What does the future of ethical targeting look like?

By Venessa Hunt, ThinkPremiumDigital general manager | Sponsored
Venessa Hunt

We’re entering a new era of data-driven marketing and the winners will be the ones that take consumers into account, applying sustainable and ethical practices to data usage. ThinkPremiumDigital’s Venessa Hunt explains.

If you think there will be a day when we go back to stalking prospective customers around the internet, you are wrong.

Thanks to data breaches, dying cookies, changes to regulation and policy recommendations, the world digital marketers have become accustomed to is set to change forever.

One of the key reasons for this is heightened consumer awareness. According to research by Integral Ad Science, 85% of people are aware apps and websites share their data for targeting. And the Australian Community Attitudes to Privacy Survey 2020 found that 50% of Australians have a problem with how their data is being used with nine in 10 wanting more control.

Consumers are onto us. But here’s the catch: we know ads curated for a specific audience segment – based on behaviours or needs – are often more effective. If you’re looking for the lowest cost of conversion or acquisition, there's less wastage since you’re advertising to people who are more likely to be interested in your product. So, it seems unlikely we’re about to stop targeting altogether.

This dichotomy raises the question: what does the future of ethical targeting look like?

The relentless obsession with getting more return for every dollar by hyper-targeting and chasing the cheapest conversation at all possible costs is no longer sustainable. That much is evident.

Rather than targeting for the sake of targeting, it’s time to stop old habits and start to question what forms of targeting are actually needed and what return they provide, especially in a market the size of Australia. Just because we can, doesn’t always mean we should.

An industry wide reset on how to approach targeting is needed.

In his book, How Brands Grow, Professor Byron Sharp says: “Sophisticated mass marketing doesn’t mean targeting everyone, nor does it mean treating everyone the same. It means understanding the heterogeneity in your market, and then catering for only the differences that matter in order to maximise reach while not eliminating the benefits of scale.”

Much like Sharp, I believe targeting is effective when approached through the lens of quality and scale.

The most effective data segments have two key attributes:
1. Quality (accuracy/relevancy)
2. Reach (scale)

Without both attributes, you exit a world of chasing efficiencies and enter a world of hyper-targeting. Hyper-targeting is defined as speaking only to people who are currently in the market for your product and excluding everyone else, a move Sharp would see as detrimental to the growth of your business since. For example, you could be priming next year’s auto intenders now.

In terms of the ethics of data-driven targeting, the basics are obvious. People must be made aware, in plain, simple terms, of what they are handing their data over for. And it goes without saying, brands and publishers should always adhere to these terms and conditions. Despite the example of some platforms, on-selling data without people’s consent is entirely unethical.

And it’s not just the ethics to consider. Data collected and used without the explicit consent of its owners can actually reduce responsiveness to ads, as an experiment conducted by the Massachusetts Institute of Technology found. When ads were fuelled by third-party data, concerns about privacy outweighed appreciation for ad personalisation which led to a 24 per cent drop in purchase intent.

As we move further into a cookie-less trading environment, audience and contextual targeting using verified identity and relevant digital behavioural signals will become more and more important. Premium publishers and brands with premium data are primed for this new era of sophisticated mass marketing.

Although there is uncertainty in market right now around how the suggested changes to privacy regulation will play out and tech vendor changes will land, this moment presents a golden opportunity for brands and publishers alike.

It’s time to fall back, regroup and really ask ourselves what principals in offline media we can bring into online media, especially when it comes to media allocation, measurement and attribution.

The moment of change is upon us. It’s up to us how we respond to it, and I’d urge you to do so ethically.

Venessa Hunt is the General Manager of ThinkPremiumDigital.

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