Is Ad Tech Ready for Its Own Roaring ’20s?

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By Sameer Sondhi, Chief Business Officer at Verve Group

We’re on the brink of another Roaring ’20s, both societally and as an industry. Just like the Roaring 1920s, the Roaring 2020s will represent a time of rebuilding, following massive devastation of cultural and industrial pillars long in the making.

The Roaring 1920s represented a period of economic growth and innovation in many arenas, and we have an opportunity to ignite a similar era of prosperity and progress as we move deeper into the coming decade. But it’s not going to happen on its own. Particularly in the ad tech industry, we stand at the crux of a number of transformative shifts right now. Channeling these shifts into positive momentum for our industry and its many players is going to require a collaborative effort.

The Crumbling Constructs of Ad Tech

The Western world’s original Roaring ’20s was sparked by the end of World War I and marked by a boom in modern technology advances, rapid economic growth and accelerated consumer demand. Fast-forward to today, and we find a society ravaged by a pandemic rather than a global war. Every industry is feeling the effects. In ad tech in particular, the pandemic is the culmination of years of mounting pressures and crumbling constructs.

The rate of disruption within the advertising industry has vastly accelerated in recent years, with consumer privacy concerns driving much of the transformation. Fueled by the GDPR and similar privacy regulations in California, India, and Brazil, advertisers are rapidly awakening to a new minefield of legislation. In addition, the ad tech titans are adding complexity to the mix, with Google phasing out third-party cookies on its browser and Apple further locking down the IDFA on iOS 14.

The effects of these changes for advertisers are significant. Needing to return to pre-IDFA ad delivery efficiency, Facebook recently announced that it is being forced to limit its targeted advertising opportunities. The IDFA deprecation is the first of many restrictions being placed on mobile audience tracking. As tech titans are increasingly under pressure for their roles in the dissemination of misinformation and misleading advertising, we can expect additional restrictions to be placed on audience tracking and targeting over the coming year.

The result is a growing concentration of power within the walls of the ad tech giants. Facebook, for example, relies on single sign-on (SSO) to follow its users when they sign in on websites using their Facebook log-ins. In owning Messenger, WhatsApp, and Instagram, Facebook has created a privacy-compliant data flow among the platforms. This allows the ad tech giant to collect information on individual users, helping brands reach target audiences within its walls. Google, Twitter, and Amazon are no different. A collaboration among the giants would enable a massive data marketplace from which all could benefit. However, for obvious competitive reasons, that’s not the way the titans are leaning, as evidenced by Apple’s decision to deprecate the IDFA.

A war among the ad tech giants is taking hold, and it’s one that will lay bare the interconnectedness of the ad tech ecosystem. New synergies and acquisitions will catapult additional competitors to the size of current giants, and quite quickly, the ad tech community will be devalued by the fragmentation and wall-building that prohibits the advertisers who fund it from achieving their objectives.

To realize the possibility of a new Roaring ’20s era for ad tech, our industry will have to work together—because in the end, we are nothing without each other.

Rebuilding Through Collaboration

As this decade progresses, we must unite as a network of industry allies. It’s time to step out of the (historically competitive) box in order to realize the industry-wide innovations that will ensure a bright future for the programmatic advertising industry.

For years, there have been discussions about creating centrally managed identities to combat the need for excessive cookie syncing in cross-device advertising. One of the early initiatives was Digitrust, a company that, like Facebook, relies on login identities rather than the imperfect cookie. Other companies like ID5 and LiveRamp each have their own approaches toward building central identities. It’s incumbent upon the broader industry ecosystem to work with and support these initiatives.

Another solution in securing campaign success is represented in the return to contextual targeting. Contextual audiences can be built based on the type of media or subject matter a person consumes digitally. In-app environments, some of which are less content-driven, contextual audiences can be built based on app categories, location, and keywords.

Centrally managed identities and contextual targeting are just some of the solutions at hand to combat the effects of privacy-driven lockdowns on ad targeting capabilities, and more are in the works. The Trade Desk is working on a cookieless, open-source ID, Google is working on trust tokens, and the Partnership for Responsible Addressable Media has emerged to reform ad tech targeting. The list goes on. These emerging initiatives are focused on uncovering an industry-wide, holistic approach to addressing current and upcoming regulations. The ultimate goal is to provide brands with transparent advertising opportunities, on an international scale, that are compliant with varying data privacy laws on varying devices.

Just as in the 1920s, the 2020s will represent a time of reinvention. We are only at the start of a new decade in which we are confronted with new privacy requirements that we must learn to navigate in a compliant way. The age of rebuilding will soon start, but remember: To rebuild, something needs to be destroyed first—and destruction can be a painful process.

The key to a successful reinvention of our industry will be collaboration with an eye toward sustainability. After all, the original Roaring ’20s offers a cautionary tale in that it ended in the Great Depression. To prevent a similar end, we must work together to own the disruption.

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