Ad targeting in transition

The old ways are going out of favor, Permutive’s Joe Root says

This is a Spotlight episode of The Rebooting Show, featuring Joe Root, CEO of Permutive, which was the underwriting sponsor of a recent series of episodes featuring publishing revenue leaders. Learn more about how Permutive’s privacy-forward audience platform helps publishers build audiences and develop insights to win more RFPs, grow re-bookings and build deeper relationships with advertisers based on data.

Thanks to Permutive for sponsoring the series and supporting The Rebooting.

How Gumtree uses first-party data to drive direct deals

Addressability across the web has collapsed to 30% due to users choosing cookie-blocking browsers and opting out of sharing their data with third parties on Chrome, putting open marketplace revenue in freefall. Marketplace publisher Gumtree needed a strategy to address this head-on to help them refocus on their direct-sold business. Download the case study to find out how the team at Gumtree worked with Permutive to use first-party data to create endemic and non-endemic audiences to diversify their revenue and increase performance.

The media and advertising industry are not lacking for events. Earlier this month, a key “tentpole” event for the ad tech industry took place in Cologne, Germany. Dmexco is renowned for its massive booths and heavy emphasis on sales. Like any industry event, it’s a good way to get a quick read on the prevailing winds.

Joe Root, CEO of UK-based privacy-focused audience platform Permutive, returned to Cologne for the first time since pre-pandemic. He found a shift.

“This time around, one-to-one personalization [messaging] is gone,” he told me on a new episode of The Rebooting Show. “Pretty much every stand was about privacy-safe advertising and no need for cookies.”

The digital advertising system is in the midst of a shift, from an over-reliance on collecting vast amounts of data to crunch to do one-to-one targeting – dog owners getting dog food ads, cat owners get cat food ads – to a new landscape that gives people more say on data collection and pushes advertisers and ad tech companies to operate differently.

The big shoe to drop is the much-touted demise of the third-party cookie. Third-party cookies were never meant to play the pivotal role they ended up playing in digital advertising, but they served their purpose for a generation. It’s now time to move on, as Google will eventually get around to deprecating them, although the timeline keeps shifting, with the new expected date in the second half of next year.

“Today, there are probably 10 billion cookies in the world or more,” Joe said. “That's 10 billion different ways in which each ad impression can be layered that’s all of a sudden going away.”

Privacy measures like the GDPR are already degrading the old ways of ad targeting.. Across Permutive’s 150 publishing partners, its data shows that on the open market marketplace, 70% of inventory do not have a cookie, meaning the old way of targeting them based on information collected across their behavior won’t work. What comes next is unlikely to be one thing but several. Joe doesn’t see any silver bullet from the many unique identifier solutions in the market.

Everything in ad tech gets quickly into the weeds with speeds and feeds. But one inconvenient truth revealed by GDPR is, whether there’s real harm created or not, when given a clear choice on ad targeting, most people say no thanks.

“Addressable advertising is only going to decrease in scale over the coming years,” he said.

Other topics we cover:

  • The shift in publisher incentives to build trust vs build traffic
  • Why direct sold advertising is back in vogue
  • Whether GDPR’s implementation gives real consumer choice or just the illusion of it
  • The surprisingly large carbon footprint of digital ads
  • Why the loss of ad targeting signals has become an advertiser problem
  • The demise of the long tail in favor of top-tier publishers
  • Why the so-called ad tech tax will come down

Listen to the full episode on Apple, Spotify or wherever you listen to podcasts.