emarketer webinar: cross-device targeting—the challenges and near-term possibilities

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Cross-Device Targeting:

The Challenges and Near-Term

Possibilities

Lauren T. Fisher

Analyst

January 15, 2015


Agenda:

The current state of cross-device targeting

Obstacles hindering cross-device targeting

The two main approaches to device identification

The near-term future


The Current State of

Cross-Device Targeting


What do we mean when we say, “cross-device

targeting”?

A coordinated, strategic approach to identifying and

messaging individuals across multiple digital screens


Cross-device

ad targeting

was a hot

topic for

advertisers in

2014


Cross-device

will continue

to gain

momentum

as US adults’

time and

attention

grow on

and across

multiple

screens


The desktop

remains the

dominant

screen for

researching

and buying

products—

even among

smartphone

owners—but

other screens

are gaining


In fact,

advertisers

should expect

consumers to

take a

cross-device

approach to

fulfilling their

purchasing

goals


Today, a good

portion of

publishers

say they offer

cross-device

advertising

packages


But not all platforms and providers currently live

up to the true definition of “cross-device”

“ There’s lack of clarity around [device

identification] offerings. … You might see

the word ‘multidevice’ used. Oftentimes,

those people are allowing advertisers to

buy on mobile and buy on desktop, but

what they’re not doing is stitching that data

together. If the data remains

fragmented, it’s not really

cross-device.”

—Ben Manning, director of product management at

Quantcast


The bottom line: cross-device targeting is still in

its infancy


Obstacles Hindering

Cross-Device Targeting


Taking an omniscreen approach isn’t easy; it

requires multiple pieces to fit together


Marketers

have long

relied on

cookies to

track and

target

individuals

across the

digital web


But as the digital universe expands beyond just

web activity, the cookie is no longer effective


Today, there

is no universal

tracking

alternative,

creating

significant

cross-device

challenges


Addressing this challenge requires an entirely

new toolset—and mindset

“Cross-device is the most important topic in digital

advertising right now. It’s a big, fundamental

shift to go from talking about devices and

optimizing, targeting and attributing against devices

to talking about people. It literally changes

every aspect of your marketing efforts.”

—Chad Gallagher, global director of mobile for AOL


Key Takeaways:

To stay effective, companies must consider each screen

True cross-device campaigns require coordination when

it comes to identifying and reaching consumers. But

such coordination poses significant challenges today,

given the lack of a universal method of identifying

individuals across screens

Overcoming this obstacle will require the industry to

take an identity-based—not device-based—approach to

tracking and targeting individuals


An Identity-Based

Approach: The Two Main

Methods of Device

Identification


Companies today use one of two identifying

methods:

Deterministic identification

Probabilistic identification


Deterministic Identification

How it works: Relies on known-user information to recognize,

with near-certain confidence, an individual on each of his or her

internet-connected devices.

Examples of data used: Anonymized login data, CRM-level data,

email address or customer ID.

Companies taking a deterministic approach: Facebook,

Google, AOL, Amazon.com, The Weather Company, eBay, etc.


Probabilistic Identification

How it works: Uses a mix of publicly available

ad-serving data to assess the statistical probability that a

specific device belongs to a particular individual.

Examples of data used: IP address, browser version, operating

system data, device type, browsing behavior, content consumption patterns, location-based data and time of day.


Both approaches come with advantages and

trade-offs advertisers must consider:

Deterministic:

– Near-perfect accuracy

– Relatively transparent in

matching methodology

– ID method and data limited

to specific publishing

environment

– Might lack in scale

Probabilistic:

– Varying degrees of accuracy

(50% to 90%+)

– Matching algorithms deemed

proprietary

– General practice that can be

applied to any property or

campaign

– Greater scale


Today’s reality: Advertisers typically use a

combination of the two

“ Even the deterministic IDs won’t be

as complete as we’d want them to be.

So you’ll always have to

augment with some probabilistic

approaches.

—Yosha Ulrich-Sturmat, vice president of

product marketing at Neustar


How much advertisers rely on one vs. the other

will depend on a variety of factors:

Breadth of CRM or first-party data

Campaign objectives

Typical media-buying portfolio


Such methods solve for identity, but still don’t

deliver a holistic, universal view of an individual

“ Identity-based advertising at

scale is really the Holy Grail. To

know that we are actually reaching

and engaging the consumer that we

intend to target with our

advertising as opposed to sort of

guessing … that is really the Holy

Grail of marketing.”

—Natalie Bokenham, vice president and

managing director of digital at UM


Key Takeaways:

Device identification is the first step on the path to

coordinated cross-device targeting

Today, advertisers rely on both probabilistic and

deterministic methods of pairing individuals’ identities

to their devices

Though both solve for user identity, lack of a universal

approach leaves advertisers with fragmented

cross-device targeting efforts


The Near-Term Future


The near-term future for cross-device success

will largely be shaped by:

Discussions surrounding a new, identity-based universal

identifier to replace the cookie

Demand for greater standardization of identification

approaches and methodologies

Data privacy discussions


Data is the key to coordinated cross-device

targeting, and advertisers want to be the ones in

charge of coordinating those efforts

“ What we see today is not the long-

term solution. Marketers don't want …

every single publisher having a

proprietary way to do cross-device.

They want the ability to activate

and leverage their own data in

a consistent way across any

media channels they might use. ”

—Surag Patel, vice president of global product

management and marketing at AdTruth


But is a universal identifier on the horizon?

Advancers:

– Advertiser demand

– Industry movement from the

4A’s Media Leadership

Council and IAB

– Privacy concerns

Inhibitors:

– Competition among ID

providers

– Disagreement over which

methodology to use

– Privacy concerns


In the short term, expect to see greater

standardization, especially to probabilistic:

Greater transparency around probabilistic data

collection and usage to determine ID matches

Third-party validation of reported match rates

Publisher push to incorporate deterministic methods

when possible


Also expect both consumer and company privacy

concerns to influence data collection and usage


Key Takeaways:

Cross-device targeting is in high demand as consumers

diversify their digital media consumption, but it is still a new,

evolving tactic

Before advertisers can do anything cross-device, they first

need to match devices back to a single individual

Deterministic and probabilistic approaches match identities to

devices, but neither is foolproof nor 100% scalable

2015 will be an important year for advancements in

cross-device targeting, but solutions are unlikely to be fully

realized, thanks to outstanding questions surrounding the

creation of a universal identifier and data privacy.

37

environmentvariables

IP address

Country of origin

Time zone

Device type

Operating system

Browser type

Screen resolution

site behaviorvariables

Customer /

Prospect

New/return visitor

Previous visit

patterns

Previous Product

interests – top level

Previous Product

interests – low level

Searches

Previous online

purchases

Previous Campaign

exposure

Previous Campaign

responses

offline variablesCRM

Call center

Ticket sales

3rd-party data

temporal variables

Time of day

Day of week

Recency

Frequency

referrer variables

Referring domain

Campaign ID

Affiliate

PPC

Natural search

Direct/bookmark

Social graph/login

38

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Lauren T. Fisher

Cross-Device Targeting:

The Challenges and Near-Term

Possibilities

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emarketer webinar: cross-device targeting—the challenges and near-term possibilities

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multiple screens

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