High costs, poor targeting now define the digital ad experience

Digital ad costs

Costs up, quality down

Well, it was fun while it lasted. 

In the early days, when Big Tech companies were trying to figure out how the hell they were going to make money on mobile, they bent over backwards to please advertisers. 

Unprecedented targeting, superior value versus other channels and real, measurable results. They revolutionized digital advertising. Truly, it was like shooting fish in a barrel. 

Now? It’s getting to be a lot more like playing carnival games blindfolded. Really expensive, harder to win and the prizes stink. 

These companies are under extreme pressure to continue growing at all costs. And they’re all starting to veer into each others’ lanes, prompting them to build their walled gardens higher and higher. 

They rig the game so they win no matter what

Axios is out with an eye-opening report about what’s going on here. This line says it all: 

“As ad costs have shot up, the power of consumer targeting on social media has suffered — thanks to Apple’s recent iOS updates prioritizing data privacy.”

The article goes on to quote an ad exec lamenting how Facebook and Instagram CPMs have gone through the roof while targeting is weaker than ever. 

We’ve seen this before, folks. The telecom companies overstepped in the 80s. Microsoft did it in the 90s. At some point, the behemoths prioritize profits and everyone else down the line suffers. Eventually, they’re disintermediated. But for this to happen, there has to be a market change. 

Back to basics

Our industry is at an inflection point. We can keep playing the old game as the giants make it harder and more expensive. Inertia is the enemy here, as we stick with the devil we know until we really get burnt. 

Or we can start a new game that looks a lot more like the one we fell in love with in the first place. Except this time, quality, permission-based data will be at the heart of a winning strategy. The trick this time around will be scaling across platforms – something that’s definitely not possible in today’s world of walled gardens. 

Personally identifiable information (PII) will once again unlock reasonable ROIs as it paves the way to efficient targeting, deduplication and matchbacks, even in physical locations. Think about it as the logical next step to what the industry loved just a few years ago, had Big Tech not taken a hard right turn away from what was best for users. 

PII is a hedge against rising data costs

Of course, PII isn’t a cure-all. Data costs are likely to continue to rise. That’s just reality. What PII will allow you to do is keep rising costs under control by delivering better results. It’s amazing what’s possible when you know who you’re targeting, which platforms you’re reaching them on, how many times they saw your message and whether or not they converted. 

As you’re exploring options, be wary of the wizards behind the curtain promising magic. The ones who swear they’ll be able to link hashed emails (HEMs) to yet another form of cookie-like persona. Or to a mobile ad ID (MAID) to someone (they can’t be sure who) in a household. They’ll often have these amorphous identity graphs that could result in the same message being sent to the same person over and over. 

Forget it. 

Here’s the deal: our industry is about moving forward, not trying to make peripheral improvements on everything that’s wrong today. 

Of course, for some, PII isn’t viewed as a slam dunk…yet. Confidence around trust and privacy related to PII data will be key. There have been too many data breaches and hacks, especially of much more sensitive data than PII-powered ad campaigns would ever collect. A zero trust security environment will build this confidence and keep data, however innocuous, safe and sound. 

Then there is the inevitable regulation at the state, country and global level. More rules around privacy are coming. The question is when the hammer drops whether you’ll have a strategy that aligns with those changes. We believe that when this time comes, opt-in PII, supported by the latest advancements in security and able to bend to the whim of consumer permissions will represent the most viable path forward.  

We’ve come full circle, now let’s break the chains

Digital platforms became a no-brainer for a reason. They were cost-effective, measurable, hyper-targeted and able to shift on a dime. They came along at a time when money was being wasted on traditional media buys with opaque visibility and terrible ROI. 

If this sounds familiar, it’s because it seems we’re right back where we started. That means new opportunities, for those who seek them. 

What’s your next move?

Get in touch if you’d like to learn more.

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