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As seismic shifts reshape the advertising industry, marketers are reinvesting in strategies that have stood the test of time.
What shifts, exactly, are pushing advertisers back towards these old-school approaches? To start, there’s the matter of signal loss, driven by factors such as Apple’s App Tracking Transparency, data privacy regulations, the consumer demand for data privacy, and Google’s plans to deprecate third-party cookies in Chrome in 2025. And, of course, there’s the rapid development of generative AI, which is both presenting new challenges and introducing fresh possibilities for marketers.
To meet these challenges, advertisers are testing new technological solutions to help them adapt. But they’re also reaching back into their toolkits to rediscover legacy tactics and strategies like direct buying, contextual targeting, and brand lift studies. And, as it turns out, these legacy strategies haven’t just been sitting in the corner gathering dust: They’ve grown more sophisticated to meet the needs of today’s agencies and brands.
The advent of programmatic advertising brought advertisers a level of speed and scale that they couldn’t access via direct buying. In doing so, programmatic swiftly became the default digital buying method, accounting for a projected 91.3% of US digital display advertising in 2024 totaling $157.4 billion.
While programmatic isn’t going anywhere—online programmatic ad spend growth will slow this year, but is still expected to increase YoY—some advertisers are investing more of their budgets into direct buying methods as a way to prioritize consumer privacy and brand safety, and to protect themselves against fraud.
The factors driving signal loss and pushing the industry towards a privacy-first advertising model are rendering some of the main data sources that drive real-time bidding in the open exchange either unavailable or inadvisable due to privacy concerns—specifically, third-party cookies and mobile advertising IDs (MAIDs). As a result, in 2023, 53% of buy-side ad investment decision-makers said they plan to increase their focus on placing ads with publishers using first-party data.
Direct buying also boasts lower risks of fraud and fewer threats to brand safety than the open web—challenges that are growing more pressing as generative AI transforms the internet. In 2023, approximately 22% of all online ad spend was lost to ad fraud, and mitigating fraud ranked as one of the biggest concerns around media investment this year by US brands and agencies. AI-driven ad fraud is particularly problematic when it comes to ads served via the open exchange, due to the complexity between the purchase of a traditional programmatic ad and its delivery. At the same time, generative AI makes it easy to create low-quality websites, like made-for-advertising websites (MFAs)—where brands have squandered as much as 15% of their digital ad spend.
To protect their programmatic spend, advertisers can implement safeguards like allow lists and block lists (such as dynamic MFA block lists) and leverage third-party safety segments to exclude sensitive content and increase inventory quality. But adding direct buying gives marketers the ultimate control over their ad dollars—both in terms of audience and for minimizing risk.
“By contracting with publishers on their own inventory, media buyers know exactly what inventory they are running on and have the added benefit of leveraging the publisher’s first-party data—which is not only privacy-friendly, but empowers more accurate targeting and measurement,” says Lindsey Freed, SVP of Media Investment at Basis Technologies.
While direct cannot offer the same speed and scale of the open exchange, it has evolved considerably so that advertisers can benefit from the privacy-friendly and premium placements it offers in a more automated way. In addition to insertion orders (IOs), advertisers can turn to private marketplace deals (PMP)—ensuring exclusive, premium placements—or programmatic guaranteed, which combines the quality and assurance of direct with the efficiency and automation of programmatic, making it easier for media buyers to make data-driven decisions in real time. Advertisers can also leverage curated publisher lists for direct deals to mitigate some of the tactic’s scale-related drawbacks.
Programmatic advertising on the open exchange will, of course, remain a mainstay for marketers, especially as technologies advance to help them avoid AI-driven fraud and advertising on low-quality websites. However, making the most of all that direct buying offers will help marketing teams adapt to the cookieless world, and mitigate some of the brand safety and fraud risks that come with real-time bidding on the open exchange.
Signal loss is also driving a huge resurgence in contextual targeting. Contextual advertising spend is expected to double from 2023 to 2030, and as of late 2023, almost 94% of marketers were either already using the tactic or had plans to begin using it within the next 12 months.
And, like direct buying, contextual has advanced considerably in recent years.
