summit, discussing context and interest as the most important factors for reaching a user in an exploratory state. Context is the most important part of the ad experience: a “pin” only becomes interesting when it's surrounded by a myriad of other images that create inspiring moments.

This approach also addresses a big gap with cookie-based data: recency and relevance. Most cookies have a relatively short lifespan, meaning that browsing history and intel about the user is outdated by the time marketers can capitalize on it. Advanced contextual solutions are going to give marketers greater ability to capitalize on cultural trends and popular topics in real time, ensuring their message is fresh and relevant.

The Customer Still Comes First

None of the above can downplay the importance of customer data. In light of the most recent browser-level changes and new policies like CCPA, first-party data is only going to become more important to understand who a brand’s ideal consumers are.

The most successful brands will be those that can collect opt-in, first-party data by offering something truly valuable to their audience in return. Building these loyal audiences through personalized content and experiences is something digital-first brands like Casper, Warby Parker, and Glossier are doing exceptionally well.

However, how we use that customer data needs to change. Instead of focusing on the attributes of each user, marketers need to focus on the state of mind of consumers as they browse content — reaching them in the right context at the right time. Most importantly, shifting to this mind-set keeps consumer privacy first and moves away from using unnecessary personal details to target internet users with irrelevant ads.

As an industry, how we use and amplify that data is what will be key to success in the next wave of digital advertising. There needs to be a fundamental shift in how brands think about the use of advanced contextual data to grow their audience with the right personalized messaging.

Katie Secret is director of product marketing at Outbrain, focusing on offerings and strategy for marketers and programmatic buyers.