As the calendar flips over and a new year begins, we tend to reflect on the past year and think ahead to what is to come. Maybe there is great pride in certain accomplishments, maybe some mistakes to learn from, but there is always a sense of hope for the fresh start and opportunity that a new year may bring. Usually, circumstances don’t change much overnight, but a positive outlook and commitment to improvement can help chart a course for success in the coming weeks and months.
When it comes to ad tech and publisher monetization, 2020 may look a lot like what we saw in 2019. Browser cookie changes and privacy regulations aren’t new, but it still feels like we’re just getting started. Publishers and buyers alike are navigating changes to auction dynamics and dealing with an evolving industry that has recognized the need for better transparency around things like supply paths and brand safety. Some players in the industry haven’t survived 2019, causing significant ripple effects for downstream suppliers—and all signs indicate there’s more of that to come.
Pandemic and politics aside, 2021 is shaping up to be a crucial year for digital publishing. Read our latest blog post about 2021 advertising trends.
So if the past could be a window to the future, what are the ad tech trends we expect to see continue into 2020?
#1 Expanding scope of privacy regulations
In Europe, the General Data Protection Regulation (GDPR) took effect on May 25, 2018, which marked the beginning of what many assumed would become a global movement to improve privacy regulations. The California Consumer Privacy Act (CCPA) takes effect on January 1, 2020, and the ad industry is pushing for a federal US privacy law in hopes of avoiding the complication and confusion of dealing with a host of new state-level regulations, including many already in the works. Regardless of the outcome, the message is clear that in their efforts to deliver relevant ads to an intended audience, players in the digital advertising industry must respect a user’s right to privacy and choice.
#2 Cookies crumbling
Already, browsers like Safari and Firefox have waged war on the cookie, and as a result, advertiser spend reliant on cookie-based behavioural targeting has plummeted in those environments. Google’s actions so far have been more measured and leave room for cookie-based targeting within Chrome, but considering the impact of privacy regulations and fast-emerging cookieless environments like OTT/CTV, marketers will be looking outside the cookie jar to find better solutions for targeting their intended audiences.
#3 New identity solutions
Although privacy regulations and browser changes seem to be attacking the concept of behavioural advertising at its core, it would be a mistake to assume that all user-based targeting is going away. Within the parameters of user control and choice, there is still room for new innovation that enables safe and privacy-friendly user targeting across multiple devices and contexts.
Odds are that innovation will be driven by companies that look to develop and push their own proprietary solutions. Longer term success calls for a more collaborative approach that intends to standardize the concept of identity across major platforms and environments—an approach which puts the user’s choice first and foremost and builds from there.
#4 The return of contextual targeting
If and when behavioural targeting is not an option—whether from an absence of cookies or user consent—an advertiser’s best solution will likely be to focus more heavily on the environment and context in which they wish their ads to be placed. If that sounds something like a return to the “old days” of advertisers paying a premium for an ad on the front page of a trusted publication that reaches their desired audience, is that such a bad thing? With new layers of technical innovation allowing for more sophisticated evaluation of context, it seems reasonable to expect bigger budgets dedicated to this type of targeting. Growth in spend here would reward publishers of quality content, while respecting a user’s privacy and delivering strong performance for marketers.
#5 Major growth in OTT/CTV ad spend
Industry-leading companies are investing more and more in streaming content and platforms, following the path of user attention as the shift away from traditional linear TV continues. The desire to deliver and measure advertising through programmatic channels is stronger than ever and innovation in this space is exploding.
Ultimately, buyer spend will follow user attention, especially as measurement improves and programmatic technology diversifies into exciting new channels. Publishers, even if not playing in the OTT/CTV space, should carefully consider trends in buyer spend when evaluating new formats and channels for both content and advertisements on their properties.
#6 SPO moves from concept to standard practice
As standards like Sellers.json and SupplyChain become widely adopted and enforced across the industry, buyers are poised to have better insight and opportunity to develop optimal strategies for targeting their spend through the most efficient paths.
