For those of you like me who have been in the business for a while, you’ll get the pun in the title. For those of you who don’t, let me explain it. I lived through the year of mobile from 2013-2018. I feel like as much as the adtech industry tries to change quickly, there are always other factors at play that lengthen the adoption of change. While things are moving quicker for identity, some portions are eerily reminiscent of “the year of mobile.”
It’s been a little more than a year since we looked at the monumental shift in the adtech industry expected because of new regulations designed to protect consumer privacy. Specifically, new rules stated that cookies – data collected from consumer browsers and used by advertisers to deliver targeted messages – were to be eliminated or reduced. At the time, we made several predictions about what might happen and offered solutions to advertisers and tech companies. How did our predictive powers hold up?
Well, last year, we were skeptical that plans by Google Chrome to end third-party cookies support completely by the end of 2022 would materialize. It appears we were right to be doubtful: The deadline set by Google is now in Q2 of 2024. Safari and Firefox, however, no longer support third-party cookies. We also advocated for solutions that included first-party data collection and contextual targeting, something also now supported by McKinsey & Co. analysis. McKinsey’s research finds that the publishing industry needs to figure out a way to replace $10 billion in ad revenue with the demise of cookies and third-party identifiers.
Let’s take a closer look at our predictions, what we got right (or wrong), and further developments in those areas:
First-party data/authenticated traffic
Prediction: Last year, we forecasted that brands and publishers would begin leaning into and finding ways to activate the data collected on customers and clients.
Did we get it right? Yes.
Developments: Gartner Inc. recently released a list of “Genius Brands”, a best-in-class listing across 15 industries. These Genius Brands – including Toyota, Clorox and Benjamin Moore – had 10.9x more traffic than their peers in 2022 and boosted revenue by 8.6% in 2021 compared to the year before. So if you are looking for more revenue, you need to have a strong first-party data strategy. Additionally, you need to operationalize that data and make use of it. Just getting the data itself isn’t sufficient. So, you have to have the tools and platforms in place to do so.
Second-party data
Prediction: Using another trusted party’s data to gain incremental reach – as long as the company is compliant and has a similar audience, was forecasted to grow.
Did we get it right? Yes.
Developments: Data cooperatives in the adtech industry are increasing, and that’s partly due to consumer willingness to share more personal information. Think about the move by Netflix to move to a subscription-tier model. If a Netflix user chooses a cheaper subscription in exchange for more ads, then that means their personal data will be available for targeted digital advertising. More consumers willing to share their data suggests that more data will be available to other companies. Still, the World Economic Forum warns that the success of co-ops depends on providing high-quality data and a quantity that proves beneficial to the participants while also preserving data privacy. This is one of those places to watch.
Interest/intent-based digital advertising
Prediction: We noted that while Google was continuing to develop its browser-based Topics API, many other companies could also send you interest or intent signals. Depending on how you merge these with other attributes, it could make your future targeting more successful.
Did we get it right? Yes.
Developments: The New York Times recently did a story based on anecdotes of what some people see as a quality deterioration in the ads that target them, proving that an unfocused approach to interest-based ads won’t work. However, if a more targeted strategy is used – such as clickstream data or known intent stitched in with the bid stream, then results will improve. For example, if a user visits the ESPN.com site or uses the ESPN smartphone app, then clicks over to baseball, then clicks again to the Cincinnati Reds, then that reveals a host of information about that user. Furthermore, if said user then opens an ad in a web view that directs them to purchase a Reds jersey, then there is an intent to purchase signal. Stacking intent and interest in the bid stream is something we are hearing more and more about since the same time last year.
AI and ML in the adtech industry
Prediction: While historically, companies have used some kind of modeling to drive efficiency, we said AI and ML strategies would expand.
Did we get it right? Yes.
Developments: AI can produce large volumes of content within seconds, allowing customers to see and test various concepts very quickly. In addition, AI and ML can also do some rote tasks, such as analyzing customer reviews and then figuring out how to operationalize the findings. Marrying other signals in real time enables better customer experiences for the consumer and better targeting for advertisers. Holistically, it would be beneficial for more companies to look at high-level analytics to do real-time rebalancing of media spends leveraging AI. For instance, one could look at your media mix modeling if you’ve properly got the channels connected in real time and then make changes on a rolling basis maximizing ROAS.
Contextual data/NLP/Attention
Prediction: Contextual data can be effectively expanded with NLP reading the website to understand what a user is looking at (a golf website) and better target ads.
Did we get it right? Yes.
Developments: McKinsey notes in their research that while some may view contextual advertising as inefficient and “a step backward in the evolution of digital advertising, it can offer a viable short-term solution.” McKinsey notes that as technology improvements boost the “granularity and precision of context classification and ad matching,” contextual data is providing a new avenue for advertising. Also, consider that MoviePass now requires customers to use the MoviePass smartphone app in order to earn free tickets. Then by using the device’s biometric facial recognition to track a user’s attention on ads, MoviePass knows whether the user is actually looking at the ads or not. Keep watch on this one. Regulation may explicitly prohibit this in the future.
Other non-cookie-based IDs
Prediction: There are lots of other companies trying to create synthetic IDs to mimic what device ids and cookies were doing.
Did we get it right? Yes.
Developments: Connected televisions (CTVs) are emerging as critical to the media mix. Automatic content recognition (ACR) data, which is collected using the tech built into smart TVs, can help measure the reach and audience quality of an ad campaign. The ACR is linked to an identity spine to help expand the overall reach and open internet exposure for advertisers. For instance, look at CafeMedia. They use an authenticated traffic solution (ATS) that employs a deterministic identifier. CafeMedia reported that when it authenticates traffic through ATS, it sees a 300% to 500% jump for Safari users. For Chrome users, it’s an increase of 20% to 30%. So there are workarounds here, but you need to make sure to find something that will get you the reach you are looking for.
Solving adtech industry challenges
The last year has shown that industry challenges will continue to grow when it comes to adtech. While Aerospike offers numerous solutions, such as the ability to store more data, power AI/ML, and improve the customer experience, we are always working to keep you updated on the latest trends and deliver the results you need to power your business.
To that end, I recently did a webinar with Aqfer CEO and Co-Founder Dan Jaye for “Beyond Identity: The Pitfalls of Not Becoming Identify Agnostic in 2023.” In this webinar, we look at the issues facing the adtech industry and help you find the best solutions for your company.
As we’ve been saying for over a year, advertisers can no longer rely on a single identity provider or get locked into buying media on a single platform. As the world moves to buy-side cross-platform control, media buyers will instead be able to move between platforms to spend more efficiently while improving ad performance across the entire digital advertising ecosystem. Still, this won’t become a reality unless there is an access point with a lynchpin stitching together the fragmented ecosystem. As companies compete to spend and leverage data to ensure security, marketers and advertisers need to be neutral.
Aerospike and Aqfer can help you gain a greater understanding of the problems hitting the adtech industry, such as how limited coverage of identifiers leaves gaps in your ability to understand your audience. Check out the webinar for a look at how the ecosystem has changed across digital platforms to include not just web and mobile ads but also CTV, digital OOH, gaming devices, and customer 360.
