by Kristina Knight
There is a wealth of customer data in the digital space, both in mobile and desktop, but with more and more consumers opting out of data collection many brands are wondering what to do next. The answer could be as close as their own information about that consumer - and that is where cohorts come in.
Kristina: What are cohorts in the data space?
Todd Wooten, President & Founder, VRTCAL: Cohorts have been around for a long time because on the demand side the advertisers have placed consumers in cohorts through the availability of identifiers like cookies and device IDs. For example, specific consumers can be identified via device IDs as being in the cohort for those who have an interest in sporting goods with a purchase intent because they have shopped online for running shoes on an unrelated website. Moving forward, cohorts are being discussed as a way to offer "anonymous moments" at the level of the user with first-party, context and device data.
Kristina: Why are these valuable to brands, especially with consumers increasing their use of mobile devices?
Todd: The ability for advertisers to target via device IDs and cookies is going away due to privacy initiatives. Signals from the publishers and app developers for first-party, context and device data can be utilized to create cohorts which can be passed to the advertisers for "anonymous moments" that advertisers can target. For example, an ad request can be passed to advertisers that includes cohorts for an athletic user, the purchase intent for sporting goods, a recently completed run, a happy moment (due to improving run time), a device moving at walking pace and a device that's at a viewing angle. Any advertiser targeting any of those cohorts can bid on that ad opportunity. This is an example of what could be as the taxonomy within spec has not been adopted yet.
Kristina: How is a cohort data strategy different than a more traditional approach?
Todd: The way digital media campaigns have been managed over the last 20 years is hitting a wall with the deprecation of IDs and cookies. Everything is changing. A cohort strategy will be a necessity in the future for digital media. With the need for user privacy on the front burner, advertisers are looking for ways to continue targeting while respecting user privacy. Digital media has enjoyed high levels of third-party data targeting and advertisers have benefited greatly. Now, first-party data and context are coming back in vogue because publishers and app developers have direct relationships with users and can get permissioned access to those data types. With the evolution of adtech, they also have access to device data. All three are available with brand safety and user privacy top of mind. Over the past 20 years, advertisers were in control of digital media because they had the budgets and access to third- party data providers. With that, walled gardens and multiple middlemen, publishers and app developers only received about ½ of the ad spend. With the progression of privacy initiatives, publishers and app developers have more control because they will be providing the targeting data directly to the advertisers and will be able to integrate more directly with advertisers.
Kristina: Especially for brands in the mobile space, what does cohort data offer that can increase engagement?
Todd: For performance and download campaigns, the deprecation of device IDs makes attribution more difficult even with measures like Apple's SKAdnetwork. However, with time and the evolution of cohort standards as well as advertising technology, performance will reach back up to current levels, even without attribution. For branding specifically, the advancement of user, context and device data will open up a new trove of targeting value for a user's moments of engagement. User engagement will be much more defined using cohorts derived from the user, context and device level.
Kristina: As more platforms crackdown on the collection of data or allow consumers to opt out of data collection, how important will this type of strategy be?
Todd: Cohorts are the best option for targeting anonymous users, and they are the only option. First-party, context and device data-based cohorts from the user level are the way it should be. Google's Privacy Sandbox initiatives like FLoC places the power within the browser. As the content creators with the direct relationship with users, publishers and app developers should seize the opportunity to take control and segment their users into cohorts to provide digital advertisers with relevant anonymous audiences. In turn, this will greatly benefit our sector for the long-term.