Stats reveal adtech has some adapting to do

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Date: 22 June 2021

A businessman using on smartphone as an Adtech concept

It's been a challenging couple of months for the advertising industry as changes outside their control threaten to have a huge impact on the bottom line for many businesses.

The news that online and pre-watershed HFSS advertising (that is foods that are high in fat, sugar and salt) is to be banned from next April came hot on the heels of the now infamous statistics that showed 96% of iPhone 14.5 users in the US - and 85% globally - have opted out of app tracking technology (ATT).

All of this means brands are increasingly looking for more reliable ways to reach people with meaningful messages in the right context, tone of voice and time of day. But with their tried and tested methods moving more and more beyond their reach, new solutions are needed.

With Apple's IDFA changes, and Google's abolition of cookies, we are seeing a move away from programmatic personalised advertising - a strategy that the $190bn mobile advertising industry has long grappled with. But now there is a wholesale shift towards a new, consumer-first, way of working and, while this will take some getting used to, it doesn't need to be a disaster. For those ad tech practitioners who are concerned that there is no viable alternative to delivering effective advertising without collecting personal data, I come bearing good news: there absolutely is!

At Covatic our entire business is built around the notion that you can operate effective, tailored, contextual advertising using in-app technology, ensuring no private data ever leaves the phone. And we have recently taken this increasingly popular idea one step further with the creation of A-Type, which uses our existing on-device processing to allocate groups of users to relevant third-party socio-demographic data, such as CACI ACORN without exposing any form of ID.

As well as creating highly relevant and sellable audience groups, it is also future-proofed and sustainable. It is designed to be GDPR, CCPA and ATT safe and does not require users to login, which means clients can make their entire user base addressable.

We are confident that this technique - which has already been adopted by a number of new and existing clients - will prove the answer to marketers' prayers.

When Apple announced its plans to introduce an opt-out for ATT, a degree of drop off was expected, but not in such emphatic numbers as the 5.3 million that has been cited. The majority of consumers may not understand the intricate ins and outs of how adtech works, but if you ask them directly if they are happy to be tracked, they will say no.

And yet they still want a personalised service, with ads that mean something to them and that are delivered at a convenient and unobtrusive time, yet crucially with their privacy the top priority.

By using technology that sits on-device, personalised ads can be served to the user without any personally identifiable data being exposed. No cookies, no tracking, no logging in and no reliance on IDFA. Instead, meaningful, insightful ads can be delivered as a simple bolt on.

The device understands the user's lifestyle based on the way they use their phone, and learns the right content for that person, and the most impactful time of day to deliver it.

Most elements of personalisation, be it advertising or content recommendations, do not need to involve tracking but can still work with existing programmatic workflows. Covatic are able to provide the context and advertising tags directly into the ad request, at the player, and so there is no need for any ID across the programmatic advertising ecosystem.

Adtech has a way to go to regain the trust of the public - as the 96% of people surveyed will verify - but this new way of working will play into the hands of brands that get it right. With the user-brand relationship under the spotlight, those businesses that are quick to find an alternative way of working can break through with personalised advertising while their slower rivals flounder.

These changes are not something to be feared but to be understood. Once brands take a moment to read the mood of the nation and understand the new rules of engagement they can move ahead with an appropriate approach to targeted, personalised advertising that is no less effective for being respectful of people's privacy.

Copyright 2021. Article made possible by Nick Pinks, CEO of Covatic

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