When Forrester predicted a year of reckoning for marketers in 2018, it said CMOs needed to pursue adtech trends and data in order to survive.
With new parameters for digital ad transparency put in place, the looming General Data Privacy Regulation, heightened emphasis on programmatic spending and martech and adtech continuing to converge, executives must track both the trends and the rules of their regulatory forces.
Heightening Transparency With ads.txt
For one, ads.txt adoption, a new means of eliminating the black market for digital ad inventory, is set to “explode” this year, said Tim Mahlman, president of advertising and publisher strategy for Oath, Yahoo’s parent company.
“It’s still relatively low right now, but advertisers are increasingly demanding more tools for transparency,” Mahlman told AListDaily. “They want an accurate representation of media impressions and who’s selling them—and they want to safeguard against counterfeit inventory through arbitrage and spoofing. Ads.txt helps.”
The Interactive Advertising Bureau announced plans for ads.txt in May to elevate transparency and prevent the sale of counterfeit and unauthorized impressions in programmatic. Over 90,000 websites have already jumped on board to use ads.txt, up from 3,500 in September, per Pixalate.
Mahlman said ads.txt is a more secure way for publishers to openly identify the platforms authorized to sell their inventory while helping limit bad actors. As more publishers adopt ads.txt and post it to their domains, advertisers can avoid counterfeit inventory and have more confidence in what they’re purchasing.
Mark Gorman, CEO of software company Matrix Solutions, said ads.txt is an important development for publishers and an opportunity to recapture some revenue and profit lost to the likes of Google and Facebook.
“Brands and agencies love buying digital because they believe they are getting direct impressions to the audience they want,” said Gorman. “Numbers give comfort, whether those numbers are really true or reliable. Now brands and agencies are beginning to realize that maybe what they thought they were buying wasn’t so hot.”
According to an Adform study released last week, ads.txt is reaching “universal pickup” as 82 percent of top US publishers, and 70 percent globally, on the Adform adtech platform employ ads.txt.
With transparency and reliability set to improve, Gorman wondered if the cost of digital ad placement will rise as well.
“One could argue that the current price includes slippage for fraud,” said Gorman. “We know today that buyers pretty much buy Google and Facebook. They do this because ‘big’ means better and safer in their minds. As ads.txt brings more reliability across the field, will that ‘bigger is better’ mentality go away when buyers realize smaller, more targeted publishers may offer more dedicated eyeballs?”
GDPR: A Data Subject’s Right To Be Forgotten
GDPR is a game changer for the online advertising industry, according to Tiffany Morris, general counsel and vice president of global privacy for Lotame, a data management platform. Though it’s not the death knell that many are fearing.
According to Forrester, 80 percent of GDPR-affected firms will not comply in time to meet the May 25 guidelines and will risk paying up to €20 million or 4 percent—whichever is greater—of global revenue for the year.
“In the ad industry, reception to this new regulation has generally been negative. Brands and agencies rely on consumer data to develop personal—and ultimately successful—advertising experiences,” Morris said in a statement to AListDaily. “The concern is that increased regulation of consumer data will increase the costs associated with interest-based advertising and potentially decrease the pool of consumer data available to marketers.”
“Progressive processing systems are crucial for GDPR, as one of the key challenges we’re seeing arise is the data subjects’ right to be forgotten,” added Marissa Aydlett, senior vice president of marketing for software company Braze. “In other words, when a user decides that they don’t want a brand or company to use their data, then those brands have to delete or ‘forget’ all of that user’s data.”
Gorman believes that a handful of small-to-medium-sized companies will be put out of business by EU regulators in an attempt to make examples of those entities, but the behemoths operating with billions will barely feel the impact of fines.
Facebook, one part of the ad duopoly, published its privacy principles today—all seven of them—ahead of the GDPR. The launch of the Privacy Center gives community managers and everyday users the ability govern all of their privacy controls.
“We’re designing this based on feedback from people, policymakers and privacy experts around the world,” said Erin Egan, Facebook’s chief privacy officer. “We recognize that people use Facebook to connect, but not everyone wants to share everything with everyone—including with us. It’s important that you have choices when it comes to how your data is used.”
Aydlett said that the challenge manifests itself with this question: how do marketers recognize, or “remember,” that a user wants to be forgotten when we’ve already deleted all of their data to comply with their request?
“Marketers need data tech that is architected around a more progressive modern-stream processing system that can create an interactive feedback loop to immediate action on data for personalization, orchestration, experimentation and security regulation,” she said.
