Digital Advertising Has a Promising 2022 in Store — for Those Who Get Ready for It
It’s often said that one of the only constants in the digital ad industry is change, but even that claim is too straightforward. In reality, the very things that are changing in this business are constantly in flux. CTV was evolving gradually until the pandemic altered viewers’ habits in a way that made CTV one of the hottest markets around. Privacy-first identity solutions were a slow-burning evergreen trend until new regulations and big decisions from Google and Apple made identity and privacy urgent matters.
The industry is moving away from third-party cookies, toward VR/AR experiences, and into a rebounding economy. We’ll see more things transform in 2022 — and here are some trends that I see accelerating, which advertisers, agencies, and publishers need to watch.
R&D investments in identity and data modeling
We’ll be starting 2022 with no clearly viable, scalable, vendor-neutral identity solution to replace third-party cookies. The second half of 2023 is getting closer and closer, and we’ll be seeing more businesses in digital devoting more budget to taking matters into their own hands. They’ll be taking ownership of and understanding the value of their first-party data, partnering with businesses that can help fill in any data gaps they may have, and testing alternative identity solutions on the market.
Third-party cookie deprecation stands to upend how data modeling and measurement have been done. Digital stakeholders know they can’t let identity, targeting, and modeling be broken, and they’ll put more money toward machine learning and strategies for augmenting their own first-party data.
Automation will increase, benefiting contextual targeting and AR/VR
We’re talking about machine learning — the data feedback loop that trains algorithms to analyze what they look at more deeply and broadly. Over time, data automation tools become able to “teach” themselves more and more, independent from human input. ML and AI have evolved over the years to understand tone and intention and to understand images as well as text.
This evolution is central to the development of contextual targeting — which is positioned for much broader adoption as the industry looks for alternatives to cookie targeting. It’s also central to the development of AR/VR experiences that feel more like the inherently nuanced real world.
Brands and agencies will bring more tech in-house
In-housing has been a long-simmering industry trend, and in 2022, it’s poised to ramp way up. Bringing ad tech capabilities in-house has been hampered in the past by cost — not a lot of companies, aside from the biggest brands and agencies around, could afford it.
But investment in the industry is changing, and so is the relationship between agencies and investors. Agencies have been investing in M&As. And brands and agencies alike, as mentioned, are already seizing this moment to take control of their data — making tech moves that will naturally facilitate and expedite the development of robust solutions that can augment or replace outsourced pieces of the ad stack.
Blockchain will play a bigger role for identity solutions
The industry has known for a while that blockchain’s transparency, decentralized nature, and immutability have valuable applications in preventing ad fraud and securing the ad supply chain. Those same benefits also deliver great value for brands that are dedicated to building strong first-party data strategies.
Those strategies will naturally require as much first-party data as possible. And while consumers are willing to share their data with brands, they have some conditions. Consumers are wary of vague statements about brands using their data for marketing purposes — they want a view into how specifically their data is being used. There is sometimes a disconnect between how companies say they use the data and what consumers think that usage entails. Consumers want to be able to opt out of data sharing, and they want transparency into what data is being collected.
Brands that can offer that transparency — which blockchain offers — will win consumers’ trust and incentivize them to continue engaging with the brand and sharing data. Businesses in digital need to prove consumers are getting a fair trade when they share their information, and blockchain provides that proof. The more first-party data a business has, the more wisely it can make decisions about the identity solutions they will need and be able to implement after 2023.
The digital ad business is roaring back after a year and a half of uncertainty — but don’t expect the benefits to fall in your lap. Success will come to those who understand the challenges in identity, privacy, transparency, and trust. Those who stay prepared and make moves toward the solutions that best fit their individual businesses will bring the industry closer to solutions to those challenges. Those who don’t will be stuck living and working with more uncertainty.
Mel Bessaha is SVP, Head of Demand, North America, at Connatix.