A Quick Guide to Seller Defined Audiences

With Seller-Defined Audiences increasingly becoming a topic of discussion across the industry, here’s what you need to know about this new audience classification and targeting solution and how it fits within the larger addressability landscape.

Seller-Defined Audiences, commonly abbreviated as SDA, is an addressability specification brought forward by yet another effort to replace third-party cookies with a privacy-friendly alternative. Collaboratively designed to drive the adoption of publisher first-party data, SDA is a cohort-based targeting approach that leverages well-established advertising standards to allow for scalable audience targeting without compromising data privacy and security. 

Instead of sharing sensitive user-specific identifiers and personally-identifiable information with advertisers, publishers can leverage SDA to organize their anonymized first-party data into standardized audience cohorts based on user interactions and other data points gathered on owned sites, apps, and platforms. This way, SDA allows publishers, as well as DMPs and data providers, to easily assemble and curate their first-party data while maintaining full control over it. 

How does SDA work?

SDA empowers publishers to implement a thoughtfully coordinated first-party data strategy to scale and successfully curate their audience data. Omitting technical details, the process of operating SDA can be summarized in the following four steps: 

1. Audience segmentation

As a first step, publishers – with or without the help of their DMP – must map their first-party data into standardized demographic, purchase intent, and interest audience segments following the IAB Tech Lab’s Audience Taxonomy 1.1

The IAB taxonomy includes 1,600+ tiered segments that provide a common naming convention and taxonomy allowing normalization, uniformity, and comparability across SDA from different providers. In addition to audience signaling, SDA can also support contextual and content signaling, but both use cases have yet to be standardized for the industry.

2. Documenting SDA metadata

Publishers include the segment ID and taxonomy ID in the ad call using their ad server or the header bidding wrapper following IAB’s Data Transparency Standard (DTS) or leveraging a prebid RTD (real-time data) module created by a data provider. 

3. SDA activation

Publishers can activate SDA on the SSP level for buying on both open auction and PMP. In the first case, the SSP must relay the SDA metadata in the bid request; in the second, SDA can enrich direct deals and cross-publisher auction packages. 

4. DSP bidding

Upon receiving the bid request, the DSP will be able to read the included SDA metadata, segment, and taxonomy IDs and decide whether to bid on the ad call or bid on an SDA-enabled Deal ID. 

What's so special about SDA and why should publishers care?

Cohort-based targeting is neither original nor recent. Nevertheless, SDA brings exciting privacy-first opportunities for publishers to monetize one of their most valuable resources. Addressing common bottlenecks, such as data scalability and operational overheads, SDA empowers publishers to market their data to multiple buyers across all major advertising environments – including browsers, apps, and OTT/CTV – without relying on third-party cookies and IDs nor risk data leakage along the way.

How can advertisers benefit from SDA?

While SDA is seller-operated technology, its success and future lie with marketers waiting to put the new addressability solution to the test. There’s a lot for them to expect from SDA – starting with a standardized taxonomy offering reach across various providers and ending with flexible activation. SDA can help advertisers scale access to publisher first-party data without contacting each and every publisher to create one-to-one deals. Instead, they can leverage access to pre-packaged and anonymized user data through auction packages or in Open Auction. 

The designated transparency labels ensure providers have necessary insights about SDA: outlining audience providers, underlying sources, how they were compiled, when they were last updated, and more. 

In addition to more evident benefits, buyers can further use rich DTS metadata to train DSP machine learning systems in order to identify the top-performing cohorts and optimize towards better marketing outcomes. DSPs and other interested ad tech vendors can query audience metadata from the IAB Transparency Center via a UI or API for an annual fee to the IAB Tech Lab. 

What role does the adtech platform play?

Adtech platforms also have a major role to play in operating and scaling SDA. As mentioned earlier, SSPs are responsible for transmitting SDA in the bid request. DSPs should be trained to recognize SDA metadata to allow the selling and buying of data-enriched inventory. DMPs will greatly help publishers in segmenting and mapping user data to standardized cohorts. And, the rapidly evolving data clean room solutions will further empower data collaboration between providers bringing cross-publisher SDAs to market. 

Most importantly, the curation platforms may prove indispensable in streamlining SDA adoption, offering publishers higher levels of control and flexibility over the user of their data and ensuring it’s sufficiently valued. Curation and advanced deal management will lower the entry barriers for publishers who aren’t yet ready to share segments transparently on the open market, but want to access large-scale demand for their SDA. 

SDA creation and activation with Equativ

SDA is an exciting new addition to addressability solutions. When used together, they can significantly ease the industry’s transition to the soon-to-be cookieless world. While we encourage you to research the best way to use SDA, we recommend combining it with other alternative cookieless approaches – extended/alternative IDs, contextual targeting, direct first-party data activation – to diversify your addressability strategy and maximize ROI. 

At Equativ, the first SDA developments are already in progress for client-side header bidding publishers. Starting in 2023, we plan first tests with publishers interested in packaging their first-party data into SDAs and enabling it for deal ID and auction package activation via our dedicated curation platform, Equativ Buyer Connect. Gradually, SDA support will be extended to ad server publishers, offering more scale to advertisers through auction packages or Open Auction. 

Interested in learning more?

We can help you implement an SDA strategy that's right for you.

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