Why You Should Care About Cohort Targeting
During the past several years, we’ve had many in-depth conversations about the marketing industry’s privacy regulations, which have given consumers more choice and control but have posed challenges from a targeted marketing standpoint. One of the most prominent solutions that we’ve shared is to focus on content targeting, because most behavioral targeting relies on third-party cookies. Since cookies are on the way out—and in some cases have already vanished—most behavioral targeting won't work.
However, there's one form of behavior- and interest-based marketing that doesn't need cookies. It's called cohort targeting, and it harkens back to the audience segmentation models of decades ago. Put simply, it targets groups of people instead of individuals. Think about your typical audience segmentation; you define an audience, such as “health insurance shoppers” or “DIYers” and then target them based on their shown behaviors.
But since we can’t use cookies, how does this work? The audience behaviors are identified by using non-PII data from user browsing history (and that information is kept private and stored within the browser itself).
Google’s Federated Learning of Cohorts (FLoC) is the best current example of this approach. Using its Chrome browser, Google is implementing FLoC to gather online activity, habits, browsing history and behaviors, grouping people into cohorts based on similar behaviors and common interests; therefore, advertisers can still use information from the cohorts to serve relevant ads to groups of people (without knowing who the individuals are).
Google says it’s performing like gangbusters and is almost as effective as cookie-based advertising, but a healthy level of skepticism is understandable; we don’t have much data yet to support these claims. Also, we’ve just learned that the FLoC API rollout has been delayed until Q1 2022, so we’ll be watching the development of FLoC to determine its viability as an alternative targeting solution.
We appreciate and support the revival of cohort targeting in a modern digital world, especially since it will be applicable to all platforms—linear TV, connected TV, mobile and even out-of-home video. But does this mean that all the progress we’ve made over the last several decades, getting smarter and more accurate with our targeting, was all for nothing?
The advertising will be less personalized, sure, but that doesn’t mean we’re going completely backwards. Cohorts can still lead us to the right audience segments for our brands, and we now have ad formats that are much more effective (interactive video, native advertising, sponsored content, etc.) to make a stronger connection when we do reach those audiences, all while avoiding restrictions and respecting consumer privacy. It’s also a matter of how you use them in tandem with other activities. Building cohorts using first-party data combined with contextual targeting would increase the preciseness of the targeting.
And remember, the targeting is only as effective as you make it—how you define the cohort group determines its efficacy, so make sure your definitions are as representative as possible of the attitudes, feelings, opinions, motivations and specific interests of your audience personas or customer segments.
Cohort targeting is one of the only user-targeting methods that is considered privacy compliant. The question is: can it still be effective? We will continue to test, learn and analyze to find out.
Sources: AdRoll, Ad Exchanger, TV Rev, New York Times
Get in touch with Mike Pocci to learn more.