Magna's Shocking $300 Billion EOY Ad Spend Prediction; Privacy Lawsuits Lobbed Left and Right

By Andrew Byrd, Yakira Young, Lynne d Johnson October 05, 2022

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October 03, 2022

Magna's Shocking $300 Billion EOY Ad Spend Prediction

Privacy Lawsuits Lobbed Left and Right

Full Throttle's Audience Flume Offers First-Party Data Generation

Around the Water Cooler

Magna Predicts Shocking $300 Billion EOY Uptick in Ad Spend

Image sourced from wsf-f

According to new data from Interpublic Group of Cos.' Magna, U.S. ad spend might be shifting to a positive trajectory. Their new statistics say the U.S. advertising industry will surpass $300 billion in ad spend for the first time ever. This puts nationwide revenue at a 9.8% year-over-year growth rate for 2022. That's even with July reportedly being the worst month for ad spend in two years.

Researchers have linked the sudden uptick to three major events this year: the Fifa World Cup, the Winter Olympics, and the midterm elections. All of these events have circulated billions of seasonal dollars into ad agencies. While this news may be surprising to many in the industry, Manga’s executive VP for global market intelligence, Vincent Létang, thought otherwise.

Létang posited that the industry knew that ad spend would take a bit of a hit during 2021 because of COVID restrictions, but that their projections for 2022 have always suggested growth. In fact, at the end of 2021, Magna predicted that ad spend would have a 12% growth rate this year.

On the other hand, Magna’s predictions for 2023 ad spend growth is more reserved. Due to the lack of major events like the ones that occurred this year, Létang asserts that the growth will not be as significant.

“We don’t anticipate a decline, just a slowdown,” said Létang. “We are confident some verticals will be driven by organic growth factors, mitigating the economic slowdown.”

The industry’s general sentiment around the trajectory of ad-based revenue has been negative. Most researchers are saying that U.S. ad spend is on the decline. In fact, a looming recession has led some industry professionals to turn towards revenue diversification to mitigate that decline.

Still, recent projections suggest that ad spend, nationally and globally, might be on the up. Magna predicts that global ad spend will hit around $800 billion by the end of 2022. In fact, in recent major news, Hearst saw a major revenue bump. There was a sudden growth in their ad business over the past two years. Last year their ad-based B2B revenue was at $11.9 billion, whereas this year they predict a slight increase to $12 billion.

Despite struggling a bit with their traditional media business, diversifying their revenue with specialty media, data, and software businesses have allowed them to flourish. This part of their revenue now represents over 40% of their overall revenue whereas it represented only 10% nearly a decade ago.

While many are worried about the looming recession, recent data might give the ad tech industry the positive boost it needs.

Privacy Lawsuits Lobbed at Ad Tech Left and Right

In September alone, 11 privacy lawsuits were filed against companies for invasive targeting practices including Zillow, Expedia, and Chewy.com, as well as some ad tech companies that are also under fire.

Many companies facing ad tracking lawsuits argue that the practices they are being sued for are nothing other than the laws of the land; in other words, these practices are common across the ad tech industry and the open web.

Examples of lawsuits currently in action:

The Federal Appellate Court revived a 2019 lawsuit against ad tech firm NaviStone. The company replied that the decision "will reverberate nationally and could lead to significant civil liability and possibly even criminal charges to countless modern commercial, education, and governmental websites throughout the United States."
Remember the Kochava FTC lawsuit that we heard about last month? While Kochava is being sued for selling data used to track customers' locations (including very personal health info), they claim that the FTC "has a fundamental misunderstanding of Kochava's data marketplace business and other data businesses."

The overturn of Roe v. Wade sparked this recent privacy crackdown leading the federal government to place the advertising industry under a microscope. Since Roe v. Wade was overturned, there was a series of high-profile incidents where women seeking abortions were exposed. This turned the FTC's eyes on to the level of detail included in the information advertisers collect about citizens.

