Taboola founder and CEO Adam Singold
Andreas Renz | Getty Images
In “Back to the Future” there is a famous scene where a time traveler Delorean races down the railroad tracks to reach critical speeds and teleport to the future. The only snag is that the railroad is incomplete, and if the car doesn’t accelerate fast enough to jump into the future, it will fall off a cliff.
This is a wonderful analogy to the difficult situation at the heart of digital advertising today.
With recent changes made by big technology and government agencies to go beyond a long-established part of the advertising world – in particular, user tracking cookies and IDs in the app – advertisers are racing to the edge of the cliff, whether they like it or not .
We’ve seen a vivid example of what happens when third-party data that provides an advertising business function suddenly disappears. It is expected that a simple change in privacy that Apple has made in its smartphones to reduce user tracking will reduce Facebook sales in 2022 by about $ 10 billion. Users will now be asked to choose whether they want to be tracked. This data, which was previously collected by default, has contributed greatly to the success of Facebook advertisers. When Meta (the parent company of Facebook) announced an impact on its earnings for the 4th quarter of 2021, it contributed to the biggest one-day drop in the company’s shares.
Google has just announced its own version of these privacy changes in its Android operating system, which is used by about 85% of smartphone owners worldwide. Google’s ad seems less aggressive than Apple’s – for example, it won’t prompt users to ask for permission to track them, but rather integrates default privacy measures. Google also said it was important for them to continue to support advertisers and the advertising community.
But Google has also warned the advertising industry that its Chrome browser – the world’s most popular with a market share of more than 60%, according to StatCounter – will at some point stop supporting third-party cookies to track users, small pieces of code that can help advertisers track users on different websites. This move is very important, when Google announced last June, postponing the transition from 2022 to 2023, shares of advertising technology rose 16%.
Listening to the market, it becomes clear that businesses or advertisers who rely on the collection of user credentials are coming off the cliff.
There is a way forward, but it requires a new or perhaps old approach in which the context is king, queen and the whole royal family.
Contextual advertising is not who I am; that’s what i do.
Digital advertising is a grand level that continues to show signs of growth, especially against the backdrop of a pandemic that has accelerated our comfortable online lives. EMarketer estimates the increase in digital advertising spending by 29% in 2021, with global spending reaching $ 491.7 billion and more than half a trillion in 2022.
In the future, when tracking users is much more difficult, the most logical and viable option for an advertiser’s success is contextual targeting, which reaches people based on the context of the page around them rather than their personal data.
Context is a huge proxy for what people in the market are, which is what advertisers are looking for – if I’m watching CNBC, I’m probably in the market to buy or sell stocks. When I visit a children’s park, I’m most likely in the baby goods market. When I read Better Home & Gardens, I may be interested in home improvement products. The list goes on and on. Contextual cues have helped build the advertising business of Google and Amazon – users are literally gaining what their interests are now, or what they want to buy.
These contextual signals are strong in open web and journalism, where signals come from the topics of articles, videos and more. I may never tell Facebook what I’m really interested in, but I’ll read about it all the time. Estimates of contextual advertising are estimated to exceed $ 376 billion by 2027.
So what should advertisers do?
- Diversify outside fenced gardens. An open network, a market of more than $ 60 billion is all contextual. What people read and what people do is what you can focus on, not who they are.
- Talk to your agencies and media buyers and work with them on contextual advertising wherever it is – Amazon, Google and others.
- Create data directly to the consumer. Meet your customers because they want you to know them, because you provide them with enough value that for them it’s worth it.
Ten years from now, my son Ozzy will be shocked that there was a time when companies tracked our faces, just as shocking to us is the thought that my parents 20 years ago flew with people who smoked cigarettes. I am excited about the future. It’s contextual, private, and it’s starting now.
– Adam Singold is the CEO of Taboola, an online contextual advertising company.