Using First-Party Data and Contextual Targeting for Consumer Privacy and Effective Advertising

Digital advertising is not the same today as it was some years ago. The data privacy regulations like the GDPR and the rising privacy awareness among consumers have been reshaped by the data privacy regulations. Mainstream web browsers like Firefox and Safari have already blocked third-party cookies, and Google’s Chrome will do so by 2022.

Therefore, first-party data and contextual targeting are emerging as the primary ways for brands to reach consumers. Each of these ways does not breach people’s privacy and offers an effective approach to digital advertising.

First-party data signifies a trustworthy relationship between consumers and brands. At different points during a consumer’s journey such as while buying a product, creating an account, or signing up a subscription, people give their personal information and have faith that the other party will not misuse it in any form. Eventually, as customers engage more with the businesses, they can know and serve their customers better. 

Research shows that consumers expect brands to use their data for providing them personalized experiences. A survey study with three thousand participants across Canada, the United States, and the United Kingdom revealed that sixty-three percent of them expect a personalized experience as a standard thing. Fifty-four percent of participants showed a willingness to give their personal data if it would be utilized by the other party to provide personalized experiences. This percentage was seventy percent in the case of millennials and seventy-two percent for the members of Generation Z. 

Marketers that use first-party data witness a lift in advertising performance. A study revealed that from single ad placement, marketers can get two times the incremental revenue by leveraging first-party data. Brands that make use of first-party data in their ad campaigns witness lifts in brand awareness and favorability, along with an increase in purchase intent, in comparison to brands that don’t use first-party data.

Contextual targeting involves showing those ads to people that are in line with the content they are engaging with. This significantly increases the likelihood of people’s engagement with the ads, thus making it a very effective approach to advertising. By leveraging contextual ad targeting, marketers can effectively connect with the right people at the right time.  

Contextual advertising does not involve the use of consumers’ personal data, and is, therefore, compliant with the data privacy regulations. Research shows that people like to see those ads against textual or video content that are contextually relevant to the content. A survey study involving over one thousand participants revealed that consumers tend to have a more favorable opinion of a brand whose ads are contextually well aligned with the surrounding content.  

Besides being highly effective, contextual ad targeting is more cost-efficient when compared with behavioral advertising. In the past, keyword contextual targeting, which involved placing ads on the basis of keywords, was used as the principal way to serve contextual ads. But now AI-powered contextual advertising has surfaced for both textual and video content, and it offers excellent results. AI-powered contextual video advertising technology can accurately detect in-video contexts, thus enabling precise and granular ad targeting at the video level. By using contextual ad targeting along with the first-party data, brands can run high-performing ad campaigns without breaching consumers’ privacy.