Household Targeting Emerges as Alternative to Individualized Behavioral Ads

Privacy changes such as Apple’s downgrade of its mobile ID, the IDFA, and Google’s imminent elimination of third-party cookies are forcing advertisers to consider alternatives to personalized, one-to-one behavioral ads. That’s because individual user data is getting harder to collect, forcing advertisers to target customers based on media context, household data, and interests tied to like-minded or demographically similar groups instead of individuals.

Jon Schulz, Chief Marketing Officer at Viant Technology, checked in with Street Fight to lay out the benefits and drawbacks of targeting methods offering advertisers alternatives to one-to-one behavioral ads.

What methods will replace behavioral ads as privacy changes make them harder to execute?

The fact that cookies and device IDs as proxies will be going away is not the end of behavioral advertising, just hyper-individualized targeting. We are really talking about the future methodologies of digital advertising, and any successful framework will be built from two key aspects: a people-based approach and a consumer household mindset. 

People-based advertising uses real people, rather than third-party cookies, to target and measure digital advertising. This is largely what takes place within the walled gardens, but it’s also possible to extend these capabilities to the open internet. Viant Technology shifted to a people-based approach in 2015 because we saw that third-party cookies were not very effective digital identifiers and would not be a reliable proxy in the future. 

For consumers, the people-based approach, which uses a deterministic data matching process, provides a better consumer experience with privacy compliance in full view. For brands, people-based advertising supports a more holistic marketing strategy, empowering marketers to target and measure in all environments. This means marketers do not have to rely on third-party cookies, yet they can still measure the effectiveness of their advertising while controlling reach and frequency across channels. 

The consumer household has always been regarded as the primary decision-making unit – from vehicles to vacations and home furnishings to consumer goods. That’s why this unit has always been important for marketer engagement. 

With the rise of emerging channels, such as Connected Television (CTV), it has become increasingly critical for marketers to be able to target and measure at the household level. The premise behind householding is in grouping the members of a household as a decisioning and buying cohort to provide meaningful marketing messages. This approach also has a privacy-first mindset, which moves away from one-to-one personalization to one-to-some personalization.

What technologies allow for household targeting? 

The programmatic ecosystem is made up of several advertising channels, many of which use different identifiers. To measure the impact of your advertisement, you need to link the advertising identifier on both sides — the exposure and the conversion. Any identifier that claims to be comprehensive must be able to match that identifier on both the exposure and conversion side to enable addressable targeting and measurement at scale.  

In its simplest form, household targeting and measurement operates through the ability to link a physical address to digital and other identifiers. This can be done using technologies such as data lake platforms, people-based solutions, and democratized cloud-based computing. 

An effective household approach should be anchored by physical address and verified by GPS coordinates. Once GPS coordinates for a physical address location are confirmed, cloud-based computing and machine learning can then build a holistic graph of all identifiers that are persistent within that household over time. This graph is then leveraged to serve relevant ads based on a household’s behavior—not an individual’s.

Will alternative methods lead to a dip in efficacy compared to individual behavioral ads?

Today, only about half of the ad impressions flowing through the electronic network of advertising requests, also known as ‘the bidstream,’ have third-party cookies attached to them — basically just users of the Chrome browser. The efficacy of third-party cookies is suboptimal for several reasons: 

  • They’re not transparent, which compromises consumer privacy
  • They create problems at every stage for marketers, from planning to targeting and activation to measurement 
  • They aren’t people-based; they only offer a snapshot of the browsing history on a device and a fragmented point of view, which leads to flawed and incomplete measurement 

Our internal data shows that 72% of all conversions happen on a separate device from where the ad occurred. By implementing household targeting and measurement, the advertiser has a better sense of true performance compared to traditional same-device conversions that are ubiquitous across demand-side platforms today.  

The benefits of a people-based approach include accurate reach and frequency management to provide a better customer experience and their assured privacy compliance for identity data. For marketers, accurately managing these factors also improves efficiency and effectiveness of advertising campaigns by improving targeting and measurability. The measurability piece is particularly important because marketers need to demonstrate true business outcomes such as brand lift or actual sales. 

How can brand marketers deploy household-based marketing strategies (e.g., what channels should they prioritize)?

CTV has become a favorite emerging channel for advertisers, which we can confirm, as it now represents Viant’s fastest-growing channel with customers. According to eMarketer, CTV ad spend is forecasted to be a $27B market in 2025.

It’s important to note that CTV is already a cookieless environment. It requires both accurate household-level targeting and measurement to ensure optimal return on ad spend, which is the bottom line for all marketers in the end. 

While the ad is served on a CTV, the actual conversion comes from somewhere else. That same  person watching the CTV ad will transact on their mobile phone, laptop, or tablet. This is why measurement across devices is critical for marketers to understand the impact of their efforts.

CTV has seen and will continue to see exponential growth in ad spend, making it a key component of media plans and making household-level targeting even more important moving forward.

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Joe Zappa is the Managing Editor of Street Fight. He has spearheaded the newsroom's editorial operations since 2018 and compiled the daily newsletter since 2016. Joe is a journalist who has written widely about technology, business, and politics. You can contact him at jzappa@streetfightmag.com.
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