‘Personalization diminished’: In the GDPR era, contextual targeting is making a comeback

The ad-buying pendulum is swinging slowly but surely back to contextual targeting, thanks to the arrival of the General Data Protection Regulation.

With so much market uncertainty surrounding the impact of GDPR, many ad buyers are reluctant to take risks with data-heavy audience targeting techniques. But contextual targeting, where ads are targeted to individuals based on the context of what they’re looking at on page, is suddenly looking a lot more appealing — and safer.

Some agencies have started shifting more of their budgets toward contextual targeting versus personalized, audience-based ad targeting. Some of the big media agencies have gone a step further and told publisher partners they want to cancel all audience-based targeting and focus entirely on contextual targeting for certain campaigns from now on, according to publisher sources.

The renewed focus on contextual targeting is a glimmer of good news for battle-weary top-flight publishers, which have long complained that the value of contextual targeting has been neglected in the rush to micro-target audiences with context a far distant second (or third or fourth) on the priority list. Publishers have strongly touted the value of contextual targeting in quality environments ever since the YouTube brand safety scandal in 2017. But the buy side’s reaction to GDPR’s arrival has unexpectedly helped further this cause.

“The growth in contextual spending will continue as people focus more on being relevant, than being personal. If done correctly, this is a much better way of creating engaging, better performing campaigns. Over-personalization actually limits campaign effectiveness, so a more balanced approach is a very good thing,” said Sam Fenton-Elstone, CEO of media agency Anything is Possible.

A major media owner, which has been instructed by several advertiser clients and their agencies to halt all audience-based targeting in favor of contextual, has reported steady performance on campaigns after making the switch.

”Some agencies were not ready for GDPR and on day one, and told us they needed to do anything they could to remove data from our buys as they were not sure they were compliant yet,” said the publishing executive. “Contextual takes away the issue of having to find the right data for individual users so we can scale more with contextual. Performance is also not affected, actually click-through rates on a campaign we ran that dropped personal data use for contextual-only, increased a lot [as a result].”.

The trend is also good news for contextual targeting specialists like Grapeshot, recently snapped up by Oracle. While some independent exchanges and other ad tech vendors have struggled to maintain demand within their platforms since GDPR, contextual ad vendors have had a bit of a windfall. Native ad firm Adyoulike has seen an average 20 percent increase in demand for semantic and contextual targeting on its platform since May 25, according to the company.

“In the short term we are running non-personalized [ads], said an executive at a major publisher. “Personalized audience targeting is out the window — it’s not being run [by us] in Europe at all. Contextual is the way forward.”

While contextual targeting has always had a seat at the media planning table, its importance has been overshadowed by buyers chasing audience-based ad targeting at scale, which platforms like Facebook have made easy. But the vagueness around how strictly GDPR law will be enforced, and the lurking threat of being fined anything up to €20 million ($24 million) for GDPR breaches, means some businesses aren’t willing to take the risk.

“GDPR has caused brands to reset, to reassess the value their audience targeting is providing against the risk that it might not comply,” said Fenton-Elstone.

While some agencies have halted all audience-based targeting on certain campaigns, others have increased the amount of contextual targeting they do alongside personalized advertising, to offset drops in the volume of third-party data available as businesses have struggled to gain user consent or justify using personal data for retargeting. To skirt that issue, some agencies set up contingency plans ahead of GDPR going into force on May 25 that prioritized contextual ad campaign targeting.

“Our clients still want customized digital campaigns that are relevant to consumers in a post-GDPR digital media ecosystem, said Matthew Landeman, client managing director of media agency Carat. “Contextual signals allows us to connect our client’s advertising with consumers in a way that respects their data privacy and is authentic.

“Sophisticated semantic analysis tools, exclusive access to premium environments and high quality content creation and distribution opportunities with publishers and influencers arm us with the toolkit to serve digital advertising that doesn’t require personal data yet is relevant and will resonate with its audience,” he added.

Most agencies agree the refocus on contextual is beneficial for all. “As an industry we went down the path of targeting a specific audience too far, to the detriment of the environment in which the ad is delivered,” said Robin O’Neill, managing director of  digital trading at Group M. “I would argue we [as an industry] have moved too far away from contextual— so I welcome people talking about this resurgence.”

However, he added that the media agency group doesn’t need to increase its current use of contextual targeting.

“We want to work with all the publishers that are important to us, and have gained the consent necessary for us to continue working with behavioral and audience data [in a GDPR-compliant way],” he added.

Media agency Total Media prepared back-up contextual segments to go live before the law’s arrival. A large portion of the agency’s buys pre GDPR relied on personalization of ads and retargeting — two areas it expected the law’s arrival to hamper, according to Duane Thompson, head of display and programmatic at Total Media. That’s meant the agency has refocused on using topic categories, keywords and site-domain data to serve contextually relevant ads to visitors.

“For the foreseeable there will be a change in the way that agencies will have to speak to their audiences,” said Thompson. “Personalization will be diminished but contextual relevancy is how we will combat this in the short term. As an industry we have always supported the notion that ‘content is key’, so GDPR will test this theory with the uptake on increased contextual targeting.”

“Contextual signals can be really powerful,” added Fenton-Elstone. “While audience data can tell you who someone is, contextual signals can give you an insight into their frame of mind and receptiveness to a particular message, at a particular moment. For publishers, this should lead to a re-evaluation of quality, focused content that drive high levels of attention. Brands should be looking to tap into these moments with relevant creative messaging that complement the environments they place them in.”

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