The New Reality of Digital Advertising in a Cookieless World: A Conversation with Digital Element’s Rob Friedman

Ad tech industry discussions around the death of third-party cookies which track users for targeted advertising have been going on for some time now. Cookies have already been removed from Safari and Mozilla. However, the recent announcement regarding Google Chrome phasing out its support of third-party cookies over the next two years has brought us closer to the new reality of digital advertising in a cookieless world.

Here, we talk to Rob Friedman, Digital Element’s co-founder and executive vice president. For more than two decades, he’s worked closely with advertising and marketing businesses across the spectrum to ensure that they are getting the most out of their targeting solutions. He’s seen the industry evolve over those years to meet new marketplace demands―which, in turn, are driven by ever-changing consumer preferences in terms of how they want to engage with brands. When he speaks, you should listen.

What is your opinion on Google’s recent plan to phase out third-party cookies in Chrome within the next two years?

First and foremost, anything that furthers user privacy is a good thing. We started this company more than 20 years ago with an eye toward user privacy and making sure people were not scared off the internet. At that time cookies were first coming into play, and people were worried about companies spying on their browsing behaviors. We thought there had to be a better way to target. People don’t behave the same if they know they are being tracked. However, if they know there is some value exchange (i.e. special discounts, personalized information, etc.), then they are more willing to give up some information. We think tracking without providing anything of value or without affirmative consent is the wrong approach.

Plus, it’s tough to have one company, for example Google, be in control of everything. For practical reasons, you can’t make the whole ad ecosystem dependent on one company. And, in the case of a data breach, that’s a single point of failure. You also miss the whole air of transparency.

Digital Element has been at the forefront of the online ad targeting industry since 1999 with its IP Intelligence data. What role will your data have now in a world without cookies?

The removal of cookies will breathe new life into the IP address. It’s ubiquitous and instant. The IP address is necessary for routing online. Every transaction online has an IP address, whether it be a mobile device or anything else.

However, I think people’s knowledge of what IP targeting can do has not caught up with the innovations we’ve made in the past 10 years. People think it’s a rough targeting technology with only DMA-type reach. That assumption misses all the developments that we’ve made in the interim.

IP targeting has never been more relevant than it is today, and we’ve invested millions of dollars in taking in a whole bunch of data. We’ve turned our data scientists loose: slicing, dicing and tying data to IP addresses to give rich profiles of users at a very granular level, such as the sub-postal code, and in some cases ZIP-plus-4. We are certainly not down to a household level, as that is nothing that we want to do or can do. Nor, is the internet made for that type of targeting. It’s not something that can be done. But, we can get much deeper profiles of behavior once you know that type of granularity around a user. If a business traveler is at a point of interest, for example at a hotel, he or she will have different interests than a residential online user. We are helping to build context around users. We are doing what we’ve always done; it’s just that now IP targeting has never been more relevant.

In what ways has IP Intelligence evolved during the last 20 years?

We’ve always had the most accurate IP Intelligence technology out there. After years of investing very, very heavily in IP targeting, the gap between data providers has never been bigger. We are light years ahead of the competition. We have always taken a leadership role, but never has it been more important than it is now―especially considering all of the third-party data that’s available. Remember, just getting third-party data isn’t enough. You have to have the ability to vet that data. Our long-term experience in the industry enables us to validate this data better than anybody. Digital Element has invested in data vetting and onboarding as well as controlled testing that proves that we are exponentially better than competitors.

This isn’t your grandfather’s IP targeting. IP addresses are going to skyrocket in value for ad targeting now. It’s a proven technology. And, considering all of the privacy discussions in the market today, we’re so far ahead of the curve because our data is not invasive. We’ve never tracked anybody with cookies. This has been in our DNA ever since we started Digital Element. It’s fun to be the cool kids again. Not to mention, we’ve taken the explosion of mobile data and layered that on top of our IP framework.

Did the mobile explosion challenge your adherence to IP targeting?

We always had faith that IP targeting was important. It goes back to our initial mission to not snoop on online users, but help them find content more readily without being creepy. We’re the “non-creepy” technology. All along the way, we stayed in our lane and invested money there, knowing the importance of what we were doing would eventually lead us to this point. Everyone chased personal information about online users, but we work in a place where you can’t even do that. It’s not a concept where we track an IP address to a person. IP addresses don’t work that way. They are routed in a network way, not a device way. We’ve been able to take that to the next level.

Therefore, our singular focus on IP targeting helped us become better, and we challenged ourselves to get getter. Now our technology is even more important because companies are using it for mobile targeting. Businesses want the most granular data around IP addresses so it matches better with mobile. You should have the same level of targeting with respect to all your campaigns―there are not two sides of the house―mobile and everything else. It should be a cohesive strategy regardless of the device.

In most instances, in order for marketers to take advantage of location-based services (LBS) to deliver targeted ads, promotions and content, mobile users must opt-in. But many users refuse, citing reasons such as privacy or battery-life concerns. And, once they turn LBS services off, it’s often hard to get them to turn them back on. Mobile users will opt in to LBS when they feel they will get something of value in return, but blindly asking someone to opt in does not work. Here we are back to that value exchange.

With IP-based geolocation technology, marketers can fill the mobile gap by allowing companies to target mobile users by location and connection type as they increasingly take advantage of the ever-growing population of rate- and speed-friendly Wi-Fi networks. By using IP data in a first-layer targeting approach, marketers can give mobile users something of relevance (i.e. a discount at a nearby coffee shop), and thereby incent them to opt in to get even more relevant mobile content as a second layer. Targeting mobile users should be a layered approach. This is how we bridge that gap in the mobile world.

Has having more granular IP data available opened up new markets for Digital Element?

Absolutely! For example, advertising via IP address is great for national or regional companies, but for Mom-and-Pop shops―who need to target by sub-ZIP code or mobile―our hyperlocal data opens up new opportunities for these companies who can advertise on small networks using our data. They are now more competitive than they ever were. Any local business can fine tune their traffic and get a better return on their ad spend. Our data also helps with attribution and gives advertisers a new layer of information with which to monitor performance and change campaigns on the fly if need be. Because of the improvements we’ve made, other markets have opened up where local targeting makes sense, especially in today’s new privacy-sensitive and identity-driven landscape.

Want to hear more about the demise of cookies? Readers can connect with Rob on LinkedIn.

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