1. Dmexco 2019: The Cookie Conundrum

September saw many from the digital marketing corners of the world descend on Cologne, Germany and/or New York for Dmexco and Advertising week respectively to discuss the key challenges & opportunities ahead – with cookie talk dominating.

Cookies remain a huge discussion point right now as the post-GDPR world takes shape, and the impending California Consumer Privacy Act (CCPA) contributes to the rise in awareness of online tracking. Major browsers have reacted by eliminating or restricting 3rd party cookies leading to challenges for targeting, measurement, and attribution.

Apple was the latest to update their browser – Safari – with the latest iteration of its Intelligent Tracking Prevention (ITP). Version 2.3 will crack down on localStorage and other tracking mechanisms that try to circumvent ITP. In a Webkit post, John Wilander explained that the primary motivation behind ITP 2.3 is to combat what WebKit considers to be the “continued abuse” of link decoration, aka adding code to a URL in order to create cookie-less identifiers.

ITP doesn’t rule out all tracking capabilities though; ITP 2.3 allows for 1st party tracking capabilities for conversions up to 7 days after the click. So whilst the crackdown on cookie tracking workarounds will continue, the bottom line is obtaining and persisting consent per user is the key.

With a recent Google study suggesting impressions without cookies decrease in value by 52%, and in particular news publishing seeing a 62% revenue decline, many will be looking for new ways to monetise their inventory as well as new revenue streams (e.g. subscriptions).

“Journalism, Media, and Technology Trends and Predictions 2019”, Reuters Institute for the Study of Journalism at the University of Oxford

2. Tracking in a post-cookie world

At the beginning of September the IAB Tech Lab called for a new approach to online tracking in an article with some really good historical context about cookies, as well as a call for new “standardized privacy settings and consumer controls tied to a neutral, standardized identifier”. Such a move would give consumers a single identifier that they can give access to vendors that can demonstrate compliance. Brendan Elch and Johnny Ryan – both of ad blocking browser company Brave – questioned such an idea with the latter taking the stage at Dmexco. Whilst questioning whether IAB’s concept can be delivered given certain specifics of GDPR, Ryan didn’t give much of a solution but did warn people to prepare for RTB reform whilst acknowledging that programmatic can be done in a GDPR-compliant way.

3. Breaches increase focus on User Privacy

Earlier in the month, Brave’s Ryan was in the news for discovering evidence that suggested Google was using secret web pages that fed personal user data to advertisers in breach of GDPR. During an experiment they found that Google had allowed a number of vendors to match with identifiers for targeting purposes. Its another instance that highlights the importance of privacy initiatives including GDPR and the upcoming CCAP in the US, and should shape the privacy debate going forward.

From grappling with issues around inventory quality, transparency and the use of personal data, combined with the reduced use/blocking of 3rd party cookies, there’s a lot of challenges. Furthermore; UK regulator ICO is also raising its game with a recent PR push including appearing on stage at industry events, agreeing to interviews with the press to deliver a simple message, again and again: Take GDPR more seriously because the industry’s initial attempts to comply have come up short.

Amongst these changes and pressures – from regulators, platforms and browsers – there’s huge opportunities because ultimately user privacy and effective advertising go hand in hand. Transparency is a must have for all – brands need to deliver meaningful, relevant ads to consumers; whilst publishers need to put the consumer at the heart of their strategy to determine how they can transparently & effectively fund their content. If marketers can continue to deliver on this it can nurture trust in data that in turn can continue to push the growth of programmatic whilst respecting user privacy. In Europe, programmatic revenues grew 33% in 2018 with IAB finding that 70% of display and 50% of all video inventory are traded via programmatic.

4. Alliances challenge the duopoly

There’s been an interesting trend of broadcasters, magazine groups and other publishers forming alliances in order to create premium trusted ad environments that can challenge the big walled gardens – like Facebook and Google – for scale and ROI. For instance; former Mirror Group chief David Montgomery is plotting a takeover spree that is aiming to bring together a number of regional news properties to drive revenue through aggregated audiences, with possible partnerships and joint ventures also being explored.

Another example includes an alliance between Buzzfeed, Group Nine Media and Insider as a way to sell video advertising collectively at significant scale whilst guaranteeing brand safe content. Its not just alliances either; in the US Vox Media is acquiring New York Media to capitalise on more diverse revenue streams.

It’s also important to note the work the duopoly are doing to help publishers. Google partnered with Archant recently – a UK based regional digital news publisher – to work making local digital news commercially viable. Project Neon will see the creation of several digital news platforms to test different business models and find ways to reverse the commercial challenges local news publishers have faced in the last decade.

5. New Age of Audio?

The rise of podcasts and online music streaming, as well as a wealth of devices to listen to audio on including smart speakers and smart headphones, has meant advertisers are re-evaluating the role of audio in their marketing mix with the potential to drive programmatic ad ROI on audio by targeting highly engaged audiences.

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Advertisers need to be where their customer are, and given the rise of audio then it makes sense to test & shift budgets to audio. Programmatic audio in Europe has grown over the last 3 years, accounting for more than 40% of digital audio ad spend in markets like the UK and Germany with those numbers expected to rise. As a reflection of its growth, Nielsen unveiled Nielsen Podcast Brand Effect recently to help quantify the impact and effectiveness of podcast ads, with results in the US finding 57% of podcast ads tested outperformed pre-roll video in driving purchase intent, for instance.

Streaming (both gaming/eSports and non-gaming) is another area for advertisers to explore, with their growth fuelling potential brand integration opportunities such as programmatic in-game ads. For instance; Newzoo predict the global eSports economy will top $152bn in 2019. Similarly mobile gaming could represent a missed opportunity for marketers due to common “gamer” stereotypes that don’t exist. Going beyond this stereotype means knowing audiences better with improved insights to fuel better segmentation and improved activation as a result. The global mobile gaming market is projected to be worth $174 billion by 2021 according to NewZoo.

Other key things to monitor

  • Google wins right to be forgotten case in Europe meaning they don’t have to comply with the policy on a global scale. Its a fairly significant win for Google who argued that the law on a global scale would interfere with countries with different laws, though it also flies in the face of privacy campaigners to an extent.
  • Thomas Cooked: UK-based travel company Thomas Cook collapsed after being in operation for 178 years, leaving millions of consumers stranded and a loss of around 21,000 jobs. One of the main takeaways has been the intense nature of competition from digital-natives and the impact of a failure to adapt. In the digital economy, a brand is only as good as the experience it offers, with the use of data & AI key to unlocking those experiences.
  • Brexit leaves European marketers undeterred with, according to Rakuten Marketing, 74% of marketers in UK, France and Germany expect marketing budgets to increase in 2020. Not all reports are quite so positive with eMarketer reporting that UK automotive digital ad spend is being impacted with growth falling from 9.2% this year to 8.1% next year, having already fell from 15% in 2018. However, as in other sectors the use of higher quality data (e.g. purchase intent) can help maximise ROI from those budgets, whilst offering an opportunity for publishers to push more relevant audiences to advertisers.
  • Data quality needs to be pushed further. According to Forrester; while 82% of organisations place a high priority on refining data quality, some 26% of marketing campaigns have been negatively impacted by substandard data during the last year. Poor data leads to wasted media spend, so marketers must strive for high quality data that is accurate, compliant and relevant.

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