April 30, 2024

The Evolution of Identity - Part 2: The competitive advantage of non-addressable environments

The industry is forcing change, and preserving addressability with privacy-centric technologies - when possible - is critical for advertisers. However, planning a media strategy for 2025 that focuses on solutions for addressable audiences is only half the battle - literally. In the coming months, the majority of the supply will be non-addressable, and, similarly, the majority of identity solutions available today won’t solve for that. This article spotlights why advertisers need to invest in solutions for digital environments where users can't be identified and the emergence of different solutions.

Kurt Anderson

Sr. Manager, DSP Strategy at Yahoo

In Part 1 of the Evolution of Identity blog post series, we discussed the importance of solutions for addressable environments and the five attributes you should seek from your identity partner. We also highlighted the importance of advertisers incorporating a holistic approach with various solutions, including those for non-addressable environments where the user can’t be identified on a 1:1 basis. (And no, we’re not talking about fingerprinting!)

This type of inventory is on the rise. Early in 2025, 70%1 of digital inventory will be non-addressable. This means that in these digital environments, advertisers can’t apply ID solutions due to a lack of user consent or technology changes. If advertisers don’t properly incorporate this type of inventory in their digital strategy, they’ll be missing out—potentially on 70% of their prospective customers!

It's crucial for advertisers to adopt innovative solutions that go beyond the “traditional” IDs and test them alongside their current strategies today. By taking proactive steps now, advertisers can stay ahead of the curve and ensure their digital strategies remain effective through scale and performance in the face of evolving digital environments.

Non-addressable supply can offer a competitive advantage to advertisers

There is a massive opportunity for advertisers to embrace the rising trend of non-addressable inventory and gain a competitive advantage in the market. The benefit for advertisers to lean into non-addressable audiences in their media strategy outweighs the fear of the unknown or the challenge of learning how to adapt to buying more of this inventory. Non-addressable supply offers additional audience reach, an opportunity for lower eCPMs, and access to the same quality inventory as addressable in a market that’s currently less competitive. 

The time is now for advertisers to plan ahead and start testing and learning. Those who do so will gain an advantage and be better prepared for the growth of non-addressable environments. Think back to other seismic shifts in the history of digital advertising - from the first banner to the advent of social media ads to the shift to streaming and Connected TV buying. During these moments, some companies capitalized on the new opportunities and adopted innovative strategies despite the new territory and came out on top. This is one of those moments. 

Four emerging methodologies for non-addressable environments

Luckily, there are new solutions rooted in experience that can help advertisers reach their non-addressable audience. Contextual targeting, for example, is seeing a renaissance. But, we often hear from our advertisers that they still want to maintain audience-first targeting approaches.

Buyers are relying more on publishers' first-party data for audience targeting, using either deals or Seller Defined Audiences to execute these buys. This approach puts the power and control into the publisher's hands. It enables them to create audience segments from their own valuable first-party data, based on the user interaction on their properties, without needing to associate them with a universal ID or reveal the identity of the user to the advertiser. It's promising for publishers with rich data, but it doesn’t solve for measurement.

Browsers and platform solutions offer additional options. The much-anticipated Privacy Sandbox has contextual components with Topics, but Protected Audiences maintains the audience-driven approach that powers acquisition strategies. Deprecation deadlines and CMA approval aside, the sheer market share of Chrome means thoroughly testing Privacy Sandbox has to be a core focus for marketers over the remainder of the year. 

Last, but certainly not least, AI- and panel-based solutions like Next-Gen Solutions by Yahoo bring a fresh air of innovation for advertisers. These solutions rely on sophisticated algorithms that project granular learnings on unknown users and infer audience characteristics. As with any AI-based technology, the quality of data input is crucial to the accuracy and reliability of the outcome. Therefore, such solutions require quality, trusted, and robust data to infer the highest accuracy audience characteristics.

We are experiencing the last months of life for third-party cookies. When the bubble of a solely addressable ecosystem bursts, advertisers will already need a holistic and integrated approach. A media strategy consisting of a combination of identity solutions, including non-addressable, is critical for that success.

At Yahoo we offer an integrated approach to identity, Yahoo Identity Solutions, that takes into account both addressable and non-addressable inventory and you can test today.

1Yahoo internal data, 2024


About Kurt Anderson

Kurt leads Platform Strategy for Identity and Measurement at Yahoo. He takes a client-driven approach to build the ecosystem needed for clients to acquire customers, target their consumers and measure their programmatic investment. He has over 15 years of experience in the programmatic space and enjoys making complex technology digestible and usable for all marketers. He’s a firm believer the Bills will win the SuperBowl in his lifetime.

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