Ad Tech Is Full of Surprises: Big Tech Wins First-Party Data Party; Utah Hops on Privacy Law Train; AI Ad Spend Rises

AdMonsters Wrapper: The weekly ad tech news wrap up
This Week
April 13, 2022
With First-Party Tracking Big Tech Still Wins
Utah Hops on Privacy Law Train
AI Ad Spend Going up
No Surprise: With First-Party Tracking, Big Tech Still Wins

We've heard it again and again, in a cookieless world first-party data will reign supreme and publishers will once again sit back on the throne. (Did they ever sit on the throne?)

However, publishers know better than anyone else that it isn't all that simple.

As publishers gear up to collect and activate their first-party data, they're realizing that achieving scale and accurate audience targeting is a bit more complicated than what it was with third-party cookies. (Third-party cookie be damned, you've outlived your usefulness.)

So when The New York Times wrote that the "unintended" consequences of the ecosystem shifting to first-party data tracking would result in walled gardens like Google, Amazon, and Apple benefitting—B-I-G, ad tech Twitter burst into flames. Unintended indeed!

Apple and Google's latest privacy crusades are less about consumer privacy, and likely more about simply growing their ad businesses. They're not fooling anyone. It's no secret the walled gardens are well aware that the death of 3PC will serve them well.

Even Meta — who, in response to major ad spend losses as a result of Apple's ATT — has now hired hundreds of engineers to develop ad targeting systems. They're also asking small businesses to share consumer data with them to improve ad performance.

At the end of the day, small businesses and smaller pubs will find themselves relying on the tech megalodons in some form or another.

And for the folks who hold The New York Times up as the best first-party data model for all publishers — not all pubs are the same. The NYT's ability to rake in 20% revenue from their first-party data in 2020 only worked due to their surplus of subscribers. As we all know, not every pub gets invited to the gala.
Why This Matters
Advertisers and publishers alike see the value in first-party data — but only a small percentage of each side believes that the other's has a promising future. For this very reason, it has been hard for publishers to find confidence in first-party tracking as a replacement for third-party cookies.

And Google's Privacy Sandbox as a 3PC replacement on Chrome or mobile ID replacement on Android hasn't been met with accolades either. According to Preetham Venkky, President, 22feet Tribal Worldwide and chief digital officer, DDB Mudra Group “This will have a greater effect than what Facebook saw with Apple giving users the option not to be tracked.” He's obviously talking about the big FB (data and ad spend) losses folks.

When it comes to email-based IDs like Unified ID 2.0, many publishers wonder if that particular ID solution can provide them with the control over consumer data that they need to make the "sale." And let's not forget there are at least 80 ID solutions in the market. Do you have to connect to them all?

The fear of not reaching scale or the potential hazards of data leakage is a real fear factor for pubs. That's why testing as many options as you can now, will ensure that you keep your head above water.
Utah Hops on the Fourth Car of the Privacy Law Train
Utah has officially entered the chat.

The state is the fourth in the nation to take a stance against privacy violations with the enactment of the Utah Consumer Privacy Act (UCPA). Signed on March 24, 2022, UCPA is expected to go into effect on December 31, 2023, following California, Virginia, and Colorado. All of these states plan to start enforcing next year.

It differs from other state privacy laws in that it is more business-friendly than its counterparts and provides fewer consumer rights and company obligations.

UCPA applies to companies conducting business in Utah or targeting products or services to consumers in Utah and grossing $25 million or more annually.

It also applies if the company:
  • Controls or processes the personal data of 100,000 or more Utah consumers during a calendar year.
  • Derives over 50% of its gross revenue from selling personal data and controls or processes the personal data of 25,000 or more Utah consumers.
Why This Matters
Another one bites the dust now that Utah has joined the privacy regulation bandwagon.

Overall, UCPA doesn't introduce any new requirements, and though it's quite similar to CCPA, CPRA, CPA, and VCDPA — being compliant for one won't necessarily mean you're compliant for all.

In the near future, we can expect to see more states enforcing privacy laws making it more difficult to comply, as a federal privacy regulation still seems far off.
AI Ad Spend Going: $1.3 Trillion Expected by 2032
Does the AI-everything in ad tech kind of make you feel like we're entering the matrix?

Publishers, always looking to make ad ops more efficient, find that AI-enabled ad tech can sometimes be just bells and whistles but overwhelmingly, it makes a lot of sense. And that's on both the buy-side and sell-side.

Group M recently reported that AI-enabled media will hit $370 billion by the end of 2022.

We all know that AI is a technological advancement that has the power to speed up problem-solving and eliminate errors. But it is also a tool for understanding an audience and its consumption habits. This can provide critical insight to an advertiser looking to drive efficiency in their ad spend.

By 2032 the AI-enabled media ad spend is expected to reach $1.3 trillion. In other words, more than 90% of all ad spend will be AI-enabled. Interesting.
Why This Matters
The significance of AI in advertising continues to increase and has proven its many benefits.

Here's how AI is shifting the advertising ecosystem:
  1. By incorporating AI, machine learning, and big data, advertisers can make wiser budgeting decisions to maximize ROI.
  2. AI technology presents a more seamless user experience and eliminates instances of man-made errors.
  3. Marketers can leverage AI within their influencer marketing campaigns and use AI to generate a content strategy and increase engagement.
  4. By analyzing different data sources, AI can predict a user's next move, making campaigns more effective and actionable. AI creates look-alike audiences based on past campaigns to access new contacts and build the sales funnel.
  5. Marketers can use AI and location data to target people within the vicinity of a store.

And we're sure that we have yet to uncover all of AI's true potential for bringing efficiency to the pipeline.  
Sweet Tweet
We're Moving From Germany to the Holy Roman Empire in Terms of Addressability
"One-third reach is two-thirds not enough" only makes sense in a world where data has free passage.

We're moving from Germany to the Holy Roman Empire in terms of addressability (pic for red).

That 1/3 footprint is going to feel like a pretty big "could've been". - @humanpropensity

Worth a Listen
Your Site’s Privacy Notice Is Scaring Your Customers Off
Advertisers aren't convinced by Google's Privacy Sandbox offering. Time is ticking and advertisers just might not be ready enough for the cookiepocalypse. According to a recent study, it turns out that telling consumers how their data is protected can undermine their trust.
Upcoming AdMonsters Events

Facebook   Twitter   LinkedIn