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  • Perspective What's this? Contextual Advertising Can Work In A Programmatic World

    Sometimes the cookie just crumbles. When it comes to digital advertising, who ever said that the browser cookie has to be king? Apps do not care about cookies. And if you haven’t been paying attention recently, apps make up the vast majority of time spent with digital media in 2015.

    The mobile revolution has changed how we need to think about advertising. Smartphones provide the ability to target groups of people with extraordinary degrees of accuracy and automatically deliver the most relevant content to people. Programmatic and contextual ads are the evolution of advertising.

    Increasing Accuracy In The Mobile Era
    Facebook’s vice president of advertising technology, Brian Boland has said numerous times that cookies are not as accurate as people make them out to be. Cookies are only 70% accurate when it comes to gender of the user and 55% accurate when combining gender and age.

    Smartphones plus apps can give advertisers extraordinary insights. The smartphone knows almost everything about its user: location, apps used, media viewed, ads clicked, demographic information and so on. The smartphone has become an extension of self for users everywhere.

    The boon of data from smartphones can help advertisers with contextual advertising, the ability to target pertinent ads to people that will be interested in them.

    “Today, we need to think about audience in terms of context: known or intuited characteristics about the consumer such as location, gender, interests and other demographic or psychographic profiles,” said Crave Labs cofounder and CEO Jeff Peden in an interview last year.

    In the past year both Google and Apple have helped create functions in Android and iOS to help accumulate this data while also protecting user anonymity. Google’s Advertising ID (AAID) for Android tracks user data while protecting individual privacy by giving the individual a unique identifier that can be turned on and off. Apple’s Identifier for Advertising (IDFA) works in much the same way.

    Between AAID and IDFA, the accuracy of predicting age and gender could be north of 80%.

    Programmatically Delivering The Right Ads To The Right People
    So how do we deliver these contextual ads to users at scale while preserving accuracy? It comes down to better segmenting at the programmatic level.

    Advertisers are buying more and more based on audience segmentation and these segments are becoming more and more granular. This is also where programmatic advertising can really shine actually. Brands and advertisers can switch or expand audience segments very quickly depending on how a campaign is doing. It all becomes immediate, real-time feedback that is extremely valuable to both cost-savings and, most importantly, effectiveness.

    Programmatic advertising across specific segmentations can be especially important for video. The multi-screen world can allow programmatic video to help target users on the desktop and mobile. As programmatic advertising breaks into the TV realm, the ability to reach audience segments across all types of digital media will give advertisers great opportunity.

    The trick, of course, is how to manage the multi-screen environment with accuracy. For instance, how is it possible to jump from audience segments on iOS to the TV? The new Apple TV and tvOS will provide an Advertising ID that can work across iOS devices. While tvOS may be a distinct operating system for the Apple TV, it is still built with iOS APIs and frameworks as its base.

    For Google, the Chromecast has shipped more than 20 million units making it one of the more popular connected television experiences in the world. Since Chromecast uses Android apps from the smartphone to stream content, the AAID is still intact. The Appification of TV can work for advertisers as well as being a boon to users.

    Programmatic mobile display advertising will surpass desktop advertising this year at $9.33 billion, or 60.5% of programmatic spend, according to eMarketer. And video is not far behind, projected to be a $2.2 billion market in 2015. The opportunity to mix accurate and contextual ads within the programmatic ecosystem has never been greater.

    So much for those cookies.

    (Editor’s note: Frank will speak on the session “Mobile Video - The Next Programmatic Frontier” at the SHIFT // 2015 Programmatic Video & TV Ad Summit on Tuesday, December 1st in NYC. Save now and win a 50-inch Sharp Roku TV with early bird registration!)

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