In retrospect, 2021 turned out to be surprisingly robust for the advertising industry despite all the uncertainty. The industry was able to make significant gains while many brands were proactively preparing for a future that still doesn’t have clear answers for which solutions will drive measurement and addressing. We are now in a market that rightly demands greater focus on consumer data consent, data management and data collection practices.
The industry has taken significant steps out of a second year of pandemic conditions. Total home ad spend has increased by about 25%, according to IPG’s Magna Global. There is real momentum for 2022 – dare we say that 2022 is shaping up to be an even stronger and incredibly optimistic year for digital advertising? As we prepare for the future, here are the key trends that will continue to drive the industry forward.
CTV shows the way forward
We all recognize that the pandemic has accelerated the rise of connected television (CTV). As consumers continue to cut the cord and cookies fade into the past, CTV’s cookie-free environment will continue to give brands a practical lesson in how to effectively market to audiences at scale in the industry’s future state.
Of course, CTV also provides and is teaching marketers about the convenience of buying “TV” in a bidding environment where plans can be adjusted ad hoc and measurement is closer to digital media than traditional media. .
Expect more dollars to switch from traditional television to CTV, on national, regional and local programs, as CTV is where the younger audience most valued by advertisers goes. And brands that develop the capabilities to operate on CTV will find that many of the strategies can be successfully integrated into their mobile and desktop efforts as cookies disappear.
Alternative to cookies gains strength
At ENGINE Media Exchange (EMX), we track the adoption of identifiers within the bidstream, the signals and data passed from publisher to buyer required to complete a programmatic transaction. We’re starting to see a significant increase in the volume of aliases over what we measured at the beginning or the second quarter of 2021. In fact, we’re seeing 2x the growth with +20% of total impressions now including another ID in addition to a cookie.
The fact that more publishers are including and testing cookie alternatives is a significant advance and shows real progress as we approach the 2023 cookie expiration date. The next step will be to understand how these cookie alternatives help drive success of advertisers, which IDs work best and, ultimately, which ones will see more adoption and will help ensure that publishers continue to maintain their CPMs while providing marketers with the ability to continue validating their media investment.
The rise of data minimization
Given the hyper-awareness around consumer privacy, the industry needs to show that we can be responsible and ethical stewards of how we manage consumer data. And it’s up to us as an industry to educate and ensure that consumers understand the benefits gained through exchanging data for access to free media and information.
At the same time, it is in the interests of consumers that the industry continues to focus on developing data minimization strategies, including storing a minimum amount of data to achieve customer goals and forgoing data storage, resale and creation of infinite works derived from the data collected from consumers.
Data minimization, ethical use of data and a policy of clearly explaining to consumers the options they have when it comes to opting in or out are the three legs on which the industry can grow, keeping consumers safe and satisfied regulators.
It’s time for cohort modeling
Cohort modeling requires advertisers to target not individuals, but a group of consumers who may have differences but who are targeted as one. At its core, cohort modeling allows for an understanding of the consumer, but with anonymization.
The challenge for brands going forward will be to determine who is making the cohort modeling revenue and how advertisers can make sure the combination fits well with their individual marketing goals.
Cohort means some sort of deterministic and probabilistic change in the construction of datasets, so it will never be perfect. But it is likely to gain popularity in the medium term because it is very privacy-safe and still allows for some segmentation in an omnichannel approach.
The data-connected market
While they have their benefits and are overlooked by most, cookies have also masked many bad habits from advertisers, including the tendency to collect and use data indiscriminately and inefficiently. In a cookie-free future, a data-connected marketplace will emerge to break these habits by taking the data app and moving it down, making it more portable.
The data-connected marketplace applies data at the SSP level, so publisher data connects to first-party advertiser data, driving much higher match rates that still respect privacy and, of course, no cookies. Brands can calculate in advance how many devices and impressions and at what price they will need to buy to meet all targets in their forecasting tools. Choices will become much more streamlined – choose to spend more to reach consumers who want to engage the most, or rethink strategy to include a wider audience mix.
Despite all the concerns that are occurring internally, these continue to be great times for advertisers. Even with all the changes expected over the next 12 months, innovation and collaboration are creating a positive flywheel. New needs, new technologies and new customers are offering us a year full of opportunities, as long as we are ready to take advantage of them.
Translated matter from AdWeek.
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