As we reflect on 2024 and the forecasts that proved to be accurate or entirely false, we would like to discuss a select few that have sparked our interest over the last 12 months.
Third-Party Cookies
As we approach the end of 2024, we continue shifting away from third-party data-gathering practices and toward strict privacy regulations that are gradually reshaping the sector. Despite starting in early 2023, the United States Department of Justice (DOJ) prosecution against Google is ongoing and expected to conclude in the coming months. The notorious lawsuit addresses Google's DoubleClick and Ad Manager services and touches on allegations of monopolistic behavior in the digital advertising sector. Despite the seriousness of the allegations, privacy concerns are hardly a novel subject. As you may recall, back in 2021, a McKinsly analysis revealed that only 33% of American customers trust corporations to manage their data responsibly (Brodherson, Broitman, Cherok, Robinson, 2021).
As the industry awaits the pending verdict and weighs the benefits of first-party data against the challenges of third-party data, it is critical to continue exploring alternative solutions that meet the forever-evolving industry requirements. It is crucial to keep in mind that while third-party cookies provide a multitude of data gathered from various websites and sources, their use might not always be in line with one's long-term aims and objectives.
Therefore, as programmatic advertising turns toward the application of first-party data, contextual targeting has shown to be a viable solution for problematic third-party cookies. Contextual targeting enables the unobtrusive collection of information, enabling user-specific adverts and, thus, an optimized user experience that benefits both parties. By utilizing contextual targeting, marketers can ensure the continued distribution of high-quality video while adhering to the strict privacy and security laws that have dominated the market in recent years.
Our forecast for the coming year?
We predict that traditional practices will significantly change as marketers gradually switch to first-party data acquisition through creative and unique methods. The transition is inevitable and anticipated to take place in the coming months, regardless of the outcome of the US prosecution against Google.
The Rapid Rise of AI
In our technological landscape, artificial intelligence is becoming increasingly common.
AI has been an important aspect of programmatic advertising since its inception, with tech teams, data scientists, and traders adopting it in order to boost campaign performance. Therefore, while not a novel solution, the last 12 months (particularly the launches of ChatGPT, which have made interfaces and AI-powered technologies accessible to the masses) have returned the discourse right back to AI.
However, the subject remains relevant as the shift from predictive AI to generative AI has changed the programmatic advertising landscape.
During the predictive era of AI, marketers utilized models and statistical insights to assess advertising risks, probabilities, and outcomes. Predictive models powered by applicable datasets anticipated how a campaign would be received by analyzing metrics such as behavioral data, audience segmentation, ad personalization, and other relevant insights. However, with the transition from predictive to generative models, AI can now provide quick, scalable, and diverse creative iterations, allowing our markets to benefit from real-time campaign performance data post-publication. Furthermore, generative AI transforms creative testing and processes, which we believe will be critical to fully integrating AI into all facets of digital advertising.
A recent post published on the Ad Exchanger website addressed AI and its subsequent impact on the programmatic market. According to the article (Bannet, 2024), as artificial intelligence advances and the automation of mundane tasks becomes readily accessible, traders are growing increasingly concerned about the possible threat to their profession.
However, as the last 12 months have shown, depending solely on AI to optimize the efficacy of advertising is a costly error. Take Apple's Olympic campaign as an illustration of how crucial human interaction is to the longevity and performance of a programmed system. That is why a combination of AI and human intuition will be the best approach this year.
With increased time for creativity, we expect AI to greatly impact our sector and those who work tirelessly to preserve it. In other words, a calculated approach to AI strikes the best possible balance between caution, conservatism, innovation, and creativity. As Rotem Shaul, CEO of Primis, writes in From Discovery to Stagnation: AI is Shaping the Future of Publishing, "[...] AI must enhance our pursuit of knowledge, not limit it”.
Curation
Artificial intelligence's emergence and third-party cookies' decline have given rise to curation, which has drawn considerable attention in the past year. Curation symbolizes the shift from buy-side to sell-side data processing, which has increased programmatic purchasing's effectiveness, transparency, and utility.
Despite the success of data adoption through DMPs, it is becoming increasingly difficult to ignore the difficulties that have arisen during this period of growth and advancement. Our dependence on DSP data collection has been influenced by several factors, including a lack of real-time data, excessive reliance on third-party cookies and IDs, data pricing, privacy and transparency concerns, and more.
However, the application of curation (SSP data collection) has successfully addressed the limitations mentioned above. Curation pricing is dynamic, using percentage-based pricing instead of static CPM, which lowers costs and increases flexibility for media buyers globally. Additionally, unlike DMP-based data applications, curation provides comprehensive log-level data and real-time feedback, enabling more profound insights, better performance, and quicker KPI correction. Finally, since data is handled directly on the selling side, curation inherently minimizes data loss, which aligns with the industry's emphasis on privacy.
That said, curation seems to be a natural progression for those aiming to optimize ad campaigns. Curation is cost-effective, dependable, transparent, and actionable, thanks to real-time data and attributions. Curation is essentially our next frontier and the new trending business model for all in digital advertising; it reflects the trend toward increased transparency and efficiency in programmatic advertising. In turn, the sooner the market can adapt to the shifting supply stream, the faster we can expand and evolve into a more secure, dependable, and fair industry.