Data privacy and the third-party cookie conundrum have the industry in a tizzy, scrambling for solutions. For example, NBCUniversal is utilizing anonymized or privacy-oriented data sets. However, when you think about it, is the data REALLY anonymized? A 2019 European study pointed out that they could accurately identify users from anonymized data due to geographic indicators. The same questions could be raised about data clean rooms and their ability to leak data or even ID solutions or Google's Privacy Sandbox. Just how private or ethical or any of these practices?

Perhaps the impending American Data Privacy and Protection Act, with its extreme bipartisan support, could be the answer to all of this confusion. Though some high-ranking officials are still holding out on supporting the measure. But as litigation continues to stockpile and with privacy constraints mounting, the industry needs a legal decision that both protects consumers' rights and enables the monetization of the open web.

Full Throttle Tech’s Audience Flume Offers New First-Party Data Generation Tool

Another day of privacy regulations in the ad tech industry breeds another possible solution for collecting user data with first-party data. While the oversaturation of theories and practices can be overwhelming, Full Throttle Technologies’ API product, Audience Flume, has been in development for five years and has so far proven to be effective for its clients.

Full Throttle Technologies has sold Audience Flume quietly to agencies and publishers for quite some time, but they have just started their public rollout. Their clients work within the world of beverage, auto, and B2B marketing.

According to the company’s Chief Product Officer, Amol Waishampayan, the technology works by, “latching onto the browser cache of a client’s website to generate a household profile that enables them to create audiences and establish downstream processes on top of an open addressability framework. Afterward, the data feed can be used to generate privacy-compliant campaign tactics including targeting, measurement, and attribution.”

Some industry professionals have already lauded the success of Audience Flume such as Sam Nehme, senior partner and performance lead at GroupM’s Mediacom. He works for a major beverage company, presumed to be Coca-Cola, and asserted that he hopes the technology is adopted on a wider scale at his company because of the success he’s had with it.

Ethically collecting first-party data has become essential in the ad tech ecosystem especially since Google announced the deprecation of the third-party cookie. Even though the third-party cookie going away has been delayed, it is still important for the industry to consider the ethics behind aggregating users’ data. Oftentimes, first-party data has been the solution to the industry’s data collection problems. But the question remains: Can it scale?

There are a host of examples to back this claim including the implementation of Alternative IDs, data clean rooms, retail media, and more. While these solutions may offer slightly different technologies, all of them consider the turbulence the ad tech industry has suffered over the past few years dealing with new privacy regulations.

While some ad tech professionals may praise some technologies over others, many in the field believe that the final answer to our data collection problems will be an amalgamation of solutions. Full Throttle Technologies, Audience Flume, may be the solution for some companies while Alternative IDs may be the solution for others. Companies must assess for themselves exactly which solutions work best for their individual business.

Around the Water Cooler

Image sourced from wavebreak3

More news to look out for...

IAB Tech Lab's Global Privacy Platform (GPP) has been finalized and is ready for industry adoption, but is it fully baked? (IAB Tech Lab)
So many gray areas surrounding in-app advertising, especially when it comes to mixed-age audiences which makes gaming advertising confusing AF. (MarketingDive)
Ecommerce and retail media are booming, but industry experts warn they'll have big hurdles to face come 2023. (The Drum)

GPP Release Causes Frustration

While I understand the pressures that are no doubt in play to release GPP, it's extremely frustrating to see this 'finalized':

- this late in 2022
- w/promise of even more complexity in the string & t/f greater fingerprinting threat
- positioned specifically to replace uspapi

Scoping The Ad Tech Ecosystem, With Brian O’Kelley

Apparently, roughly one gram of carbon is produced every time an ad impression is generated. Well, last year, industry vet, Brian O’Kelley, seeing his part in this problem, co-founded a new startup, Scope3, which helps ad tech companies monitor and reduce their carbon emissions.

AdMonsters recently covered a recent study by Sharethrough providing a substantial explanation of how the ad tech industry can improve its own CO2 emissions.