Can Mobile Targeting Ever be as Accurate as Cookies on the Desktop?
Mobile ad startup Tapad announced on Thursday it closed a $6.5 million series B funding round led by venture capital fund Firsthand Technology. By analyzing hundreds of data points including device type, browser type and content source, Tapad says that it can target consumers across devices with 70% to 75% accuracy. In turn, the company has attracted high-profile investors and 75 customers in Fortune 500.
But Tapad is just one of numerous cross-device tracking companies to capture the attention of Madison Avenue and Silicon Alley with such claims. While mobile device adoption has been a boon to Apple and Samsung, it has threatened to make cookies--the lifeblood of digital advertising--less relevant. As the cookie slowly crumbles, advertisers have heralded new technologies that will one day replace them.
"I don't think cookies on the desktop are going away." Nihal Mehta, CEO and co-founder of social intent targeting startup LocalResponse, said. "They're always going to exist." That said, his company is among an emerging group focused on how to track people's media behavior across devices that goes beyond basic cookie tracking.
Cookies are functionally irrelevant on mobile devices, but there's no universal tracking solution for them (yet). Apple used to allow app developers to identify users based upon the Universal Device Identifiers (UDID), a unique series of numbers and letters placed in every iOS device. Then it then decided it would only allow tracking via IFAs (Identifiers For Advertising), functionally the same as a UDID, only it's a piece of software rather than an identifier directly connected to the physical device.
Google, meanwhile, has an identifier all its own, the Android ID. And all web-enabled devices have a media access control address that can be tracked by a Wi-Fi receiver, but experts agree that this technology is likely to frighten consumers. (That hasn't stopped Nomi, which recently raised $3 million in seed funding, from doing that, though.)
Factor in other platforms and device makers such as BlackBerry and Windows and it's easy to see why the imprecise science of mobile tracking and measurement is impeding the flow of marketers' dollars.
The ad tech entrepreneurs developing cross-device tracking believe their solutions will eventually be more effective than the current cookie-based solution is for online tracking.
"The future [of mobile] is that we'll know which exact dollars are being effective," Mr. Mehta said.
LocalResponse, for instance, connects cookies to social media accounts (Twitter, mostly), thus allowing brands to target consumers based upon what they share. If a user tweets that she'll soon be filing her taxes from her Galaxy S III, LocalResponse can serve her a TurboTax ad next time sits down to peruse the New York Times on her iPad.
There are only 200 million active Twitter users worldwide, however, a razor thin slice of the Internet population. And of Twitter's 56.7 million U.S. users, only 53.6% access Twitter from mobile devices, according to comScore.
Companies like Tapad hope to replace cookies by aggregating information from the billions of ad requests sent through ad exchanges and analyzing the data across hundreds of categories including device ID, IP address, language settings and time of day.
But even with massive amounts of data, these companies are far from perfect at tracking users across devices. Drawbridge, which recently raised $14 million in a recent funding round, can identify users across various devices at 60% to 70% accuracy. Competitor AdTruth says its cross-device tracking accuracy is between 80% to 85%.
As indefinite as cross-device tracking may be, the only other choice for marketers would be to neglect these developing technologies.
"People have already invested quite a lot in the tools and techniques that use this kind of data to function, so this is better than starting over," Andrew Frank, Gartner's VP-research, said.