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What is Audience Segmentation and Why is it Important for Cookieless Monetization?

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Audience segmentation is a pivotal strategy in digital advertising as it helps target a specific audience with precision, creating a major impact and bringing in a higher revenue. With the impending removal of third-party cookies by Google, understanding available audience segmentation tools is more crucial than ever. This article delves into the intricacies of audience segmentation, its benefits, and how publishers can adapt to a cookie-less world.

Understanding Audience Segmentation

Audience segmentation is the process of dividing a broad audience into smaller, homogenous groups based on criteria like demographics, behavior, and interests.  Third-party cookies have helped publishers make this possible by collecting data on user behavior, such as interactions and preferences, across multiple websites. By aggregating this data, publishers gained comprehensive insights into user interests and hobbies which allowed them to create detailed audience segments, which ultimately led to better monetization

However, Google is removing third-party cookies, which will significantly impact audience segmentation by limiting the data available for cross-site tracking. This change may require publishers and advertisers to rely more heavily on other approaches such as in first-party data in order to continue being able to segment their audience.

Audience Segmentation and Header Bidding

In the digital world, one publisher can own several sites that cover a wide variety of topics. All of these sites then have pages with their own formats (such as articles, opinion pieces, polls, etc) and each of these pages have ad slots that are ready to be filled up once a visitor enters the page. 

As we know, this is when header bidding takes place. Multiple advertisers try to reach the end user – but only the one offering the highest bid takes the cake. This is when audience segmentation helps publishers.  Instead of simply stating that an anonymous visitor has entered their page, the supply side can now state enriched information. For example, they can say that a male teenager who lives in Chicago and is interested in outdoor activities has entered their page. This gets the attention of advertisers who want to reach this specific target, and are willing to offer higher bids to do so

And it doesn’t stop there. 

Once the advertiser wins the bid and the publisher displays their ads, the visitor is more likely to demonstrate genuine interest and the probability of engagement goes up. Brands observe this higher viewability rate and user attention, and in the future are likely to keep offering higher bids to reach these publishers’ pages.

Our own Opti Yield technology works in a similar way. By aggregating real-time data from various signals, it optimizes the floor pricing, which in turn improves bid requests.

Audience Segmentation and Direct Deals

Audience segmentation also helps publishers enrich their inventory and make more profitable direct deals. Publishers can package their premium inventory (high-viewability ad placements, specific content sections, etc.) and bundle it with relevant context information gotten by audience segmentation. This allows them to command higher CPMs and sell their inventory at a premium, as more advertisers will be willing to pay extra in order to access their target audiences within the publishers’ high-quality content environment. So audience segmentation helps in making direct deals more efficient and profitable.

A good way to enrichen your inventory is by offering attractive and innovative ad formats that don’t distract from the user experience, such as our own Opti Engage, which displays multiple advertisements within a dynamic carousel.

Alternatives to Third Party Cookies

At Opti Digital, we are staying ahead of the curve by using universal IDs, which are unique, anonymized identifiers assigned to users within a publisher’s ecosystem, enabling cross-site tracking and audience segmentation without relying on third-party cookies. This alternative allows publishers to harness and monetize their own data, ensuring targeted advertising, while adhering to privacy regulations.

Another approach is leveraging first-party data. By analyzing user interactions, content consumption patterns, and subscription data, publishers can create rich first-party audience segments based on interests, behaviors, and demographics.

Additionally, publishers can explore data clean rooms, which allow for secure sharing and matching of first-party data with advertisers or partners, facilitating audience segmentation and targeting while maintaining user privacy.

Ultimately, a combination of these approaches, along with a strong emphasis on data privacy and user consent, will be crucial for publishers to continue segmenting their audience and maximizing revenue in a cookieless era.

Don’t get left behind when the cookies crumble. Contact us if you would like to keep driving success in a cookieless world!

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