Programmatic growth and innovation

Innovation in the programmatic space continues to gain momentum; whether it’s in-game, CTV, audio, digital-out-of-home, or unique collaborations, such as the one between Carbon & SmartRTB with the growing power of 1st party audience data.  For instance, this week saw Channel4 embrace real-time bidding with the launch of its All4 Private marketplace.  This makes C4 the first UK broadcaster to facilitate the purchase of digital ad space programmatically using real-time bidding.

Emarketer’s latest ‘The Ad Platform’ podcast had some really insightful discussion around the trends shaping programmatic markets such as specific growth industries, the impact of identifiers, and momentum in CTV.  Some key highlights include:

• There is some caution from advertisers due to inconsistent recovery from the pandemic across different locations.  As a result, buyers are looking for more efficient and flexible ways of advertising, such as programmatic.
• Opt-in rates for data sharing vary across verticals; with users more likely to consent in verticals such as shopping, automotive, games and health & fitness (i.e. 60-70% range) making them more ripe for programmatic; versus verticals such as education that see <20% opt-in.
• The ecosystem overall is using the next 18 months to build a better data and ad infrastructure based on user opt-in & choice, privacy, and relevant ads.  These shifts will put publishers in a strong position as they own the relationships with their audiences with PMPs, for instance, being a key growth area.

Not everyone wants to reap the rewards of programmatic though.  Reddit recently pulled out of open web programmatic – joining publishers such as South China Morning Post and NY Times in building their own walled gardens.  It’s a bold move from one of the largest websites in the world (52m daily active users) as it continues to scale up its ads business.

Given the growth opportunities that exist in both direct and programmatic, it will be interesting to see how many others will bet on one of the other; for instance, niche publishers may not be able to mass scale general audiences as well whilst following a direct-only path.  Scale was one of the core reasons that Future acquired Dennis recently, growing its US presence, subscription revenue, and added presence in categories such as finance.

Ecommerce rise drives retail media ad spend

According to Skai; ad spend on retail media platforms such as Amazon and Walmart rose 55% year-over-year in Q2 2021 whilst clicks grew 25%.  With Instagram launching ads in Instagram Shop tab and TikTok expanding its Shopify partnership there’s clear signs on the demand and supply side for more ecommerce ads.  The key driving force for this is consumer spending with global ecommerce projected to pass $6tn by 2023 and grow further to nearly $7.4tn by 2025.

There’s going to be a growing array of options for buyers, and opportunities for publishers to identify and monetise their retail audiences.  For instance, Walmart is launching a DSP as it continues to build its ad business, leveraging first party audience data from its 150m weekly customers via its own and The Trade Desk’s inventory.

Cookie going nowhere?!

There’s a bold article in AdvertisingWeek from Adstra CPO, Jason Bier, in which he suggests that “the cookie isn’t going anywhere”.  It’s a brave stance to take but he does make some interesting points around what the recent “delay” represents and how antitrust battles could prevent Google’s deprecation altogether.  Jason argues that better regulation of the third party cookie is required and in doing so would improve the industry as the “vehicle that allows companies to separate personal information from data relevant to monetising an audience”.

Numbers of the week

• As of the beginning of Q3 2021, less than 50% of the publisher professionals Digiday surveyed said they were worried about the loss of third party cookies and their ability to target ads or measure their effectiveness without third-party cookies – versus approx 75% of brands.
• UK digital publishing revenues hit £152m in Q1 2021 growing by 31.9% year-over-year, according to Deloitte/AOP, with digital ads still accounting for the largest share, though subscription revenues grew 49% over the same period.
• 1st November 2021 is the date that China’s new personal data privacy law will take effect.  The ‘Personal Information Protection Law’ (PIPL) will require app makers to offer users options over how their data is or isn’t used, such as marketing and targeting, as well as obtaining consent.
• Archant sees as much as 9x higher eCPMs from consented audiences vs non-consented; according to findings where they used Carbon’s revenue analytics feature to extract & analyze the average eCPMs across a typical 7-day period.

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