The popular advertising platforms are eating up a significant percentage of digital advertising dollars but delivering less real value. Further, continued market segmentation and the elimination of core tools on major ad platforms lead to limited testing and measurement capabilities for marketers. As such, marketers should proactively explore ways to maximize the impact of their ad dollars, writes Ken Harlan, CEO and founder, MobileFuse.
For years, Google, Facebook, and Amazon have been gobbling up the vast majority of brands’ digital advertising spend. In fact, eMarketerOpens a new window found that those same companies capture about 70% of all digital ad spend. If we add The Trade Desk into the mix, that figure inches closer to about 90%. However, the constant beat of privacy regulations, and looming changes to cookie and IDFA availability, cause each of these monoliths to provide less real value to digital marketers.
Stemming from this, there is a rising wave of frustration brewing in the industry. Continued market segmentation and the elimination of core tools on major ad platforms lead to a lack of testing and measurement capabilities for marketers. Subsequently, it is becoming even more challenging to reach key campaign KPIs. Something’s got to give, and marketers should proactively explore ways to maximize the impact of their ad dollars.
Learn More: Why Brands Should Celebrate the End of Third-Party Cookies
Lay of the Land
The industry has thoroughly discussed how Apple’s IDFA changes fundamentally impact the approach to tracking and engaging iOS users. However, a quick but relevant point outlining the severity of this change comes from Industry InsiderOpens a new window . According to them, industry estimates show that 50% to 95% of iOS users will choose to opt-out and limit their ad tracking range. With such a wide gap, we will not know the opt-in rate until after Apple rolls this change out.
Regarding Google Chrome changes, the most important note is that the deprecation will not impact all cookies, only 3rd-party cookies. The full deprecation of 3rd-party cookies by Chrome extends existing limits already imposed by all other major browsers, limiting these large walled gardens’ ability to correlate IDs with information captured within their own four walls. In other words, deterministic ad-buying in walled gardens will skyrocket. But the scale will decrease because these data segments can only activate against the other properties owned by each respective walled garden. For example, if someone searches for auto reviews on Google, an advertiser can no longer leverage that segment on other websites not owned by Google. These audience extensions that are managed by Google and Facebook are large parts of their businesses. This is the only part of The Trade Desk’s business, as they do not own their media assets.
The net result here will be a magnification of current trends: large players and walled gardens have access to deterministic tracking data, but only for their owned & operated properties. However, a critical insight that should not be overlooked is the fact that several of these walled gardens are currently being investigated for antitrust allegations. Suppose these companies are forced to separate or implement stringent siloes across their respective business outfits. In that case, they will be unable to fully utilize data in a way that marketers have come to expect. This reality reduces their scale significantly and increases costs to advertisers even more.
It is apparent that ad spend and campaign approach diversification are truly necessary and welcomed right now.
Reverberations on Practitioners
Besides the dwindling value the major ad platforms provide, we are also hearing about companies’ struggles around engaging new audiences programmatically. This is because there are not many offerings that allow marketers to build truly customized audience segments. In reality, marketers interact with the same bank of consumers or parts of the market. For example, suppose media buyers choose to continue utilizing deterministic IDs. In that case, they are stuck buying audiences from a handful of major players, as described earlier, and those audiences largely remain the same.
On the other side of the coin, for marketers looking to engage audiences outside of the walled gardens, it is common for them to buy audience segments from a few vendors. These happen to be the exact same segments their competition buys if they are implementing a similar strategy. This, again, leads to just targeting an identical and relatively narrow set of consumers.
Another pain point we are hearing in regards to programmatic is the inability to utilize innovative creative. It is far too common for creative assets not to be personalized or to fall short of achieving genuine consumer engagement. So, when you expand on the idea that the same segments of consumers are repeatedly engaged with and add that the creative assets delivered to them are not moving the needle, it paints a clear picture that marketers are missing key conversion opportunities.
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What’s To Come
Because of this, we are seeing a surge of new targeting tools that rely more on environmental context rather than on dwindling deterministic insights. Going hand-in-hand with this is digital marketers’ growing acceptance and interest in probabilistic data. And this makes sense. As the industry faces a decrease in available Unique Device Identifiers and a full deprecation of 3rd party cookies, advertisers must search for alternative ways to identify audiences deterministically. Alternatively, they should adopt new strategies all together.
With the ‘tried-and-true’ advertising platforms providing less value and more headaches, there will be a significant reduction in platforms created for the sole purpose of monetizing audiences. This reality paves the way for a significant competitive advantage, specifically for platforms focused on delivering quality, curated inventory that supports successful probabilistic targeting. Marketers that diversify their ad spend and expand their partnerships outside a core set of vendors will be better positioned for long-term success.