Advertising transformation
Preparing for a cookie-less world
Google announced plans to deprecate third-party cookies on Chrome in 2024. Because Apple’s Safari and Mozilla’s Firefox have already eliminated them, brands have been preparing for a world without this technology. Third-party cookie deprecation is impactful because close to 80% of advertisers depend on them to target consumers. The post-cookie world is forcing publishers to rely on first-party data collected directly from users with their consent. The upside is that this seismic shift gives rise to opportunities in cohort-based audience management for data monetization, impression-level targeting, attribution analysis, and look-a-like and propensity modeling.
Responsible data practices can save costs
Publishers are focused on managing high volumes of content across user-generated content, owned, licensed, etc., in addition to gaining opt-in approval from users on their platforms. As such, it is critical to ensure transparency in data collection, comply with regulations like the General Data Protection Regulation and California Consumer Privacy Act, and build effective governance policies relating to PII management. Similarly, advertisers must comply with privacy regulations and implement effective security and governance protocols. If not managed carefully, the costs associated with storing, sharing, and activating data can escalate quickly—as can fines for non-compliance. Companies must establish enterprise retention policies to determine what data to retain versus what to delete for compliance.
Interactive and immersive content maximizes audience engagement
Enhanced content metadata tagging, richer delivery formats, and enhanced data collaboration tools allow publishers and advertisers to gain insights into how users interact with digital content. These insights enable the delivery of engaging content experiences, leading to opportunities for contextual targeting, dynamic creative optimization, and increased audience engagement. Data collaboration solutions like clean rooms are helping publishers tie ad spend and online event data to downstream results, both online and offline. As the dimensionality of this data expands, opportunities to build innovative data products that provide demonstrable value to advertisers will expand over time.
Investments in D&A and strategic change management increase
Companies are investing heavily in advanced data and analytics tools, teams, and resources to derive meaningful insights from their first-party data. As these budgets increase, they are also moving from IT to front-of-house business units responsible for company strategy and growth. Core to this strategy is a well-architected and modernized infrastructure that enables data to remain de-duplicated, locked down, and accessible regardless of location, ensuring that organizations can unlock the value of their data while managing tech debt and gaining efficiency. Further, using AI to automate internal tasks can free employees to focus on more strategic activities, leading to accelerated growth and a more efficient workforce.
Data collaboration leads to monetization
As the hottest item in tech today, data clean rooms offer organizations a secure environment where marketers can review and analyze signals from the major ad platforms, which can then be combined with first-party data to unlock advanced insights and perform conjoined analysis. Clean rooms serve a dual purpose of data analysis and security, ensuring that PII is encrypted or pseudonymized, with strict parameters on what types of information can be shared or queried.
A popular industry use case for data clean rooms is to link anonymized marketing and advertising data from multiple parties for attribution analysis, allowing organizations to adhere to privacy laws while also gaining detailed reporting and insights on customer behavior and segmentation. Some broadcasters are using data clean rooms to create privacy-safe data collaboration environments for advertisers to upload first-party data to power targeted marketing campaigns.
Customer data platforms grow in adoption
CDPs continue to play a crucial role in the advertising industry, offering various benefits and value. With the average business already having a multitude of unique technology applications housing customer data, CDPs address challenges and add capabilities relating to data quality, integration, segmentation, and activation. They help businesses manage data from multiple sources, enabling them to mine key insights and activate better customer experiences. CDPs enable organizations to manage first-party data more effectively, leading to better data quality and improved marketing return on investment.
Many organizations are starting to use CDPs along with data clean rooms to generate better-performing audiences and boost suppression rates in paid media campaigns. The CDP market is expected to grow rapidly, from $2.4 billion in 2020 to $10.3 billion by 2025, indicating significant investments and increasing adoption by brands to navigate the current unpredictable economic climate.
Content metadata taxonomy increases ad relevancy
Content metadata (i.e., data about content) provides AdTech platforms with important information on content sizes, specs, formats, and versioning. In essence, content metadata instructs ad insertion tools on which piece of content to use for each ad. Unfortunately, over $80 billion of paid media spend is wasted yearly because viewers are served the wrong ads. These inefficiencies are often the result of simple errors in the content metadata taxonomy, as this information is typically stored in spreadsheets and is thus highly prone to human error.
Armed with new AI tools, many in-house teams and agencies are finally confronting this problem head-on by cataloging and tagging content based on the latest IAB standards, reducing error rates, improving ad relevancy, and boosting RoAS.
Everyone is an AdTech company
In 2020, Eric Seufert posited that “Everything is an ad network.” In light of the meteoric rise of retail media, which eMarketer forecasts will make up a $45+ billion ad market in the US this year, it’s hard to argue he was wrong. Beyond retailers, other organizations are getting into the mix, with Uber’s ad network generating a run rate of $650 million this year.
The rise of privacy laws and the continued evolution of walled gardens are compelling media and entertainment organizations—especially broadcasters and publishers—to execute strategies to monetize digital traffic and unlock the value of first-party data. These moves require AdTech.
Across the industry, organizations are busy updating their tech stacks and making unprecedented investments in AdTech. Publishers are building supply-side platforms (SSPs). Broadcasters are standing up data clean rooms and white-labeling demand-side platforms. Agencies are hiring data scientists to build identity solutions with data from across the advertising world. It’s a non-stop AdTech party, so the corollary to Seufert’s thesis may be, “Everyone is an AdTech company.”
In 2024, these trends will persist, and leading players will continue to make serious investments in AdTech components, including SSPs, data clean rooms, ad networks, identify solutions, and more.
Slalom contributors: Arya Sundar, Rio Longacre
