Does Size Matter in Advertising?

The advertising industry is undergoing a seismic transformation. The phasing out of cookies, increasing concerns about privacy, the lack of transparency in the supply chain, MFAs and the advent of AI have all ?thrown a spotlight on the murky world of audience segmentation and sizing. (Not Screen Size)

?The age-old adage, "Half the money I spend on advertising is wasted. The trouble is I don't know which half," has never been more relevant. The problem might be even deeper than what meets the eye. May be even the half which seemed to have worked for you might be an illusion too.

As we delve deeper into the complexities of modern advertising, we must address the question: Does size matter in advertising?

?We have ?blind faith placed on audience segment sizes reported by platforms or Adtech partners. Traditionally, "bigger is better" has been the mantra for audience segmentation. However, in today's privacy-first landscape, this approach is demonstrably flawed.

?The Size Question in Advertising

Advertisers craved massive audience segments, chasing the illusion of reach and scale. Platforms readily obliged, providing seemingly impressive numbers for everything from "Mothers In-Market for Baby Food" to "Luxury Travel Enthusiasts." But the question that begs to be asked is: are these segments real,human and worth spending money on?

?The lack of transparency surrounding audience segmentation is alarming.

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·????? How are these segments built?

·????? What data sources feed them?

·????? Are they rife with bots and fraudulent activity?

·????? Are they in sync with the actual population size and census data ?

·????? How do you ensure that the size thrown is genuine?

·????? Even if not fully genuine, is there a confidence % it comes out with?

·????? How many of them are actually targetable?

·????? How many of those moms actually exist?

·????? Or is it just a play of these platforms to throw some number to survive in the advertising industry?

?The answer, more often than not, is a disconcerting silence. Platforms rarely, if ever, provide confidence intervals or details on the methodology behind their sizing. And even if they provide, we seldom go and verify the claim. This opacity makes it impossible to know how many of these "potential mothers" are actual humans, let alone moms genuinely interested in baby food.

The Mirage of Large Audience Segments

?Large audience segments can be deceptive. They promise extensive reach, but how many of those audiences are genuine? A recent report by White Ops revealed that bot fraud could account for up to $35 billion in ad spend by 2025 . This statistic underscores the importance of verifying audience authenticity. Size without quality is meaningless and potentially damaging.

?Advertisers are increasingly skeptical about the audience segments they are provided with. Are these segments genuinely reflective of the target audience? Are they composed entirely of real humans? The issue of non-human traffic (bots) inflating audience sizes is a significant concern. Recent studies have shown that up to 37% of internet users are non-human bots . This calls into question the authenticity of the audience sizes reported by various platforms.

Questioning the Status Quo

?How do we ensure that the audience sizes reported by platforms are genuine? This requires a multi-faceted approach:

?1. Transparency from Platforms: Platforms must provide clear methodologies on how they curate audience segments. This includes details on data sources, the use of probabilistic models, and the steps taken to eliminate non-human traffic. Advertisers have limited visibility into how audience segments are constructed. Are they based on declared demographics, behavioral data, or opaque algorithms? This lack of transparency makes it difficult to assess the quality and relevance of the audience pool. Transparency from platforms and partners is non-negotiable. Marketers must demand clear insights into how audience segments are curated.

?2. Verification Mechanisms: Third-party verification tools can help ascertain the authenticity of audience segments. But we need to even ask them about their own technology as even many of the known big names have been failing to arrest many of these frauds. You need to task your agency/teams to verify the claim before you decide to target them. You only get to see or hear about the fraud% which their tech is able to detect. What about the various frauds which are going undetected everyday?

3. First-Party Data: Leveraging first-party data is becoming increasingly important. Brands with robust first-party data strategies can better ensure the accuracy and relevance of their audience segments. This might lack scale across many marketers but you can use them intelligently to curate better and genuine audience segments with access to the verified supply side across publishers and retailers.

?4.Human Verification: Ensuring that audiences are real people, not bots, is paramount. Inflated audience segments are a common tactic for platforms to appear more attractive. Bots and fraudulent activity can significantly skew audience size figures. Without transparency into platform methodologies, advertisers have no way of verifying the legitimacy of these segments.

