5 Ad Tech Predictions for 2020
For advertisers and publishers, 2019 was a year of disruption. Shifts in the way third-party cookies are fundamentally collected and managed, the continued push for transparency across the media supply chain, and everything in between marked 12 months of industry-shaping change.
As we head into 2020, it’s obvious that more change is on the horizon. But what are the most likely trends? From cookie-less tracking to consolidation, what should advertisers and publishers prepare for? Based on conversations I’ve had with customers and partners, there are five trends that will have a major impact on our industry in 2020. I expect these trends to dominate the first half of the year, shaping the market for the next 12 months and beyond.
The rise of SPO will force SSPs to incorporate more services to stay relevant.
Header bidding has created bid density and, therefore, higher prices. That, coupled with the shift to first price auctions, has left buyers feeling like they’re paying too much for inventory via SSPs. Publishers, however, feel like SSPs have increasingly catered to DSPs to ensure demand (allowing optimizations that have resulted in bid-shading), which has created downward pricing pressure on all. This, plus the need to reduce the number of middlemen, which has triggered safety and tech fee concerns, has resulted in the desire for improved supply path optimization, or SPO.
As a result, smaller SSPs will likely get squeezed out and all SSPs will need to find other ways to stay relevant and provide value beyond yield management – possibly even serving as the data hub for buyers. The Rubicon-Telaria deal is a great example of that. These mergers are more likely to happen as SSPs compete with platforms like Google that have huge scale and, therefore, better pricing. Incorporating more data products by merging of the Rubicon SSP to the Telaria CTV/video SSP makes sense.
Swing back to context.
The reduction of third-party cookies (which often play a critical role in onboarding offline data into web environments and are also the best connectors to sync first- and third-party data with activation platforms) has further diminished the accuracy of third-party data, which has been a core targeting feature for long-tail media campaigns. Coupled with concerns around high tech tolls, transparency and fraud issues, and brand safety concerns, media budgets are shifting to more secure executions where buyers can work directly with the premium publishers who own the hearts and minds of their audiences.
Studies bear this out, as one third of large advertisers have cut open exchange spend due to transparency concerns, with most programmatic growth now coming from private marketplaces (PMPs) and programmatic guaranteed (PG). Premium publishers curate trusted audiences that are meaningful for advertisers, especially when they want to purchase programmatic inventory in a well-lit, safe, and relevant environment. Context may be more critical for publishers in the first half of the year as they slow down data targeting (for some, this may even be a pause) while adapting to remain compliant with the new CCPA rules and regulations.
Shift toward more premium programmatic executions.
Faced with pressure from clients demanding more transparency and better inventory, agencies are moving more deals out of the open auction and into the premium and direct-buy types of PMPs and PG. This shift allows them to reduce tech fees, while also allowing for safe, efficient, and transparent programmatic media buying.
Of course, this doesn’t mean that open exchanges are going away. Rather, we’re seeing segmentation in the way that advertisers do their buying. Open exchanges are going back into the rightful position of monetizing lower value, remnant, and longtail inventory. Meanwhile, upper-funnel activity is moving back to more premium executions and strategies now that the technology has caught up with the market. More than a few of our agency clients have flagged this shift as a strategic shift in 2020.
First-party data will be king.
Given current concerns, first-party data will become more important to programmatic buyers, for several reasons. First, marketers are increasingly concerned about consumer privacy as regulations like GDPR and CCPA — set to go into effect the first of the year — install stringent rules over what can and cannot be collected without consumer consent. This also ties into the demand for transparency from marketers, who want to know that the data they’re using isn’t just privacy-compliant, but of high quality. Second, browsers like Google, Apple and Mozilla are cracking down on third-party cookies, creating new barriers to data collection and consumer targeting.
As a result, first-party data, which offers quality and visibility into its origin, will be critical for use in programmatic and automated-buying environments. We are going to see a massive investment into first-party data operations across the industry.
Zero-party data has arrived.
Of course there will need to be something even better than first-party data as marketers seek to pull away from the competition. We’ve now seen the introduction of zero-party data. Whereas first-party data is “passively” collected consumer data from websites, apps, social platforms, etc., zero-party data is proactively and willingly shared by the consumer. Examples include purchase desires and preferences through interactive experiences like subscriptions, surveys and loyalty programs, etc. It’s completely opt-in, so we can, therefore, presume a high level of quality, transparency, and accuracy. It has the potential to unlock deeper consumer profiling and targeting. A March report from Forrester, for example, lauded zero-party data’s value, saying it would help marketers “build direct relationships with consumers and improve their product recommendations, services, and offers.
It may be too early to tell if this is just another marketing buzzword or the new holy grail. But as regulators and browser companies continue to tighten up on privacy, zero-party data might become the new epitome of privacy-compliant data — when you don’t need a lot of scale. If we see it establish a foothold, it will likely be a supplement to the more versatile first-party data.
Charmagne Jacobs is VP & Head of Global Marketing & Partnerships at Adslot.