A new study from data-validation firm Truthset reveals that the ad industry’s reliance on IP addresses for targeting is fundamentally broken, with accuracy rates so low that for every dollar spent, only three cents worth of ads reach the intended audience. The research, commissioned by industry groups CIMM and Go Addressable, calls into question the billions of dollars spent on the unreliable method.
By the numbers: The report found that IP addresses match a consumer’s physical postal address only 13% of the time, and an email address just 16% of the time. The problem is systemic, as data providers who form the backbone of the ad-tech supply chain rarely agree on the data. This discrepancy means advertisers are flying blind, turning any campaign's success into a lottery based on the chosen data set.
Built on quicksand: “The state of IP data today is messy, despite the billions spent trading on it,” said Kathryn Barnitt, Head of Data Science at Truthset. The core issue is that IP addresses aren't stable identifiers; they are frequently reassigned by internet service providers. An IP address linked to a household last week might belong to a different home across town today, a problem one source called out as undermining the effectiveness of open programmatic advertising.
The garden wall gets higher: The findings expose a growing divide in digital advertising. While the open web struggles with unreliable signals, the walled gardens of Google, Meta, and Amazon are largely immune because they rely on deterministic user logins. The situation leaves free ad-supported streaming services in a precarious position, facing pressure to build direct relationships with viewers or risk being left behind.
The report serves as a stark warning that the industry must move away from flimsy, probabilistic methods and toward more reliable, deterministic identifiers. As Go Addressable's Tim Myers stated, this is essential for the future of addressable TV advertising and cross-platform measurement.
