How Direct Response Advertisers Will Buy On the Open Web

Direct response marketers may find themselves stuck between a rock and a hard place as digital advertising moves toward a more private ecosystem. Rachel Parkin, CafeMedia’s EVP of Strategy and Sales, looks to a path forward.

In a vacuum, advertisers would like to support great content creators. Advertisers believe in the transparency and openness of the web. And, advertisers certainly would prefer not to allocate their total budget to just one or two massive companies. In practice, however, performance on the web will become harder to measure and, in turn, it will be more challenging to prove efficiency. That means direct response advertisers will find it difficult to invest in open web advertising without extra effort and more tailored strategies.

The walled gardens and platforms have made it all too easy for marketers to target extremely narrowly defined audiences and determine what drives the most efficient cost per acquisition, all within a single-source environment. Many direct response advertisers, like direct-to-consumer (DTC) companies, are marketing niche products at minimal budget levels. Given the growing complexities of digital advertising, these marketing teams simply won’t have the bandwidth to support custom and specific strategies for the web.

For brand marketers with a primary goal of shifting brand perceptions, the targeting options moving forward might even be better — and there is less need for precision and speed in measurement. For direct marketers with a primary goal of selling products, there are more considerations and implications to advertising in the cookieless future.

Reaching the right audience

For direct response advertisers, where budgets and targets may be narrower, specificity of targeting plays a role in driving action. Little will change about what targeting the platforms can offer in the future, so the open web will have fewer options. But with ingenuity and deeper partnerships, there will be real choices that enable direct response advertisers to keep investing in the open web.

One way to achieve the same level of precision is by using identity-based solutions for campaign targeting. This will enable advertisers to carry forward the same strategies and tactics they use today. And while identity solutions will only cover a fraction of consumers, this may be adequate for many direct response advertisers. Some of these advertisers may be able to reach enough consumers (relative to their budget) entirely within a logged-in universe.

Another approach is to work more closely with publishers to define specific audiences that could better match intent. Publishers could customize contextual channels based on focused keywords or concepts an advertiser is interested in. Direct response advertisers could also match their own first-party data with publisher audiences using data bunkers or clean rooms. That provides a pathway to create look-alikes that map consumers most likely to engage onto the web-based content they read most.

And, of course, direct response advertisers might find that there’s no time like the present to focus on building a more robust first-party data strategy. With reduced access to third-party sources and less detailed data sources on prospects, there are significant benefits to creating a more robust content framework on advertisers’ own properties. A content library will directly tell advertisers more about what consumers respond to, and direct response advertisers can expand their retargeting efforts, which will remain somewhat intact on the web, to encompass these insights. Better yet, flows that enable consumers to choose their own adventure — like path-dependent content or quizzes — organically reveal more about consumers’ interests and what products or offers would be a fit.

Measuring Performance

The goal for most direct response marketers is to move customers down the funnel toward an immediate purchase or action. This means the ability to measure and optimize campaign effectiveness is crucial to ensure advertisers can profitably move products. The forthcoming privacy-centric enhancements will move the web toward aggregate and mixed approaches to measurement, which might make the closed-loop environments within the walled gardens look even more attractive. Let’s consider some of the ways to address the implications of losing one-to-one frequency and measurement.

The loss of global frequency capping has many brand advertisers worried about overburdening consumers, but some direct response advertisers may actually want the opposite strategy: to reach a small number of customers with high frequency. This could instead be managed by narrowing audience targeting to a small subset of cohorts or interest groups or publisher-created channels. Regardless of whether the targeting is sourced from FLoC or direct from publishers, advertisers may find benefit in focusing their buy on a selection of publishers rather than the web at large, to essentially “gate” their own version of the web and make the desired impact with consumers.

Marketers will also have to get up to speed with the new measurement approaches. To mirror closed-loop measurement, identity-based solutions will enable full visibility into sales lift and investment returns. Direct response advertisers can lean on measurement in these “known” environments to extrapolate the implied results elsewhere. These results can also provide advertisers with a means to evaluate web-based strategies and platform tactics on more equal footing. The Privacy Sandbox is also introducing new aggregate-level measurement capabilities for cookieless consumers. While these tools will no longer use one-to-one tracking, marketers should find these sources still give enough insight into web performance as investment decisions are made at the level of channel strategies or audience tactics and not of individual consumers.

Campaign data is also likely to be delayed by a brief time period or may require a minimum number of actions before data can be extracted. The best approach to less real-time visibility is to use test-and-learn budgets to collect insights about what strategies work and which don’t, rather than starting multiple strategies at the same time with the intention of optimizing on the fly. By pre-vetting strategies with smaller budgets over a more extended time period, advertisers can instill confidence and success in the web tactics that will achieve the best return.

Finding a path forward

What can a marketer do to overcome some of the differences in reaching consumers and measuring success on the web? Make a choice to diversify investment with the web. Even if spending with the platforms seems like an easier choice, advertisers putting all their eggs in one basket will ultimately find the platforms have the power to squeeze them on pricing, which combined with pricing pressure from increased competition of other marketers following the same path will cap their effectiveness. And, advertisers’ messages will only be reaching one pool of customers in one mindset, missing out on millions of other potentially interested users. There are certainly different approaches and trade-offs to investing in the web, and it will take conscious decisions from direct response advertisers to commit to a balanced media buy.