Data has become the name of the game in mobile ad targeting. As publishers and advertisers begin to gather more data about users they are able to target them at a more granular level. The demographic data being logged and analyzed can get down to a very personal level such as household income, age, gender, marital status, etc. This can lead to very specific targeting such as single females 30-40 years of age in the Dallas area. With this level of data advertisers are able to target very specific consumers within a very narrow geographic area.

Besides demographic data, data is also being collected on the performance of users tied to the demo data. Data such as VTR (view through rate), CTR (click through rate) and installs per user. This type of tracking allows advertisers to be very picky and specific about whom they want to show ads to and which type of ads. If a user has installed apps in the past, an advertiser will be more inclined to show them a similar type of ad in the future, whereas a user who has not clicked on ads or installed an app in the past may not be shown any ads.

This rush to gather, store and analyze data has pushed the mobile industry into a frontier where data is now one the largest driving forces behind higher CPMs and fill rates. Sometimes though this granular targeting can have an adverse side affect, particularly in respect to the audience size. The more granular targeted you go, the less of an audience you have. Your user pool begins to shrink and sometimes it can be hard to find enough users that fit your user profile.

This is something that was recently referenced in the IAB Mobile Programmatic Playbook.

…it’s important for buyers and sellers to understand that overlaying such audience data over other attributes can have a limiting impact on the overall size of addressable audience. Thus, advertisers must always consider the need to balance targeting efficacy and scale efficiency.

Gathering the data is one thing but utilizing it is another. There needs to be a balance.

A more granular audience fits well with advertisers looking for specific actions such as installing an app, filling out a survey or ads for a local store in a particular city. If the campaign is brand based and the goal is to build brand awareness at a national level than the ability to target at a more granular is less critical. Being able to target users who have performed in the past such as clicking on ads is something advertisers would like, but once you start targeting and measuring user activity you begin to move from a brand based campaign to a performance based one.

Regardless of how you feel about the privacy implications of the rush to gather more user data, it is here to stay and will continue to forge ahead full speed. Publishers need to be aware of the value of tracking and storing this first party user data and how it can positively affect the CPMs that are paid for their inventory. Conversely advertisers need to be prepared to pay a higher price for more granular targeting, and be aware that as they target at a more localized level it will decrease the size of the audience they can advertise to.