New global data protection regulation including Europe’s General Data Protection Regulation (GDPR) has led to many marketers not knowing quite which way to turn.  Lack of transparency, third party cookies and the hostility of various browsers has brought forth comments from some in the advertising industry that we may be at a fork in the road.

Forrester analyst, Susan Bidel, was reported as saying recently, “The pendulum has swung too far” toward programmatic advertising directed at users’ profiles using third-party data. “If you listen to [Proctor and Gamble] and Unilever,” she said, “they are all saying that digital marketing as practiced in the last five or six years has not borne out.”

It’s now “coming back to the middle,” she said, where marketers put a greater emphasis on two approaches that harken back to the old days, when marketers looked for customers similar to their own, and when they advertised on places where those kinds of people were likely to gather.

In modern terms: “lookalike” targeting that finds customers whose attributes match the attributes of existing customer lists, and targeting based on surrounding context, such as travel ads on car sites or beauty ads in lifestyle apps.

One of the many reasons why this is a decision point for digital ads, she said, is that “global marketers will use GDPR as a [massive] A/B test” to see if the fall-off in targeting by user data — expected because of the users who will not grant consent for access to their data — will actually result in a falloff of results.

“Your strongest chance of success is to target your ads to people you have a strong belief would be interested,” she added, because they are lookalikes with attributes like your customers or because “they are visiting environments that complement your message.”

“The world is getting bifurcated” toward two kinds of targeting, she said: users who are engaged with your brand in some way, as customers or visitors, and contextual marketing, where ad buys are based on the surrounding content, as it was in the old days of “Mad Men.”

Tasso Argyros ,CEO of customer data platform (CDP) ActionIQ, which focuses on first-party data,  said “Third-party data is becoming dead,” and he pointed to the difficulty in measuring the effectiveness of third-party data-driven targeting, in large part because of the lack of transparency about the data itself.

The quality of the targeting can differ dramatically depending on the third-party data vendor or the batch employed, he said, such that “the only way to know [how well it works] is to shut it down” and see if your response rates go down, similar to the GDPR experiment.

A key reason he likes lookalike advertising is “that a minimal amount of data changes hands.”

The key task for marketers, then, becomes how to enlarge the opportunity of engagement, so that passing users get closer and closer to becoming first-party. In that perspective, making available a useful mobile app is one technique, just as casual visitors to Starbucks become more engaged once they start ordering their latte through their app.