Key Takeaways

• Taxonomy in adtech is a classification system that organizes content, audiences, and ad products into structured hierarchies

• Publishers use taxonomies to properly label their inventory, making it more valuable to advertisers

• Standardized taxonomies from IAB Tech Lab help create a common language across the industry

• Well-implemented taxonomies improve targeting precision, increase CPMs, and enhance brand safety

• Even small publishers can benefit from basic taxonomy implementation

What Actually IS Taxonomy in Digital Advertising?

You've probably heard the term "taxonomy" thrown around in adtech meetings, but what does it really mean for publishers and advertisers?

In the simplest terms, taxonomy in digital advertising is basically a classification system — a way to organize things into logical categories and subcategories. Think of it like the dewey decimal system for a library, except instead of books, we're organizing content, audiences, and ad products.

Let's say you run a food blog. Without taxonomy, all your content is just... food content. But with a proper content taxonomy, you can categorize pages as "Italian Recipes," "Vegetarian Meals," "Kitchen Equipment Reviews," and so on. This organization helps advertisers find exactly the type of content they want their ads to appear alongside.

The Three Main Types of Taxonomies in Adtech

There are three main taxonomies that matter in digital advertising:

1. Content Taxonomy

Content taxonomy classifies what the page or app is about. This is crucial for contextual targeting and brand safety.

For example, The New York Times doesnt just label all their content as "news." They categorize it into sections like "Politics," "Business," "Sports," "Arts," etc. This allows advertisers looking to reach sports fans to specifically target the sports section.

2. Audience Taxonomy

This taxonomy organizes users based on various attributes like:

• Demographics (age, gender, income)

• Interests (sports, cooking, travel)

• Purchase intent (researching cars, looking for loans)

• Behaviors (frequent travelers, mobile gamers)

When publishers have a clear audience taxonomy, they can offer advertisers more precise targeting options, which usually means higher CPMs.

3. Ad Product Taxonomy

This newer taxonomy, introduced by IAB Tech Lab in 2022, classifies the actual products or services being advertised. It helps publishers control what types of ads appear on their sites.

For instance, you might be ok with "athletic apparel" ads but want to block "weight loss supplements."

Why Publishers Should Care About Taxonomy

You might be thinking, "This sounds like extra work. Why bother?"

Here's why taxonomy matters for your bottom line:

1. Higher CPMs: Properly categorized inventory is more valuable to advertisers. Research has shown that contextually relevant ads perform better, and advertisers will pay premium rates for well-labeled inventory.

2. Better Fill Rates: When your inventory is correctly labeled, it's easier for programmatic systems to match it with relevent demand.

3. Enhanced Brand Safety: Clear content taxonomy helps prevent inappropriate ad placements that could damage your reputation with readers and advertisers.

4. Improved User Experience: Relevant ads generally create a better experience for users than random ones.

How to Implement Taxonomy as a Publisher

Getting started with taxonomy doesn't have to be complicated:

For Small Publishers:

1. Start with the IAB Content Taxonomy 3.0 as your guide (it's free and available on GitHub)

2. Focus on the top-level categories that apply to your content

3. Implement these categories in your CMS or through your ad server tags

4. Make sure your SSP partners are receiving these category signals

For Larger Publishers:

1. Consider using all three taxonomy types (content, audience, and ad product)

2. Integrate taxonomy throughout your tech stack (CMS, DMP, ad server)

3. Train your editorial team to consistently apply taxonomy during content creation

4. Work with vendors that support standardized taxonomies in their systems

Real-World Impact: How Taxonomy Boosted One Publisher's Revenue

A lifestyle publisher I worked with saw a 32% increase in eCPM after implementing a proper content taxonomy. Before the implementation, their home decor content was mixed in with fashion content, confusing advertisers.

By clearly labeling their home decor inventory, they attracted home furnishing advertisers who were willing to pay higher rates for these contextually relevant placements. The taxonomy implementation cost was minimal compared to the revenue increase.

Common Taxonomy Mistakes to Avoid

• Too many categories: Keep your taxonomy manageable. Start with 10-15 main categories instead of trying to implement hundreds

• Inconsistent application: Make sure everyone understands how to apply the taxonomy consistently

• Ignoring standards: Don't create your own unique taxonomy when industry standards like IAB's already exist

• Static implementation: Taxonomies should evolve as your content and business change

The Future of Taxonomy in a Cookieless World

As third-party cookies disappear, contextual targeting is becoming more important, making taxonomy even more valuable. Publishers with strong taxonomy implementation will have a competitive advantage in this new environment.

Smart publishers are already expanding their taxonomy efforts, knowing that well-organized content will command premium rates in a world where precise audience targeting becomes more challenging.

Bottom Line

Taxonomy might sound like a boring technical topic, but it's actually a powerful tool that can directly impact your revenue. Start simple, follow industry standards, and gradually refine your approach.

Remember: in digital advertising, organization equals monetization.

References:

• IAB Tech Lab Content Taxonomy 3.0

• Why Common Taxonomies are Key to Programmatic Efficiency

• How Publishers Can Use Taxonomies to Maximize Monetization

• IAB Tech Lab Ad Product Taxonomy Documentation