At its simplest, this may mean prioritization of the most direct paths (with the fewest intermediaries), but smart buyers will also seek to understand and evaluate those instances where an intermediary platform brings unique value to the table. Supply-side platforms and ad tech companies must have a strong story about their differentiation and be able to clearly communicate this to buyers, or risk having spend diverted away through more efficient and profitable pathways.
#7 Increasing push for quality over quantity
The promise of programmatic has always been one of automation and scale. Scale still matters, but not with the same blind eye to quality. Buyers are becoming better educated on the importance and availability of measurement on user attention and engagement, as well as their options for filtering on brand safety and contextual relevance. This allows them to target the right environments to protect their brand and improve each campaign’s performance.
Historically, publishers haven’t always been rewarded for offering clean, brand-safe environments, at least through programmatic open auctions. More advertiser dollars will funnel towards these publishers as buyers get smarter and more restrictive in their targeting.
#8 More direct brand/publisher partnerships
With an emphasis on supply path optimization (SPO) and validation of quality inventory, direct brand to publisher partnerships should become far more valuable for both parties. Ensuring both scale and quality is not an easy balance to strike, but it is certainly much easier when there is a level of trust and partnership that can mutually benefit both sides.
This type of partnership may sometimes take a transactional form where spend is funneled through prioritized channels like direct or programmatic deals, but buyers are also likely to combine the benefits of open auction bidding with a whitelist approach to the publisher brands and supply paths that they understand and trust. Smaller, niche publishers may also see increasing value from working with partners that can help them validate the quality of their inventory and expose it to brands as part of a whitelisted network.
#9 Continuing consolidation in ad tech
The ad tech ecosystem saw its fair share of consolidation in 2019 with several key mergers and acquisitions. The failures of businesses like Sizmek and IgnitionOne have had a significant impact on downstream suppliers, some of which have not received payment for large volumes of purchased ad impressions.
On one hand, the consolidation and simplification of supply paths should mean more money for publishers and companies providing positive value in the industry. However, when this effectively squeezes out some intermediaries whose business models become obsolete, other parties in the payment chain will need to protect themselves when extending credit to upstream buyers. With standards like sellers.json being adopted and a continuing focus on SPO, it shouldn’t come as a shock to see a few more industry players close their doors in 2020.
#10 Supply-side reaction to first-price auctions
Back in May, we wrote about Google’s transition to first-price auctions and new unified pricing rules. That transition was completed prior to Q4, but it’s still a relatively new world that publishers are figuring out how to navigate. Google’s pricing rules made it difficult, if not impossible, for publishers to floor Google’s Ad Exchange demand without also applying those floors to their other price priority line items, including header bidding.
Buyers may have taken some time to adjust to the new auction mechanics as well, but for the most part, the changes are favorable for them. Buyers benefit from simpler, more transparent supply-side auctions, and can apply bid shading techniques to optimize for the lowest cost.
On the publisher side, understanding how to implement and measure the effectiveness of new flooring strategies is still a work in progress. Publishers looking to predict and protect the value of their inventory segments will likely need to worry less about fill rate and instead concentrate on overall revenue over time. Future privacy and identity-related changes that impact buyer targeting capabilities may also necessitate further tweaks to flooring strategies.
What can you do?
As a publisher reflecting on the impact these trends may have on your business, what can you do to chart your path for success in 2020?
Create valuable, original content
This is your area of expertise, so keep focused on it! Experiment with new content formats and build on what attracted users to your property in the first place.
Build relationships with your engaged users
What this means may take on many forms, depending on your property and content, but ultimately there is a value exchange taking place as users consume your content and you monetize their visits. The better this value exchange is understood, agreed to, and supported by your users, the better you can maximize the data they consent to sharing. If your users can trust you and keep coming back again and again for more of your content, you’ll be building something that advertisers want to be a part of too.
Develop strong partnerships to supplement your team
Whether your team is 1 or 100 strong, identify your strengths and weaknesses, and find partners you can trust to help you grow your business. Publisher ad tech and monetization can be complicated, but the right partnerships can help make it manageable and keep you in control of your success through 2020 and beyond.
If you want to discuss ad tech trends or find ways to prepare yourself for 2020, contact success@sortable.com. If you aren’t a Sortable customer but want to learn more about Sortable’s solutions, request a demo today.