5. Contextual Relevance: Audience segments should be contextually relevant to the brand and campaign. Tools that leverage contextual targeting can help in building more effective and relevant segments. Large segments often encompass a broad spectrum of individuals, many of whom may not be genuinely interested in the advertised product. This scattershot approach leads to ad fatigue, wasted spend, and ultimately, a disconnect with the target audience.

6.The Rise of Attention Economics: In a world saturated with content, a user's attention is the most valuable currency. Large, generic segments fail to capture the nuances of individual attention spans and content preferences. Effective advertising requires laser-focused targeting to grab and hold a user's fleeting attention.

8.The Role of AI and Machine Learning :AI and machine learning hold promise in addressing some of the industry's challenges, but they also bring their own set of issues, particularly around transparency and privacy. AI can enhance segmentation accuracy by analyzing vast amounts of data quickly. However, it’s crucial to understand the algorithms and data sources behind AI-driven audience segments. Transparency in AI processes is essential to trust and effectiveness.

Moving Forward: Embracing Smaller, More Effective Segments

The future of advertising lies in embracing smaller, more precise audience segments. Large, generic segments are a thing of the past. Brands must focus on building and targeting smaller, high-quality segments that drive real engagement and conversion. This shift requires a mindset change but promises greater ROI and more effective campaigns.

The Ideal Audience Size

?In an industry where bigger has often been equated with better, it's time to reevaluate this notion. The ideal audience size must be relevant and genuine. According to research by Nielsen, advertisers are increasingly prioritizing quality over quantity, focusing on segments that are more likely to convert, even if they are smaller .

?First-Party Data: The New Gold Standard

First-party data is emerging as a critical asset in the post-cookie world. Brands that invest in robust data collection strategies can build more accurate and valuable audience segments. For example, loyalty programs and direct customer interactions provide rich data that can enhance segmentation efforts.However, the scale of first-party data might be limited, necessitating strategic partnerships and data-sharing.

Curation: Crafting the Perfect Audience

Curation goes beyond mere selection; it’s about creating precise, high-performing audience segments. Curators use platforms that allow filtering by location, behavior, and other contextual factors to build tailored segments. These curated segments, delivered through Deal IDs, ensure that campaigns reach the most relevant audiences.

Curation is critical in ensuring the quality and effectiveness of advertising campaigns. The process of media curation involves combining first-party data with inventory sourced from third-party publishers to create refined auction packages. These packages can then be delivered to demand-side platforms (DSPs) as easy-to-activate Deal IDs.

Media curation isn't just about selecting placements; it's about harnessing data and insights to deliver high-performing, transparent campaigns. By prioritizing trustworthy sources and embracing transparency from the outset, advertisers can achieve optimal performance. Here's what marketers can do:

·????? Ask Questions: Don't blindly accept audience segment sizes presented by agencies or platforms. Ask how the segments were curated, what data sources were used, and what methodologies were employed.

·????? Demand Transparency: Insist on platform partners demonstrating the process behind audience curation. This includes understanding the role of machine learning and the margin of error associated with audience size estimations.

·????? Partnering with reputable data providers: Working with data providers who prioritize responsible sourcing and ethical collection practices is crucial.

A Call for Collaboration

The key to unlocking the true potential of advertising lies in collaboration. Marketers need to break free from the passive acceptance of pre-built segments and actively delve into the "how" behind audience curation.

And all such collaboration needs to be done in a privacy compliant manner using the latest of PETs (Privacy Enhancing Technologies). This will not just improve campaign performance but also rebuild trust with consumers in a privacy-conscious world.

?The Future of Advertising

In the complex and rapidly changing landscape of modern advertising, the question "Does size matter?" can only be answered with a nuanced understanding of audience authenticity and relevance. Size does matter in advertising, but what matters more is the relevance of the audience segment, how authentic it is with respect to the actual human audience in the market , and the degree of transparency that it comes with.

Only then can we begin to unravel which half of our advertising spend is truly working and why. The emphasis must shift from size to quality.

‘’Ask Questions’’ ! Learn to ‘’Verify Claims’’!

Anil Pandit

Executive Vice President

Publicis Media

*Disclaimer: This post is for informational purposes only and does not endorse or disapprove of any specific tools, platforms, or technologies. The views and opinions expressed in this article are those of the author and do not reflect the official policy or position of the company he is employed in.?

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