Digital media and advertising is rapidly changing. To survive in this increasingly complicated environment, publishers and advertisers need innovative strategies and technologies to increase their efficiency (and keep revenues afloat) as they look to continue connecting with audiences and also proving the value of those relationships.
The Great Privacy Concern
As big tech players like Apple and Google shut down user tracking support within their ecosystems it’s only becoming more challenging for buyers and sellers to launch effective advertising campaigns. It all started way back in the day with Apple’s ITP announcement that ended third-party tracking in Safari and eventually restricting the use of first-party cookies in the browser as well. Then came those IDFA updates, requiring users to opt-in to tracking.
But Google sounded the death knell for the third-party cookie, announcing the depreciation of the third-party cookie in Chrome, which accounts for over 60% of global web traffic. They offered their Privacy Sandbox in exchange, but we all know how that played out. Out of the Sandbox came FLoC (Federated Learning of Cohorts) as a cookie alternative that Google says, “advertisers can expect to see at least 95% of the conversions per dollar spent when compared to cookie-based advertising.” The FLoC origin trial was then blocked by Amazon and other browsers. And then Google followed with an announcement that the third-party cookie deprecation would be pushed back until 2023.
“The end of third-party cookies in Google Chrome and the introduction of its Privacy Sandbox will signal a new era of programmatic advertising in web browsers,” says Michael Sweeney, Head of Marketing, Clearcode. “Even though there are many challenges ahead, there are also many opportunities for advertisers, agencies, ad tech companies, and publishers to incorporate Chrome’s Privacy Sandbox, and alternatives like ID solutions, into their existing offerings and setups.”
Lack of third-party cookie support will affect addressability and certainly impact the importance of measurement and attribution.
“It’s hard to tell precisely what to expect and how to react to certain changes in the field in 2021, but we know for sure it all has to start with an audition of data we as marketers rely on at the moment,” explains Nick Platonenko, CEO, VlogBox. “Only when we understand which specific data sources will no longer be relevant, can we start figuring out how to replace them. Then, an optimal data strategy will align with business planning and key performance indicators for separate channels. The era of attribution is coming, helping us to see where the traffic comes from.”
Whatever the alternative is, we all know that how we collect and use data in the future all begins and ends with the relationship that media companies and brands have with their users. And by extension, working with partners who honor those trusted relationships.
“We find that the trend is leaning towards a more efficient and transparent execution with trusted partners. We all need to improve how we communicate with consumers on the value exchange that is being performed that is keeping the internet cost-free,” notes Justin Kennedy, COO, Sonobi.
Innovate for Impact
As the third-party cookie crumbles and IDFA targeting becomes more complicated, effective advertising will need to rely more on making an impact to increase engagement instead of old third-party targeting methods. Creativity is emerging as the name of the game, and CTV and mobile are leading the charge with high-impact and interactive advertising.
In CTV land, interactive formats are raising engagement rates tenfold when compared to regular video ad formats, according to Innovid.
“We anticipate an increase in interactivity and innovation in ad formats, which will require sweeping changes in the technical structure of OTT applications. Otherwise, I anticipate user data security and invalid traffic tracking will remain at the forefront of publishers’ advertising considerations. The only way to address this now is to be proactive and adaptable with technology and demand vetting,” says Aaron Bendich, Director of Advertising, Digital Media Rights.
Facebook playable ads that let users try out games or other apps before downloading them are a great example of the impact innovative ad formats have. According to Facebook, Bagelcode reported a 3.2x ROI on their Android ad campaign, while Rovio lowered their new player acquisition cost by 40% through interactive ads.
Experimentation with shoppable ad formats to streamline e-commerce has also taken off during the Pandemic, but the verdict is out on how well they perform with viewers, especially in video spaces like live streaming and CTV. Native advertising is also experiencing a bit of a resurgence as newsletters become a prime method for collecting first-party data and authenticating users.
Long Live Live TV, CTV, and Podcasts too
Another area experiencing great change in digital media and advertising is in the worlds of live TV and CTV. With everyone at home due to COVID lockdown, live streams on IG like Verzuz and streamers on Twitch.TV took off like wildfires. Twitch.tv streaming gaming platform gained nearly 100% in viewership in March 2021 compared with March 2020 (from 1.6 million average viewers to nearly 3 million). And as expected, advertisers are beginning to follow the eyeballs.
Despite the improvements in the pandemic situation in some countries, these numbers don’t appear to be decreasing anytime soon. “Over 80% of vloggers we are currently working with have stated that they would like to include live streaming opportunities on CTV in their channel development package,” points out Platonenko.
CTV also dominated user engagement in 2020 due to COVID restrictions, and new streaming services like HBO Max and Disney+ greatly benefitted, while Netflix continued to reign supreme.
“CTV devices do not have standard categorization and no way to pass those values through. With more devices coming out all the time, it wastes resources across many companies to keep on top of device manufacturer data, with some companies unlikely to stay ahead of the game. We found around 2% of devices without categorization in Q1 which, over time, could grow to a significant niche audience without constantly updating the parsers to decipher the user agent strings,” says Alexandra Balashoyu, Director of Publisher Integrations, The MediaGrid.
There remains a number of challenges in the space, and without a technological solution to reliably identify device type, a number of impressions on CTV devices are miscalculated, causing buyers to question campaign validity. Technology will have to evolve to meet the needs of this growing market.
Digital audio advertising is also skyrocketing due to Pandemic-influenced behavioral shifts. It has already surpassed analog radio broadcasting (similarly to how CTV is about to eclipse cable television). Emarketer predicts that podcast advertising will pass a billion-dollar ad spend mark in 2021.
The lack of programmatic support presents constraints, but podcast advertising shows positive conversion rates and solid signs of growth. Podcast listeners are tuned in and engaged. Fifty-five percent of podcast listeners said they purchased advertised products at least once and 59% of respondents said they were spending more daily time on podcasts than on social media, according to Discover Pods.
Although beleaguered by challenges of their own, these booming areas of digital media offer pubs more channels to reach their audiences and additional revenue streams.
Recipe For Success?
Although targeting has become more complicated and old ad formats are losing their effectiveness, publishers are meeting the challenges head-on. They’re ramping up first-party data strategies, testing out ID solutions, getting better at communicating their value exchange to consumers, developing alternative revenue strategies, innovating ad formats, and mapping out new measurement techniques.
Technology, systems, and processes all need to evolve, and in the end, it will all come down to who is best able to adapt