“Advertisers can now tap into AI-powered contextual targeting, which analyzes and categorizes page content, allowing buyers to align creative messaging to the content their audience is consuming,” says Freed.
Contextual technology has also progressed to incorporate natural language processing, which ensures that ads are not only placed in environments relevant to their topics or keywords, but also where the overall sentiment and tone of the content match the ad being served.
Contextual targeting offers a variety of benefits beyond its cookieless nature—in fact, that only ranks fourth on the list of what US agency and brand marketers find most beneficial about the tactic, behind “aligns with audience interests”, “improved ROI/ROAS”, and “increased ad engagement.” When used for display ads, contextual also serves to protect brand safety by ensuring that ads are placed in premium digital environments. Plus, notes Freed, “with the integration of curated contextual segments within advertising platforms, media buyers can search and select contextual segments across various advertising mediums more seamlessly.”
Of course, contextual can’t be the only privacy-friendly targeting tactic advertisers use to address signal loss in a cookieless world. And contextual does have its drawbacks, such as the fact that it can be difficult to retarget people who have seen contextual ads, which in turn makes it difficult to measure their performance. As a result, contextual is best used as one part of a multi-tactic cookieless targeting approach.
In a world driven by third-party cookies, advertisers were granted a lot of transparency into the performance of their campaigns. They could easily get an idea of their consumers' purchasing journeys and generate precise reports on view-through conversions and ad frequency.
Once third-party cookies are fully deprecated in Google’s Chrome browser, one of the preeminent challenges for advertisers will be to find new ways to measure campaign performance and attribution. In this context, advertisers are leaning into legacy measurement tactics, like brand lift studies, to gauge the success of awareness-driven campaigns.
“Brand lift measurement and brand health tracking is becoming more important, and we’ve seen an uptick in investment in these studies to understand the holistic impact of advertising efforts on a brand,” says Kelly Boyle, Group VP of Client Strategy and Insights at Basis Technologies. “Marketing mix modeling is also making a comeback, and these tools are evolving. Newer offerings are more robust, more precise, and some are even more affordable than traditional models were years ago.”
Zach Moore, SVP of Digital Media Operations at Basis Technologies, agrees that brand lift studies have grown easier and more streamlined, and that they’ll have an important place in the campaign measurement process in a cookieless world. “Brand studies have gotten a little smarter over the last decade or so,” says Moore, “with many being built into the various buying platforms directly, integrating actual sales or transaction data into their metrics, and having the ability to encompass multiple channels to provide a much wider view.”
Brand lift studies aren’t without their challenges, the biggest one being the size of the control and exposed groups used in these studies (which can be relevant if an advertiser needs the results to reach statistical significance).
“The issue with brand studies is you must have strict control and exposed groups, typically running lots of impressions,” says Moore. “The guideline is that 10-20% of impressions for all a brand’s media should be set aside for brand lift studies. However, since many brands request those impressions as ‘added value’ from partners, that can be a hard sell, since they’re essentially asking for free impressions.”
In situations where brand lift studies aren’t viable, Moore recommends prioritizing a model-based approach, such as a diminishing returns analysis.
As with contextual targeting, brand lift studies aren’t a comprehensive solution. Advertisers will need to tap into a variety of alternative measurement and attribution tools in a cookieless world, from brand lift studies to model-based approaches, to cookieless conversion attribution, and more. In light of this, advertising leaders should prepare for the measurement process to be much more time- and resource-intensive once third-party cookies are fully deprecated in Chrome.
All in all, embracing approaches that have served advertisers since the industry’s beginnings will be a critical way for advertising teams to find success—and security—amidst major paradigm shifts. Advertising leaders should also keep an eye out for technological innovations and advances related to these strategies, as it’s likely that these older tactics will continue to grow “newer” (i.e., more automated and sophisticated) as the industry—and technology—evolves.
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Want to learn more about how your peers are preparing (or not preparing) for one of the industry’s biggest paradigm shifts? Check out our report, Identity vs. Privacy: Digital Advertising in a Cookieless World, to get all the top findings from our survey on how advertising teams are preparing for the cookieless future.