Aydlett added that this progressive processing system will be especially important as the GDPR takes effect. She said that data foundation is critical as it relates to outdated historical data, and marketers should rely on adtech that serves as a partner to enable them to quickly and easily respond to data subject requests—such as the right to be forgotten, data portability and data accuracy.
Although the new guidelines could cause early problems for advertisers, Morris said that GDPR also brings key long-term advertising benefits by raising the bar for opt-in data collection.
“While this may reduce the scale of data collected, it will dramatically raise the quality,” she said. “This means better ad experiences for consumers and stronger ROI. More marketers will realize this as we get closer to the launch date.”
Streamlining With Adtech And Martech
With all of the regulatory forces and moving parts, another theme for marketers this year will be to make order out of the proverbial chaos when it comes to reviewing new methods of advertising.
“When it comes to managing priorities, regulation is not an option. Marketers need to take a pulse on what their business needs are, and what regulation exists or could be approaching. Planning is critical,” said Aydlett. “It’s the only way to be strategic and nimble. Specific to evaluating trends and fads in the adtech world, my advice for marketers is to take a pulse on their business needs and innovation priorities. Don’t chase shiny objects because you see others doing so.”
By blending adtech and martech, Gorman said marketers can better see a more streamlined ecosystem that is designed to cohesively work together, as opposed to a mashed-up ecosystem of forced compatibility across systems.
“It can help make more informed, strategic decisions,” he said. “A collection of legacy systems can cause a ton of confusion based on inconsistent data, and it can make transparency into what types of campaigns are moving the needle nearly impossible to measure.
“We’re going to see adtech able to identify how certain ad spots become more valuable over time, allowing marketers to adapt in real-time. The convergence of martech and adtech will help distribute key messages across platforms and require a data standard to capture accuracy.”
Mobile Native And Video Ads Shifting The Status Quo
By sitting at the helm of Oath’s advertising ecosystem, Mahlman said he’s also seeing an overall industry focus and trend shift toward mobile native and video ads this year, and that marketers will introduce new ad formats that improve consumer experiences and boost engagement as a result.
But since the average US consumer spends a total of five hours a day on mobile devices, Mahlman also wondered why mobile-advertising innovation and content experiences haven’t followed usage trends.
“We know that traditional display ads just don’t play in a mobile environment, and ad blocking is a good indication of how consumers feel about the content,” he said. “Mobile is the most important screen for global audiences, which should make it the most coveted real estate for brands and a place for innovation. The mobile ad format space is also ready for a real shake-up.”
Video will also change the measurement status quo, Mahlman said, with marketers migrating to a performance curve providing clearer intelligence on what works and what doesn’t. This will fuel more credible insight into ROI and elevate transparency across the board.
“It’s chipping away at traditional, flawed measurement systems,” said Mahlman on how the emergence of video is changing the way marketers measure success. “The industry is realizing that it doesn’t make sense to pay attention only to views. The shift away from the strict CPM-focused model—even if that shift has been slow—is a good sign for all parties and will engender more accountability from the ground up.
“Agencies, vendors and publishers are finally beginning to embrace more advanced measurement techniques to provide advertisers more context around performance,” he added. “Expect for that trend to continue.”
Programmatic Rising Substantially
One platform Mahlman doesn’t see subsiding anytime soon is programmatic, which he dubbed the “backbone of digital advertising.”
Forecasting a dramatic increase for automated ad buying, eMarketer predicts that 84 percent of all digital advertising will be programmatic. Despite ad fraud and brand safety concerns—nearly half of marketers don’t know where their ads are shown online—programmatic spend still reigns supreme, as marketers cannot afford a mass-scale pull-out of their decade-long investment in digital.
Mahlman said that while some advertisers are concerned over transparency challenges in the programmatic ecosystem and recent issues have weakened trust, executives are also mindful of the unique value programmatic advertising provides with smarter, data-driven transactions at scale.
“Programmatic marketplaces and DSPs are evolving to bring together the benefits of automation with increased quality controls such as blacklists and whitelists, as well as transparency with well-lit auctions and improved attribution,” he said.
Aydlett said that as the role of the CMO expands to face both regulatory forces as well as traditional trends, the customer experience will be dependent on the C-suite’s ability to utilize the right advertising and marketing solutions to meet consumer demands.
“The customer doesn’t mind if they are experiencing a message from product, marketing, digital or email team—they only expect a cohesive, conversation-like experience with brands that is consistent—not siloed,” said Aydlett. “Given today’s mobile-first world and tomorrow’s ambient computing environments, there is a fundamental paradigm shift happening as messaging experiences blend together.”