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The Future of AdTech: Privacy Evolution & Audience Segmentation

Through this article, Vatsal Tolasaria, Product Manager at Echo, shares his insights on the future of AdTech and the role location plays within it.

4 min read
- Published on
April 4, 2024

QUICK SUMMARY

The future of AdTech will be determined by innovations and advancements that will adapt the industry to evolving privacy changes. Vatsal explores the significance of audience segmentation, and the changing privacy landscape within the AdTech industry, and introduces GeoPersona—a cutting-edge solution designed to enhance audience targeting effectiveness.

TABLE OF CONTENTS

The Future of AdTech: Privacy Evolution & Audience Segmentation

Introduction from Vatsal

I've had 5+ years at InMobi across Partner Manager and Product Manager roles, with expertise in building media buying platforms for advertisers. The AdTech industry has seen significant evolution, especially on the privacy front, which has had a profound impact on targeting and audience segmentation. This calls for advanced and innovative methods. That is a reason why I joined Echo Analytics— geolocation data stands at the forefront of this transformative shift, and I wanted to be part of it. Through this article, I aim to share my insights into the future of AdTech and the role geolocation plays within it.

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As of January 4, 2024, Google has been testing Tracking Protection, a key milestone in their Privacy Sandbox initiative to be launched later this year.

The Privacy Sandbox is expected to have a significant impact on audience targeting. As you may recall, Apple's App Tracking Transparency (ATT), part of the iOS 14 privacy updates rolled out in April 2021, has already had a drastic impact on audience targeting.

It’s clear that tracking online behavior is becoming increasingly difficult. Giants like Apple and Google have enforced several guardrails (with many more in the pipeline) to protect the privacy of internet users.

This has a direct impact on the efficacy of audience segmentation, a critical tool for all players in the AdTech world - including advertisers, media agencies, and demand-side platforms (DSPs), among others.

What is Audience Segmentation, and Why Is It Important for AdTech?

Audience segmentation is the division of target audiences into distinct groups based on predetermined factors, such as behavior, location, past interactions, engagement, preferences, and other criteria. In the AdTech world, this practice is absolutely necessary for precise ad targeting.

Let’s explain why audience segmentation is important for AdTech through an example:

A food company, Echo Protein, is planning to launch an advertising campaign for its new protein bar. Recognizing that not everyone is interested in purchasing protein bars, they aim to maximize advertising effectiveness by targeting consumers with a passion for fitness - let’s call them “fitness enthusiasts”.

Audience segmentation allows Echo Protein to pinpoint the preferences and interests of their target demographic, ensuring that advertising efforts are directed towards groups of people most likely to engage. By presenting tailored advertisements to this specific audience, the company anticipates achieving a high return on investment (ROI) while effectively reaching potential consumers interested in their protein bars.

But how can we gauge the preferences and interests of consumers? Historically, this has been carried out by using cookies on the web, and software development kits, or SDKs, in the case of mobile apps. First, the publisher’s website sends the cookie data to the consumer’s web browser. Then, once installed, cookies monitor consumer behavior across different sites. From there, personalized digital ads can be created for the desired target market.  

The data collected by cookies is stored using data management platforms (DMPs). Most DMPs sync directly with advertisers’ DSPs to ensure a safe data exchange.

How Will New Privacy Measures Impact Audience Segmentation?

Due to initiatives like Apple’s ATT and Google’s Privacy Sandbox, publishers will not be able to track consumer behavior across mobile apps and websites. This will make it very difficult for them to create audiences based on online behavior, significantly limiting advertisers’ abilities to effectively target consumers for their digital marketing campaigns.

What options will advertisers have moving forward?

Enter GeoPersona: An Audience Targeting Solution

Our revolutionary offering, GeoPersona, presents a dynamic approach to audience targeting, boasting two distinct advantages over conventional cookie-based methods:

Behavioral Insights Based on Real-world Interactions

Unlike traditional methods that rely solely on online activity, which may indicate interest but not necessarily intent, for behavioral insights, GeoPersona focuses on the physical locations people frequent — a stronger indicator of intent.

For instance, while someone casually browsing online for movie tickets may demonstrate interest in buying a ticket, the individual spending several hours inside a movie theater signals a strong affinity for cinema.

The online browser may be categorized as a “movie lover” simply due to their visiting the movie ticket site, even if they never buy a ticket, mislabeling them for future campaigns where targeted ads for movie tickets may fall flat.

The cinema visitor, however, has demonstrated a clear interest in movies by physically showing up to and spending time at the cinema, clearly earning their being labeled as a “movie lover”.

Privacy-centric Approach

Prioritizing privacy is key to GeoPersona. Instead of relying on personal identifiable information (PII) as has been done in the past, GeoPersona collects anonymized location data, which is aggregated and segmented based on visit frequency and the nature of the visit using machine learning. This process yields dynamic, PII-free audience segments that evolve with changing behaviors. This approach guarantees accurate insights while upholding the highest standards of data integrity and privacy protection.

All in all, GeoPersona ensures the AdTech strategy is finely tuned to capture audience intent. By prioritizing privacy and leveraging anonymized location and demographic data, it empowers ad spending and marketing efforts with precision targeting, delivering relevant ads that resonate with target audiences.

The Future of AdTech: A Market That We’re Evolving With

As the landscape of audience segmentation in AdTech evolves in response to external factors, including the cookieless future and the growing emphasis on user privacy, AdTech and other industries will have no choice but to adapt to these changes.

We've worked hard to help AdTech and other industries to future-proof their businesses, building a solution to not only maintain campaign effectiveness, but to enhance it. Opting for GeoPersona is one step you can take to better navigate these inevitable changes in the long term and feel certain that your business will not only survive, but thrive in this new world.

Author
Vatsal Tolasaria
Product Manager
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