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What the Tech are seed audiences?

What the Tech are seed audiences?

Illustration by Ollie Catton / The Current

Running a targeted ad campaign is a complex process that requires combining myriad pieces of data to build audience segments and serve them ads in the right context. At the center of many of those ad campaigns is a seed audience — or a group of customers who serve as a basis to find other consumers with similar interests or behaviors who might be interested in the brand’s product.

Below is an explanation of what seed audiences are, how they work, and why they’re so valuable to marketers.

So, what are seed audiences?

As mentioned earlier and as the name implies, seed audiences provide the basis for many targeted ad campaigns — the benchmark from which different targeting strategies and target segments are derived.

Many marketers can build seed audiences by analyzing data about their customers and identifying similarities between different demographic groups. Seed audiences help a brand use what they know about their customers to expand their audience.

For example: An apparel brand collects first-party data, such as email, zip code, and items purchased, about its e-commerce customers. The apparel brand can look at this data and glean that its customers in Southern California tend to buy the brand’s T-shirts, while its Midwestern customers are more likely to buy sweatshirts. These seed audiences can inform future advertising campaigns. Going forward, the apparel brand can target consumers in Southern California with ads for its T-shirts and show off its hoodies to shoppers in the Midwest.

Advertisers who have a direct relationship with their customers can use first-party data to create a seed for modeling to find new customers with similar attributes. However, if they don’t have first-party data, they shouldn’t worry. They can potentially use quality third-party data that’s relevant to their audience to create a seed.

Remind me, what are lookalike audiences?

Lookalike audiences are the target audiences derived from seed audiences. For a deeper dive, we have an explainer for that.

In short, advertisers have a profile of the people they’d most like to reach within their campaign. Advertisers can find lookalike audiences by matching their seed with additional third-party data to create a pool of potential new customers. This lookalike audience is derived from device IDs, cookies, and — increasingly — other identifiers that overlap with the advertiser’s own audience. The idea is to build a new audience of people who behave just like (or “look like”) their existing audience.

This is a valuable way for advertisers to use their data to find new customers and extend their reach far beyond simply targeting their known audiences.

Why are seed audiences important?

Seed audiences — and their natural corollary, lookalikes — can help brands spend their advertising budgets more wisely.

In building seed audiences, brands identify meaningful demographic similarities, and behavioral and shopping patterns between their customers. Brands then use this information to identify consumers (lookalike audiences) who are more likely to buy their products and services. This can help the brand extend the incremental reach of its advertising campaigns and may help increase its return on advertising spend. Instead of targeting people who already buy the brand, the brand can advertise to potential new customers. Significantly, building a seed audience allows advertisers to refine their targeting strategy before a campaign is even live, enabling them to better evaluate not only which audiences are most relevant, but also which channels, publishers, and geographies are relevant, too.

Why is first-party data so important?

Ahead of Google’s plan to deprecate cookies from the Chrome browser, many marketers and publishers have determined the importance of first-party data. For a start, brands need to collect it directly from their customers, with their expressed permission, whereas third-party cookie tracking was, historically, conducted passively.

The fact is that first-party data is the best way to maintain a semblance of addressability — i.e., knowing who is being targeted — and that data can come from a publisher or advertiser (or both). Whether an advertiser is targeting a known user or using it to model new audiences, it still comes down to how they can scale those audiences across publishers with IDs they can potentially leverage for frequency control, retargeting, and measurement — all of which need some kind of addressability.

This has led many marketers to embrace identity solutions, such as Unified ID 2.0, as privacy-conscious, cross-platform identifiers for internet users that can do the work, and then some, of cookies. This allows marketers to continue building seed audiences and conducting targeted campaigns while respecting users’ data privacy and providing them with relevant content.

The Current is owned and operated by The Trade Desk, Inc.