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The big challenges and opportunities in AdTech in 2021
March 12, 2021
For the past decade, marketers have been fixated on delivering one-to-one marketing solutions which heavily rely on cookies and personal identifiers to retarget. This model has been built on the back of massive data sets of personal information flowing through the ecosystem, allowing marketers to track people across their entire online life. However, now the industry is facing an impending data drought over the coming years that will change the rules of the game. Evolving privacy legislation and platform changes by Google, Amazon, Facebook, and Apple, means that very soon there will be less data available, not only to brands but to the entire ecosystem.
The question is: How should the AdTech industry react to these changes? Some online advertising lobby groups, such as Marketers for an Open Web (MOW), are advocating that regulators should block Google’s 'privacy sandbox', which it claims will give the search giant even more power over the data that underpins digital advertising. The privacy sandbox would provide a set of proprietary tools to target users with ads according to their online behaviour, but the data itself would be under the control of Google and Chrome.
“It is undoubtedly a power play,” says Kristina Prokop, CEO & co-founder of Eyeota. “The reality is these companies stand in an incredibly unique and powerful position. They have multiple logins across multiple devices for an unprecedented amount of internet users, they hold the keys to identify users and the users say they can’t live without the services they provide, so if these companies want to do that, they can.”
Kristina takes a pragmatic approach to the issue, recognising that the hurdles for user acceptance of terms and conditions are much lower for Google or Amazon, for example, than they are for users who login to a content site.
“It creates an environment where they have a competitive advantage. From a strategic perspective, I can completely understand what they are doing in closing the gates,” she says.
Tech is politics
Big tech has become more politicized over the last decade and the appetite to regulate the big four companies on the internet has grown. There is far more political focus on anti-trust, misinformation, and fake news, not just on data privacy and ownership. The regulatory spotlight is becoming more intense on this sector, including the advertising business, so is there a danger of overstepping regulation in AdTech which could threaten innovation?
“It’s hard to say,” Kristina says. “In theory there is room for regulation to tackle some of the privacy issues, but it could also go too far and start to affect users. The more power companies have, the more they can influence users and what they can do with their data. The question is do regulators truly understand the consequences of their decisions?”
“Some of the privacy issues that have been addressed in recent years were supposed to protect users, whereas what has actually happened is the big internet companies have been given even more power to potentially abuse the privacy of their users,” she says.
“It’s a very delicate situation,” says Kristina. “We need people working on this who truly understand the mechanisms of our industry.”
Innovate and thrive!
Clearly, the AdTech industry must continue to adapt and innovate in this changing landscape and Kristina is confident it can. “Identity plays a big role in innovation by recognizing users on a non-PII basis,” she says. “Cookies were not perfect and what comes next may not be a perfect ideal either. What’s important is that change was happening anyway. As the devices which we consume content on change, there is much less dependence on cookies.”
“The announcement from Google about cookies being removed was frustrating in that it was abrupt and contained no clear direction or path forward. It was certainly a kick in the pants to make the industry start moving!”
The AdTech ecosystem has been provided with many options for operating in a world with less personal data, and various players gravitating around their preferred horse to back. However, marketers need to be alert to both the good and bad aspects of each potential route and avoid falling into pitfalls as the industry recalibrates.
“There is still a lot of uncertainty though. The US, for example, depends a lot on email addresses for ID, but what about the rest of the world? A lot of the initiatives I see right now are more focused on the US, and that’s natural I suppose, because it’s a large part of the market.”
“But when you have an infrastructure the size of this industry, you can’t expect to change it overnight.”
Kristina likens the situation to the auto industry moving from gasoline to electric.
“You need a whole new infrastructure to support it. All the delivery channels and access points have to be built to allow for that change to fully develop,” she says.
Eyeota’s strategy is for identity solutions to be ID-agnostic because the company must interoperate with DSPs, DMPs, Publishers, and offline data owners.
“As a provider of global data solutions, it is not practical or realistic to think that one ID will power our products. In 2019, we had already made the strategic decision to focus on flexibility. Our cross-device infrastructure anchored on our Eyeota ID is live and already interoperating with multiple IDs. However, it will take some time before the market is transacting off of these new identifiers.”
“The most important goal for Eyeota is to be prepared and give our customers and partners the peace of mind that when changes happen, we can ensure continuity,” says Kristina.
What should brands and agencies do next?
2021 is going to be a year for reacting fast. It is time to build a better advertising ecosystem rather than simply settling for second best. That means rethinking how we find, build, and target audiences using data. It also means brands should be enquiring about just how future-proofed their data suppliers are. Clients should be asking: will the partner be able to operate in a post-cookie world and are they at risk of future regulatory or browser changes? Can they offer a credible privacy-compliant ID solution at a scale that will perform well enough to deliver the outcomes they need?
Kristina acknowledges that it is a scary time for many media agencies.
“The reality is until we have really clear answers from Google on when cookies will really disappear and are able to get our hands on testing their alternatives, there will still be lots of question marks. As for Eyeota, the bet we’re placing is on flexibility and methodologies we can deploy globally."
“We don’t know what the future will look like and we’re in the trenches!” she says. “So, for agencies operating on a transactional model, it must be a big concern. Eyeota works on a data model so it’s a bit easier to adapt to change – whatever the media delivery side of the market decides to go towards, we’ll be ready.”
“From a brand point of view, every degree of separation you get from the technology, it becomes more concerning how you’re going to go forwards,” she adds.
“We also have products that help brands solve for these current challenges. How do they activate 1st party data in a privacy complaint and id-agnostic way? How do they scale their 1st party data across IDs? How do they identify the “unknowns”? We’ve built all of these products to not be dependent on any one ID.
The future is global
Kristina says the company is focused on preparation for the future – whatever that may look like. Eyeota is upgrading its platform and connections into other data platforms to enable transactions using multiple IDs.
"Privacy and ID will change the data industry dynamics for sure," says Kristina. There will be smaller sets of data to work with, but these will be more precise, more condensed data sets. Brands will have to be smarter about using online and offline data too because advertising isn’t always about the customers you already know. “You have to go out and drive new business, and find new customers,” she says.
“At present there is no way for a brand to utilise first party offline data outside the USA. That’s why we’ve invested heavily in a suite of on-boarding products which will allow us to connect with companies like Experian and GfK to help brands use offline data around the world.”
“We’ve invested in scale and can provide the market with global solutions that no one else has. So, big global brands who want to deploy the same data strategies all over the world can come to us and we’ll help them use their data everywhere,” says Kristina.
Advertising doesn’t need to be one-to-one to be personal. Neither does it have to deliver solutions that compromise on performance, scale, or privacy. It’s time for marketing to look to the future, rather than continuing to dig in the past. However, we are facing an impending data drought, beginning imminently, and accelerating over the coming years, that will change everything. Evolving privacy legislation and platform changes by the likes of Google, Facebook and Apple means that very soon there will be less data available, not only to brands but to the entire ecosystem.
2021 is going to be a year for marketers to reconsider how they find, build, and target audiences and how they embed customer insight into the heart of every brief. It also means brands should be enquiring about just how future-proofed their suppliers are. Will the partner be able to operate in a post-cookie world and are they at risk of future regulatory or browser changes? Can they offer a credible privacy-compliant solution at a scale that will perform well enough to deliver the outcomes they need?
With Eyeota, the answer is yes we can!