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Given the choice, consumers would rather advertisements not follow them around the internet and be hyper-targeted to their activity. With the help of GDPR, EU and California Privacy Act, the consumer is moving to a more privacy-oriented mindset and companies should start following suit.
Privacy is trending, and that’s become even more apparent after Apple’s recent iOS update. The worldwide average opt-in rate for app-based tracking for advertisements is around 15%, meaning that 85% of Apple users are not opting-in for trackable ads. They no longer want ads to be forcefed to them… especially ones that are just plain creepy.
It seemed that the advertising industry was on the right track, in siding with the people. Google was set to deprecate the use of third-party cookies in early 2022. Companies, advertisers and marketers were starting to explore what a cookieless advertising diet would look like for them – a world that shifted more towards user-centric advertising methods such as contextual advertising and AI-based platforms.
However, Google recently announced that they’ll be pushing back the killing of third-party cookies to 2023. The announcement caused ad-tech stocks to surge, and may have reinforced the complacency of marketers. No single company should have that much influence, but Facebook and Google make up 53% of the ad market share. Google is now exploring a way to continue interest-based advertising while maintaining privacy. Will it really be privacy if the largest company in control has exclusive access to all the data? All signs point to no. As publishers and advertisers review their strategies for the next year, it will be important to side with the people to keep viewers happy and revenue flowing.
The people, it seems, are tired of being targeted, and have been for a while. In 2019, Pew Research reported that roughly half of Facebook users (51%) were not comfortable with the way Facebook categorized them for advertisers.
How can we solve this as publishers and allow ads on videos? The answer is simple: Embrace contextual advertising. The use of AI in particular will enable a new generation of targeting that produces more relevancy. Not only is it GDPR and privacy compliant, it drives results.
New York Times focused on contextual advertising as their main source of ad revenue on their European pages in 2019 and did not see any ad revenue drop. Jean-Christophe Demarta, SVP for Global Advertising at NYT said, “The desirability of a brand may be stronger than the targeting capabilities. We have not been impacted from a revenue standpoint, and, on the contrary, our digital advertising business continues to grow nicely.”
Contextual advertising has been successful for years (think about search advertising and direct-buy placements). With technological advances, it can become a beacon for companies looking to invest in privacy for their consumers. AI will take contextual advertising to the next level, especially in the video space.
In video advertising, so many products and services can’t be targeted behaviorally anyway. Think about the last time you were watching a YouTube video. You might be watching a comedy stand-up clip, but get an interruptive mid-roll ad about the loan rates you were researching earlier. What a buzzkill! That’s where contextual advertising comes in. Instead of loan rates, you could see an ad from your local comedy club or from iHeart for a related comedy special.
Rudimentary forms of contextual advertising exist, but usually only take into account what is on the page or said in the video word-wise. Neuro-linguistic programming (NLP) only allows for context to be generated from in-content words or speech. Newer iterations like on-stream are allowing for AI-based analysis of what is actually going on in the video visually as well.
For example, you could be watching a car chase scene, and the driver says “woah!” when they narrowly avoid a crash, but otherwise there is no dialogue. With visually AI-based contextual video ads, you might then get an ad for car insurance to “always avoid, but always prepare for accidents.”
Think about a video of a father coming home from overseas and surprising his children. We’re emotional. It’s happy tears. Boom. Kleenex ad.
This type of advertising just couldn’t be done behaviorally; it’s about marketing the moment and seamlessly matching the perfect brand with that moment.
In a world where privacy is a standard, moment-based marketing will be key. You’ll want the right creatives to be shown to the right audience in the moment they’re prepped and primed to engage with it. This is about democratization of the experience. Contextual advertising will maintain ad revenue for publishers and advertisers without force feeding users ads that shrug off consumer privacy.
Zack Rosenberg
CEO, CatapultX
Headquartered in North America, CatapultX is a global audience engagement technology company that is known for its On-Stream™ Video Monetization & Contextual AI Platform. CatapultX’s pioneering platform is ending interruptive advertising by making it possible to serve ads within digital media and gaming content across every channel – publishers can now maximize revenue potential from every video. CatapultX is backed by Quake Capital, Plug and Play Ventures and HYPE Capital.
Zack Rosenberg is the founding CEO of CatapultX, and has played a key role in helping the leading brands, agencies and publishers to unleash the power of revolutionary digital media and advertising technology solutions since 2006.
