The Hub

CEO Nick Pinks on overcoming signal-loss with Covatic's innovation

Nick Pinks, CEO, Covatic

In the fast-paced world of advertising, new challenges are always around the corner for industry players to navigate. One current conundrum is how to reach diverse audiences, share relevant and engaging ads, and then truly measure the success of these campaigns, with the ever-increasing signal loss from traditional targeting methods.

In this Q&A, CEO Nick Pinks explains what the current challenges are for both media owners and marketers, and how Covatic’s technology is helping them to cut through 2024’s complex media landscape.

What does the current advertising landscape look like for media owners and marketers?

Media owners, publishers, and broadcasters are currently in a position where they have access to information about a large section of their audience, but still know nothing about a smaller portion of those users – around 20%. However, with cookie deprecation and further regulatory changes on the horizon, this is all about to change.

Meanwhile, marketers are faced with a whole host of new ways to reach audiences, because consumption habits have changed. At any time, a consumer could be watching a streaming service on CTV, listening to digital radio or a podcast via smart speaker, or watching social video on their mobile phone.

And yet despite all these channels, the methods of finding an audience, delivering an ad, and then measuring the success of a campaign are often still based on those used for older formats such as linear TV or online display ads. When faced with a new format, or tougher restrictions – such as the current drive towards greater consumer privacy online – the tendency is to add another layer of tech, creating a very complex, and costly, ecosystem.

Ultimately, there are three fundamental things every ad campaign needs to do well – targeting, measurement and attribution. You try to target the right person, measure the impact of your ad on that audience, and then attribute any actions they may have taken after seeing the ad. The main function of tech platforms is to help with a chunk of that journey, but it can be tough to join up the dots and get a complete picture.

Why is this?

It's hard to ignore the impact of privacy legislation such as the GDPR, and increased browser restrictions, such as Google’s phasing out of third-party cookies. But at the same time, the systems in place to drive targeting, measurement, and attribution can be complicated and convoluted. It's not great architecture.

In so many other areas of marketing – and life – we talk about using less and being more effective with what we have; but in this instance, the industry response has been to add another solution or work-around. If you’re charging $5 CPM, but you're spending $6 on your tech, the margins just aren't there.

So taking the first piece of that puzzle – targeting – what can media companies do to help marketers reach relevant audiences?

As I have already mentioned, media companies have some gaps when it comes to knowledge of their audience. This can be through audiences who are unmatched, unidentifiable, not signed into an app or website, or who have not consented to their data being shared. And if we estimate this to be around 20% of users, then this is quite a large amount of revenue to be missing out on.

Covatic’s on-device technology can help them find these missing audiences, thanks to its 100% addressability, regardless of platform or environment, achieving incremental revenue by broadening reach. It can also help them be more effective and deepen their knowledge of groups they do know something about. And the better they know a customer or prospect, the more value they can attach to their inventory.

Targeting is often very generalised; with advertisers only able to reach people based on their age or gender. At the same time, many of the identity-based solutions aiming to replace the cookie are incredibly complex and therefore expensive. Achieving 60% accuracy would be considered a success, when in reality, they are barely scratching the surface, and this figure is reducing every single month.

Covatic’s on-device technology is unaffected by some of the drawbacks that other solutions face. For example, unlike email-based ID targeting or first-party ID-based targeting, Covatic’s solutions have the capability to target 100% of users. It is also able to map consumer preferences over time and supports granular segmentation using non-sensitive data, unlike contextual targeting solutions. Finally, on-device technology has the ability to target users from their very first page view while not exposing any personal data, unlike clean room-based targeting which relies on personal IDs and needs to “learn” about a user before it can be used for effective targeting.

At Covatic, we’ve deployed our algorithm across a number of third-party sites, and have seen this inventory achieve remarkable commercial success for our clients. We built our targeting solution with data-privacy in mind from the start, so information can flow through the entire tech ecosystem without using an identifier and without having to share personal data.

All processing takes place on the user device thanks to our SDK, not only negating the need for cookies, IDs, or tracking, but also cutting out the need for data to be sent to a remote server for processing. Individuals are placed in cohorts, not only protecting individual user privacy, but giving advertisers greater access to a broader range of audiences.

Our solution is also simple to deploy and activate – making it very cost effective. And if an agency wants to target an advert at a male or a female, or a certain age group, or a certain geographic area, we've got that data for 100% of the audience.

So once the relevant audience has been found – how can media owners ensure measurement is up to scratch?

The variation in measurement across different channels is really challenging. While online environments offer a range of data points, TV is still measured largely using panel data. In the modern age, simply extrapolating viewing habits in this way doesn’t reflect the nuances of how viewers watch TV.

Similarly, many linear and streaming TV measurement solutions only track audience habits as a single household. But in reality, you can’t make assumptions on viewing habits based on who pays the bill, or who is logged into a streaming app. When I was growing up, my viewing habits were considerably different to my parents' viewing habits, and with ever expanding options for today’s young people this gap is likely to be even wider. For marketers trying to reach viewers on linear and CTV, it’s really important to actually know who's watching.

Covatic’s on-device technology is able to give a more accurate view of a household – what people are watching, listening to, and reading. Device-level data, as well as sensor data, can also be measured to build a fuller, more accurate picture of audiences and how they are interacting with brands.

How do you then join up the dots when it comes to attribution?

The final part of the advertising Holy Grail; attribution brings together targeting and measurement to link an ad to an action. We have been working with our clients on something we call 'audience linking', which helps solve the problem of unidentified audiences while also providing a better view of users for both marketers and media owners. Essentially, the better a business knows its audience, the more valuable it is for all involved.

Ultimately, the industry is throwing down the gauntlet this year to be more privacy secure. Media owners and marketers need to focus on streamlining their approach and choosing solutions that actually deliver results if they are to seriously navigate this new era of data privacy while still driving results.

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