Yahoo

Shrinking addressable supply a ‘challenge’ for CTV, warns Yahoo’s ad data manager

Yahoo’s vice president of ad data products has issued a stern warning that 75% of digital ad inventory will be unaddressable by 2024 in the United States.

But what does this mean for CTV? According to Gio Gardelli: “It will now become much more difficult to track web conversions for campaigns.” Speaking at the IAB’s Audience Connect summit, Gio Gardelli called unaddressable sourcing “the big elephant in the room” and said, “we can’t ignore this anymore.”

Current privacy regulations mean that 30% of audiences are non-addressable, but Yahoo has predicted that with Google’s cookie deprivation and consent regulations entering five US states, the percentage will increase to 75% by 2024.

“The impact will be felt in optimizing web or in-app conversions to CTV, which will make it harder to measure the effectiveness of CTV purchases,” Gardelli said.

Known audience signals collected on the web and in apps will also decline, making this type of audience targeting more difficult, he explained. “The effect may mean that first-party, consented and connected data as well as CTV-specific and audience data (such as ACR or set-top box) will become more coveted,” Gardelli said.

In the future, the majority of supply will not be addressable. “We’ll have to find whole new ways to exchange media,” Gardelli said.

The challenge for the industry is that as addressable supply decreases, but the same number of advertisers attempt to target a smaller pool of supply, competition increases and so do budgets.

“For advertisers focused on preserving addressability, there will be a big challenge in preserving ROI going forward,” Gardelli said.

But the opposite trend occurs with non-addressable supply, he explained. In fact, non-addressable supply is increasing, and since brands are not willing to pay for inventory without an ID, competition is low and prices are 30-40% lower.

“We believe the next big advantage is unaddressable,” Gardelli said.

Brands have tested solutions to access these users without an ID. Gardelli has seen a “resurgence” in panel-based solutions. “Ingesting learnings from known users and projecting them to unknown audiences can help advertisers achieve effective targeting and measurement on CTV,” Gardelli said.

Contextual advertising is another method that brands apply. Gardelli said: “Evolving signals and contextual tools will also allow brands to control adjacency of content based on suitability and sentiment – an attractive alternative to audience targeting when it is not available. .”

Then there are Vendor Defined Audiences, which give publishers the responsibility to segment audiences. Even though most of the supply will become unaddressable in the future, Gardelli said protecting the addressable audience that remains is paramount. Optimistic about the potential to do so, Gardelli advised investing in first-party data, ensuring there is a clear exchange of value for the consumer and “taking back control of the privacy narrative by being very transparent”.

He also suggested increasing user registration by encouraging the public to continue logging in and registering for other services and products. “Subscriptions are also extremely important,” he added.

“Now is a good time to test and learn how to preserve addressability for the future,” Gardelli concluded.