According to eMarketer, programmatic advertising networks will account for 83.5% of all US digital display advertising spend. Similarly, according to bit.ly, programmatic advertising currently accounts for 90% of current UK digital display ad spend. To date, cookies have been the key campaign tracking tools for the display advertising market.
However, cookies, especially the use of third-party cookies, have been substantially abused. The U.K. Information Commissioner's Office (ICO) has identified this as a major security risk factor. Accordingly, the leading browsers Chrome, Explorer, Firefox, Safari, etc.) are taking steps to block or phase out cookies as key user tracking tools.
While the Interactive Advertising Bureau (IAB) is endeavouring to create a standardized global user ID to improve audience recognition and engagement personalization – this will take time and require a broad-based collaborative effort between key industry stakeholders.
Beyond IAB, ecosystem enablers like Apple and Google are promoting solutions like IDFA and GAID respectively. But, digital advertising with its many dimensions (browser vs app, iOS vs Android, wireline vs wireless, etc.) has also got to grapple with multiple challenges to accurately track visitor interactions across multiple channels and devices.
We have identified a number of industry challenges that the industry needs to consider, including:
- The demise of third-party cookies that may unfairly benefit the largest players (Facebook, Google, etc.);
- That Advertisers may need to deal with multiple “walled garden” supply-siders and may have to resort to “last click” attributions – again benefitting the largest players;
- That first-party data, or similar, may become a key tracking tool and that both Publishers and Advertisers need to prepare for that transition; and
- A potential increase in Cost-Per-Action (CPA) and how this may impact digital advertising ecosystems.
One needs to analyse these disruptive challenges from each key stakeholder’s perspectives, namely the Publisher and the Advertiser.
The Publisher Perspective
For the large established publishers, this evolved ecosystem model represents an opportunity to establish walled gardens of their own, similar to the Facebook model. These publishers with large user/subscriber bases and multiple user engagement channels (TV, Radio, Print, OTT) have many options to improve visitor engagement and hence monetisation across both their web and app platforms. In this scenario, direct Publisher asset/property monetisation using contextual campaign choreography to improve the quality of visitor engagement is far more valuable than traditional programmatic techniques. To attain these goal Publishers will need to build their own first-party data repository to facilitate effective campaign targeting previously provided by third-party cookies.
An opportunity also exists for large publishers to collaborate with each other (i.e. newspapers) to leverage their own first-party data to increase their share of digital advertising.
However, any blogger, website owner, or app developer also qualifies as a digital publisher. Telecom carriers are mandated to collect vast amounts of first-party data across their network infrastructures at their own significant cost. This first-party data can be monetised given appropriate privacy constraints. By offering digital monetization services to bloggers, website owners, and app developers as an alternative to Google, these telecom carriers can build new revenue streams utilising their significant first-party data assets.
The Advertiser Perspective
Currently, most brands and digital agencies rely on third-party cookies for tracking, targeting, and retargeting.
The demise of the third-party cookie will make it very difficult for brands and agencies to manage the effectiveness of their marketing campaigns.
Knowledge about users and the ability to communicate effectively with them is the foundation for every direct advertiser-publisher relationship. We provide a link to “The costs and benefits of ‘cookie law’ for marketers” that concisely discusses this topic from an Advertiser perspective.
In the legacy programmatic model, end-user consent was not considered a major issue. Legislators around the world are ever-increasingly tightening privacy laws around digital advertising. New digital privacy legislation will significantly impact the legacy programmatic advertising model. Effectively it is likely that if end-user consent is not provided Advertisers will not be able to exploit third-party insights distilled from that user’s digital footprints.
Therefore, direct relationships between Publishers and their visitors/subscribers will become crucial for effective targeting and retargeting. Whereas today third-party data provides the primary source of campaign targeting, imminently the collection and management of visitor/subscriber interactions will need to be curated by each Publisher and made available to Advertisers for appropriate targeting.
The Enterprise Perspective
An Enterprise is essentially both a Publisher and an Advertiser as they need to continuously communicate appropriate and consistent messaging to visitors to their digital assets whether these be websites or mobile apps. For any Enterprise, it is about being relevant to customers, understanding their needs and expectations, and appropriately engaging them within the right context across multiple channels.
As with both Publishers & Advertisers, as discussed previously, Enterprises need to better understand their customers and be able to communicate with them with the most appropriate messaging across the most appropriate channels.
Hence, a well-executed data management platform (DMP) and digital campaign strategy will determine the ultimate success of Publishers, Advertisers, and Enterprises in a post-cookie world.