How the ‘privacy by default’ Internet will reshape the advertising industry’s priorities | AdExchanger

Change is occurring rapidly in the digital advertising industry.

As Google sticks to its promise to phase out all third-party cookies by the end of the year, industry stakeholders are reconsidering product roadmaps, business models, and audience attribution tactics to prepare for advertising on an Internet with privacy by default.

Meanwhile, our advertising-supported digital ecosystem continues to grow and evolve, changing industry dynamics in real time. With so many changes, here’s what matters most to Prebid members, based on feedback from a cross-section of the industry’s top companies.

There will be a collective focus on privacy

As the industry continues to navigate the current move away from third-party cookies, there will be a substantial learning curve. With so many audience signals across the board, independent ad tech will need to coalesce around identity solutions that work.

The coming months will narrow the gap on the raw number of identity providers in the market while widening it in terms of the veracity and effectiveness of those that remain.

Unlike “business as usual,” considerable work will go into web audience attribution and measurement. Once cookies are gone, there will be a steady move toward more server-centric solutions that don’t rely on third-party data.

This won’t prove to be as significant a change for emerging channels like CTV, audio and DOOH, as they can rely less on third-party data. Consequently, the transition away from third-party data will accelerate innovation in these channels and drive a push towards interoperable solutions that make transactions easier for everyone.

In particular, actors that were not previously central to measurement (i.e. Prebid or SSP) could become more focused as they will still have the raw materials to build measurement and attribution data. Historically, this has been handled on the buy side through third-party technology, but this is likely to shift to the sell side, which is better equipped to fill the gap left by cookies.

Meanwhile, publishers and advertisers will forge closer ties through mutual use of first-party data. Industry-wide collaboration will lay the foundation for long-term revenue growth while providing baseline privacy standards for workplace media.

Make room for mobile, in-app and emerging channels

As cookies disappear, areas least affected by their obsolescence (such as mobile and in-app advertising) are poised to grow.

Last year, global mobile advertising spending hit a record $327 billion and is expected to rise to $400 billion this year.

With the increasing use of smart and digital devices, the programmatic opportunity will be immense. With the rise of digital out-of-home (DOOH), audio and CTV, the indispensability of server-side technology to seamlessly deliver advertising creative at scale cannot be underestimated.

As CTV and OTT platforms grow, marketers will increasingly look to run omnichannel campaigns. Server-side technology plays a crucial role in facilitating ad delivery across channels.

But the challenge lies in the lack of uniform standards across these emerging channels.

It will also be necessary to address the recent publication by the IAB of new definitions for instream and out-stream video formats. While this change is a net positive for transparency, publishers and exchanges must allocate time and resources to keep pace with the new technical demands of video.

Industry stakeholders will continue to innovate to improve monetization across video and mobile formats, developing tools and workflows to increase efficiency and seamless delivery of ads regardless of format.

The buy and sell side is approaching

As buyers and sellers address shared challenges such as identity, transparency and supply path optimization, the two ends of the supply path are beginning to work more closely.

User experience remains critical for both advertisers and publishers. There is always a shared desire for quality media, especially when the industry cracks down on sites made for advertising.

There is also a shared interest in making the purchasing and distribution of ads easier for all parties. Conducting frictionless transactions across web and server-side platforms saves advertising budgets and revenue for both marketers and publishers.

Meanwhile, brands are taking a more active role in innovation, partnering with the supply side to drive efficiency.

Overall, with increasing supply path optimization and consolidation, the ecosystem is becoming more agile. This creates more coherent solutions and allows for greater selection and choice.

Transparency will drive standards and spur growth

As digital media grows, major players are investing in partners that adopt open and transparent software solutions. This reduces the likelihood of fraud, inflated fees, and inefficiencies that reduce revenue.

Brands will increasingly seek transparency in the supply path, with open source initiatives providing greater clarity and confidence to marketers. Establishing interoperability between legacy and emerging digital channels undoubtedly generates revenue for the entire supply chain.

For solutions to be sustainable, they must be adaptable. They must also belong to an independent standards governing body outside of any private company or even Prebid. Collaboration for the collective good must be the driving intention so that solutions are accessible, efficient and lasting.

Next year: a rising tide lifts all boats

As we move into this next phase of innovation, pooling resources to attack common problems will pave our path forward. As solutions are currently being sought and the way is being paved to solve the challenges ahead, now is not the time to sit on the sidelines, but to get out into the arena and contribute to common solutions.

Publishers must monitor their revenue and perform persistent testing to find the most optimal settings. Buyers should also monitor their reporting. Creating a collective set of shared information is the best way to successfully adapt to major changes whenever they occur.

Audience segmentation, measurement, and attribution aren’t going anywhere, but they will intrinsically evolve. The competitive advantage will belong to those who collaborate, since the future of the industry depends on building the collective standards necessary to drive innovation.

“Data-driven thinking” is written by members of the media community and contains new ideas about the digital revolution in media.

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