SAP Steps into the Cookie-Free Future with AI-Based Contextual Targeting

Reach versus targeting; which will give you better results? It’s one of the oldest problems in advertising – and for many businesses, it’s about to get a whole lot more pressing.

The disappearance of the third-party cookie in early 2023 will make targeting online advertising much more difficult. For mass-market companies that focus on reach, this doesn’t have to be a big deal. But for those selling to a niche audience, things could be quite different. German multinational enterprise software company SAP is one such company.

“With the threat of a cookie-free future, the challenge of targeting very small but highly specialized audiences will become even more difficult,” said Moritz Fisecker, EMEA integrated media specialist at SAP. “We have to find solutions in advance.”

That’s not all that’s at stake for SAP. The company sees a chance to establish a competitive advantage in its industry by preparing for the end of the third-party cookie long before it actually happens. Additionally, he was looking for ways to ensure his digital advertising was completely safe and secure for the brand.

Finally, the move is important for how the SAP brand is perceived. As Timo Steyer, Deputy Director of Digital Strategy at OMD Germany, points out, tech companies are rarely the first to advertise.

“SAP is an enterprise software company, not Coca-Cola, so together we wanted to offer this pioneering approach to demonstrate that we ourselves are really ahead of the game,” he says. “Anything innovative is worth trying for us. We want to be ahead of all the other big companies in the industry and we want to have overcome all third-party cookie hurdles by next year. »

Contextual targeting – it’s nothing personal

There are three main types of solutions that are jostling to replace the third-party cookie: first-party data, and anonymous identifiers based on this data; interest groups, such as topics recently announced by Google; and contextual targeting. Of the three, the latter poses the least risk to consumer privacy since it does not use any personal data.

Contextual advertising is the oldest form of targeting known to the media. Basically, it’s just about placing ads next to relevant editorial content; if you’re a car manufacturer, you advertise on automotive pages. The big difference in the modern version is the sophistication of the ad and content pairing. Until recently, online contextual targeting relied on keyword matching.

Now, artificial intelligence (AI) is used to analyze the meaning and sentiment of content on a web page, and then this analysis is used to select which advertisement to serve. In the most innovative solutions, this analysis includes video and audio as well as text.

The result is greater relevance and brand appropriateness – not only ensuring that ads aren’t shown next to the wrong content, but also that they’re shown next to the right content.

“Brand fit is about improving the quality of the advertising environment,” says Steyer. “GumGum delivers this through AI analysis of page semantics, as well as video analytics, to reduce ad clutter and increase relevance.”

New kid on the block

SAP had previously worked with contextual intelligence company GumGum, while Fisecker and Steyer were also familiar with JustPremium, the programmatic rich media platform acquired by GumGum in August 2021. This is Simon Tritsch, Chief Commercial Officer for DACH at JustPremium, who suggested SAP test contextual targeting. .

This approach came at the same time that SAP was rethinking its approach to media, as Fisecker explains: “SAP recently celebrated its 50th anniversary, and we decided that we wanted to behave more like the new kid on the block.”

The JustPremium suggestion arrived in March. Thanks to SAP’s new approach, the project was approved within a few weeks.

“SAP is a big ship, so this kind of quick turnaround wouldn’t have been possible last year,” Steyer says.

The best of both worlds: scale and precision

The product chosen for the trial was an SAP solution specifically designed for SMEs. The primary decision maker in the purchasing process for these systems is the CIO, which means that the target audience for advertising is restricted.

“They also have a much longer customer journey to undertake than an FMCG buyer,” says Fisecker. “Therefore, they need to be accompanied by advertising over a much longer period and across multiple channels. That’s why it’s so important for us to define new ways to locate them.

“GumGum’s new AI targeting means we can combine the best of both worlds; the maximum audience size with the precise targeting we need,” says Steyer. “Does this hybrid approach mean that we will get the necessary awareness for both SAP and the product?”

To find out, the trial will be measured using traditional brand metrics, before and after the campaign.

“We will also measure the impact on the pipeline and sales,” Steyer says. “We want to see if an awareness campaign can also boost sales. That’s why it’s all about relevance, because more relevant advertising will drive sales. »

Better brand fit will also lead to increased relevance, says Steyer: “If interactions with content increase, we’ll know we’re doing it right.”

Ultimately, Fisecker says, the benefits of the project are two-fold.

“The earlier we start, the more experience we gain. We want to create a benchmark for future trials,” he says. “But then, if this experiment works, our new agile media approach means we can commit additional resources as well.”

About Ricardo Schulte

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