According to a survey of the market research firm eMarketer, global spending for online advertising will reach nearly 427 billion US dollars in 2020. But how can advertisers use their media budget effectively and to the greatest success for their campaigns?
We can distinguish two groups in the digital advertising industry: on the one side are the so-called "walled gardens" and on the other Adtech companies that make an open ecosystem usable for the advertisers.
Walled Gardens are closed online platforms that collect data within their network and use it for promotional purposes. By creating profiles and using the services offered by the platform, users disclose personal information. The operators of the platforms distribute the collected data exclusively to their advertisers in combination with their own inventory. This allows Walled Gardens to accurately identify and associate their users. The data always stays within the platform and forms the basis for precise targeting - but only within one's own "garden".
With digital advertising spending soaring, it's becoming increasingly important for brands to adopt a well-considered strategy on where and how they spend their media budget. It is essential to know exactly how the actual costs are composed. But cost and performance transparency are just one reason to prefer the open ecosystem to a closed one. It is a myth that walled gardens are the only place where targeted marketing can be successfully carried out. The open ecosystem knows more users than a single Walled Garden platform. This allows advertisers to reach a much wider audience. After all, users do not live in a garden that is closed off from the rest of the world.
In order for actors to be able to identify their target groups as precisely as possible across the entire open ecosystem, they rely on cookies. A non-personal, anonymous ID that allows the user to be recognized. The challenge is that each actor sets his own cookies, so these IDs are not uniform. A matching process between the individual partners allows the parties to assign the IDs to each other.
Cooperation as a solution
This challenge has prompted a number of actors to expand their cooperation and create uniform standards. It's not about one standard dominating everyone else. Rather, as many actors as possible, including publishers, agencies and tech partners, should agree on a clear number of IDs. These "standards" must remain interoperable and freely accessible to all. Projects like the Ad ID Consortium, for instance, have set themselves the goal of bringing together all parties involved.
This is a concept that has long existed in mobile environments. Because every mobile device carries a so-called Advertising ID or IDFA. The user can control centrally whether and to what extent he wants to share his ID for advertising purposes.
The concept benefits both advertisers and users alike. The collaboration of the actors in the open ecosystem brings together and promotes the benefits of programmatic advertising for successful campaigns - especially in times of rising advertising spending: reach, transparency, cost-efficiency and full control over performance.
Marketers must think outside the box
Transparency is something that is often criticized for Walled Gardens. The information about the target group is not disclosed by the platform operators. Since the advertising measures run only within the closed systems, the overall success of the campaign is difficult to measure by external tools and isn’t actively controllable. Marketers are thus forced to rely on the data and performance information provided to them by the operator.
Even in terms of reach, this is not only higher in the open ecosystem, but offers a variety of other channels as well through which the campaigns can be played - for example, audio streaming services or CTV. That’s why companies should think outside the box instead of staying in a limited environment, not to miss any trends here.
For advertisers, it is essential to reach out to their audiences in the best possible way to stay competitive. With programmatic advertising, it is no longer a shot in the dark. It’s about reaching their users at the right time, via the right channel and the right device with the right content. Open systems provide the framework conditions for successful campaigns.
By Daniela La Marca