Garbage in, garbage out: Why cheap reach doesn't pay off in the digital ad space

For the past several decades, it’s been incredibly easy to reach large audiences with digital ads for very little spend. But with third-party data quality getting worse by the day, it’s a good time to reevaluate this strategy and examine why brands might be well-advised to change course.

In this article, we'll explore why prioritizing quantity over quality in digital advertising can be a big disadvantage for brands. We'll delve into the challenges posed by the open web now that third-party cookies have become so ineffective and how walled gardens can make the problem worse. Finally, we’ll highlight some options which do a better job of allowing brands to ensure their messages reach the right audiences.

But isn’t all reach good?

There are a few reasons why marketers can be lulled into the trap of more = better (when “more” is a larger audience). Let’s highlight what these are and why they can lead to wasted ad spend:

Volume metrics

It’s tempting to justify ad spend using metrics that highlight large numbers of impressions or clicks. Simply the volume of reach can be appealing, even if it is accompanied by low engagement and conversion rates.

Low costs

This one is simple enough: Platforms offering lower-cost advertising space may seem like an attractive proposition.

Pressure for immediate results

Advertisers may opt for cheap reach strategies to meet expectations of immediate increases in traffic or brand visibility, even if these results don't necessarily translate into long-term success.

Limited resources for data analysis

Some brands lack resources or expertise for in-depth data analysis of their advertising efforts. As a result, they might opt for broader reach strategies that appear simpler and require less analytical sophistication.

But the fact of the matter is that even if your organization hasn’t actively pursued cheap reach because of the factors above, there’s still a good chance that you were affected by it anyway. Read on to find out how (and what you can do about it).

Poor targeting is inevitable on the open internet

Targeting precision, frequency capping, and/or ad personalization on the open web is poor — and getting worse. The reason? Third-party data quality is decaying as web users become more savvy to how they can limit the information collected about them through website visits.

But the “spray-and-pray” approach employed by many brands to make up for this signal loss is also the opposite of effective. With the average campaign running on an astounding 44,000 websites, it’s safe to assume that not every site has been well selected for its suitability in reaching the desired audience. And it goes without saying that any brand whose ads are plastered on this many sites runs the risk of oversaturation and annoying its would-be audience.

Walled gardens ≠ cheap

Reaching people with your ads is easy within walled gardens, but it certainly won’t be cheap. And in contrast to what was possible with third-party cookies, walled gardens don’t coordinate to cap frequency. So you’ll face significant overlaps in your target audience. Given the shared user base between platforms like Instagram and YouTube, your "best" ads may be reaching the same audience repeatedly.

You should also keep in mind that not everyone you want to reach will use walled garden platforms, and that people spend most of their time on the open internet. This means that even if you do end up turning to walled gardens to address the signal loss caused by third-party data decay, you’ll still be missing opportunities to communicate with a significant portion of your audience.

The good news is that there are alternatives which ensure you can target the right audience for a fair price while not bombarding them with repetitive ads.

If cheap reach is over, where can I get good, targeted reach that isn’t expensive?

So far, this article has focused on solving problems from a brand’s perspective. But the privacy and integrity of your customer data are big issues from a customer’s point of view as well, and should be top priority — not least of all because this information also creates a competitive advantage for you. Here are the two main privacy-preserving approaches that can help you optimize your reach:

Contextual advertising

Contextual advertising doesn’t target individual consumers, so it eliminates the dependence on data obtained from either first or third-party sources. Instead, brands focus on reaching specific audiences based on the context of the content those audiences consume. For example, a brand could acquire the topic "golf" within a sports publication, triggering its ad for any reader consuming golf-related content.

So while contextual advertising protects privacy, its effectiveness hinges on users encountering the targeted content. This introduces an element of uncertainty, unlike more precise targeting methods.

Putting first-party data to use

If your brand wants to get more specific in audience targeting than what contextual advertising will permit, you’ll have to use your first-party data. But this data on its own won’t get you far — you’ll inevitably have to partner with a publisher to be sure your message gets delivered to the right audiences.

This is where things can get complicated, as data protection and compliance regulations restrict the amount of access outside organizations should have to a company’s proprietary data. Let’s explore your main options for collaboration on first party data: ID graph providers, data platforms, and data clean rooms.

Identity graph providers

Identity (ID) graph providers specialize in connecting and unifying diverse sets of customer data across multiple channels and devices, offering a unified view that can improve targeted marketing.

Leading providers offer the resolution of different identifiers, like email addresses and mobile device IDs, into a cohesive and actionable customer profile. This allows for more effective targeting and personalization in marketing campaigns. However, ID graph data privacy protections fall short in comparison to other first-party data collaboration solutions, as a certain degree of trust to the platform provider is required. Additionally, your brand data is collected and monetized by the vendor as the data you provide essentially enriches their ID graph, which in turn benefits the broader user base of their services (including your competitors).

In situations where businesses want or need to ensure data collaboration with heightened security, solutions that offer a balance between collaboration and stringent privacy measures are recommended.

Data platforms

Data platforms serve as centralized repositories for storing, managing, and analyzing large amounts of data. They provide businesses with the infrastructure to handle data efficiently. Some offer cloud-based data warehouses that allow seamless data sharing and analysis, while others focus on privacy-first collaboration, enabling organizations to connect and derive insights from their data without needing to physically move it. These platforms let businesses make informed decisions, derive valuable insights, and strengthen data-driven capabilities.

When compared to identity graph providers, data platforms typically lack the specific capabilities needed for creating a unified customer view. They also tend to encounter challenges in ensuring robust data collaboration while preserving privacy. So although data platforms provide a foundational infrastructure, the nuances of privacy-centric collaboration may call for a combined approach, drawing on the strengths of both data platforms and data clean rooms.

Data clean rooms

Data clean rooms (DCRs) are secure environments that facilitate collaborative data analysis while safeguarding data privacy.

Using this technology allows brands to navigate the challenges posed by deteriorating third-party data signals. By securely connecting their customer data with a publisher's audience data in a clean room environment, brands can re-establish the crucial link between advertising inventory and their customer base. This connection enables the creation of higher-quality audiences, more efficient media planning, and a reduction in ad waste.

In addition, data clean rooms with the right combination of privacy-enhancing technologies ensure that none of the data involved in a collaboration can be seen or accessed, even by the data clean room provider. Read more about how Decentriq ensures this is the case through our use of confidential computing.

Where to go from here

If we’ve convinced you to rethink cheap reach (and its cost) and you’re ready to direct budget towards meaningful connections and personalized experiences in your digital advertising, reach out to us. We’ll help you join and analyze data with partners in secure data clean rooms.