What is Audience Extension?

Audience extension is a digital marketing strategy that helps publishers turn their traffic into meaningful and relevant segments for advertisers. In this way users can be reached not only on the publisher’s site, but all over the web.

Publishes, such as news websites or blogs have a ton of data on what actions users take on their sites. This includes what pages they clicked on, what articles they read, the videos they watched, etc. This information is valuable to advertisers because it can help them serve ads to similar audiences across different websites and platforms. It helps them reach people who have comparable interests or behaviors across the internet and are very likely to buy their product or service.

How Does Audience Extension Work?

The publisher’s Data Management Platform (DMP) plays a central role in the entire process, since it creates a cookie with a unique ID every time a new visitor lands on their website. Then, this cookie is synced with supply-side platforms (SSPs) and demand-side platforms (DSPs), so whenever that same user browses through different sites, they could be identified.

DMPs store data that not only comes from first-party sources (a company’s website, app or a CRM), but also from second-party data like social media profiles, customer feedback and surveys. Once this data is collected, the DMP segments it into different groups based on the common characteristics of the users - demographics, behavior, purchasing habits, etc. This system also helps publishers comply with privacy regulations on how data is collected, stored and processed – GDPR, CCPA and others.

SSPs, on the other hand, help publishers speed up the processes of selling, managing and optimizing their available ad space or inventory. This automation makes the process of selling their ad space much faster and more efficient, helping publishers maximize their revenue potential. Most SSPs support real-time bidding (RTB), which is similar to an auction where ad inventory is sold in-real time to the highest bidder. For the advertisers this technology allows them to fine-tune their targeting and focus on the inventory most likely to bring them the highest profits. Publishers can monitor who is buying the inventory, figure out their best placements and charge a higher price.

Additionally, DSPs assist advertisers in buying ad space from websites, mobile apps or video content through an automated bidding process. Similar to SSPs, DSPs support real-time bidding, so advertisers can make sure their ads are served to the right person at the right time. They also support advanced targeting based on interests, location, demographics or behavior and rely on complex algorithms to optimize advertisers’ bidding strategies.

Benefits for Publishers

• Revenue Increase: Publishers can monetize their audience beyond their platforms, meaning they can sell advertising targeted at their visitors to other sites, blogs or apps.
• Wider Market Reach: Through audience extension publishers can reach their users when they are browsing different websites thanks to the unique cookie ID. This expanded reach is very appealing to advertisers, leading to increased deal sizes for publishers.
• Deep Insights: Publishers can analyze how their users interact on various websites and platforms. For example, what pages do they frequently visit, the videos they watched, the average duration of a user session, etc. Publishers can use this data to optimize their ad spaces to improve user engagement and to strengthen their value proposition to advertisers.
• Maximizing Inventory Potential: Audience extension helps publishers manage their unsold inventory more effectively by reaching their audience on other websites and platforms, so more ad slots are utilized.
• Improved Ad Relevance: Gathering and analyzing audience extension data helps publishers identify the most relevant ads which match users’ needs and interests. This improved relevance will ultimately lead to a higher ROI for advertisers.

Benefits for Advertisers

• Increased Engagement and Conversion Rates: Users who find the ads relevant are much more likely to engage with them by clicking, watching a video or spending more time on landing pages and banners. This has a positive impact on the ad performance, since the conversion rates will go up.
• Reduced Ad Waste: By targeting specific audience segments with the right messaging, formats and ad creatives at the right time, advertisers reduce the odds of displaying their ads to uninterested users. This leads to more effective budget allocation and spending marketing dollars on people which matter the most.
• Reduced Overexposure: By leveraging audience insights effectively, advertisers can avoid exposing the user to the same ad over and over again, leading to the so called ad fatigue phenomenon. They can use frequency capping, meaning the user will not see the ad more than a predefined number of ad impressions.
• Exclusive Access: Some premium inventories are not available through standard ad exchanges and audience extension can provide advertisers with such access. These are inventories with a loyal customer base, high traffic and valuable content. Users perceive the ads as more credible if they are displayed on those high-authority websites.
• Data-Driven Decision Making: Advertisers can easily eliminate the guess work of what is successful and what needs to be improved. Real-time performance metrics, such as click-through rates, conversion rates, return on ad spend (ROAS) or impression rate help them identify underperforming campaigns and double down on profitable ones.

The Future of Audience Extension

There is a growing concern over data privacy and regulations such as GDPR and CCPA signal the industry will take a more privacy-focused approach. Advertisers and publishers will need to find a balance between detailed targeting and respecting user privacy.

The core benefit of audience extension lies in its data segmentation and analysis. Artificial Intelligence (AI) and machine learning algorithms are getting better every year in analyzing large data sets, identifying user patterns and insights and offering predictive analysis. It is interesting to observe whether audience segmentation and AI can co-exist together or the latter will monopolize the ad industry. We should not underestimate the power of Blockchain, since this technology can potentially verify the authenticity of ad placements and strengthen the security of data.

On top of that, integrating online and offline data seems like a logical evolution of audience extension. For example, analyzing the performance of print materials like magazines, brochures, flyers and comparing it to the online campaigns gives the advertiser a holistic view on their marketing initiatives.

The Role of Smart Ads

Our Smart Ads product helps bridge the gap between the physical and the online advertising. We address the challenges faced by local advertisers who often find digital marketing complex and are dissatisfied with low engagement rates on the traditional platforms like Facebook and Meta. We help transform any print advertising material or social media posts into high converting landing pages and banners. Read more about our best selling advertising product Smart Ads by following this link.

‍