On The CMO Agenda: Recalibrating Ad Tech — Where Will Advertising’s Tailwinds Take Us In 2021?

By Aqilliz  

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2020 forced us to act swiftly, think creatively, and embrace flexibility. In just a short amount of time, COVID-19 radically transformed the way we live, work, and shop. A study by Accenture revealed that the vast majority of consumers who have recently adopted digital and omnichannel services expect to continue these activities beyond the pandemic. In response, retailers had to pivot their strategies, turning to technology such as AR-powered shopping experiences to keep consumers engaged and connected.

At the same time, with new developments in data privacy laws, the imminent purging of third-party cookies, and the deprecation of advertising IDs, the digital world is moving ever closer towards a more privacy-oriented future. With 2020 now in the rearview mirror, what lies ahead in the year to come?

The Apple Effect

This year, Apple is set to release its new operating system, iOS14, which will require app developers to get consent from users to access their data and track them across mobile apps and websites. These upcoming changes are likely to have a significant impact across the digital marketing ecosystem, particularly on campaign targeting capabilities which will impact marketers’ ability to target specific audiences using device IDs.

Under the new opt-in protocol, any retargeting of users on a device level will no longer work for those that have opted out of sharing their IDFA (Identifier for Advertisers)—which is a string of letters and numbers unique to each iOS device. This identifier allowed mobile advertising networks to track device users and serve them targeted ads. Platforms like Google and Facebook have other deterministic variables such as email addresses and phone numbers which they can use to identify devices—however, other programmatic platforms that don’t have such information are likely to see a reduction in targetable audiences. According to a survey from MMA Global, marketers expect to lose around 50 percent of identifiers, with measurement, targeting, and attribution among the most challenged.

While there are still a lot of unknowns when it comes to targeting on iOS14, it is crucial for advertisers to do a full internal review of current IDFA use and prepare ahead of the update roll-out. Marketers need to stay agile and adaptable as the industry adjusts to these impending changes.

Unified ID 2.0

2021 will be another year of radical change for publishers, as Google’s removal of support for third-party cookies draws near. As the industry’s most promising solution to this new cookie-less reality, Unified ID 2.0 is fast-catching the attention of players across the advertising ecosystem, with the Washington Post becoming the first publisher to join the initiative.

Representing a better, upgraded alternative to third party cookies, Unified ID 2.0 has the potential to preserve the value exchange of advertising on the open internet, while providing improved consumer controls in an increasingly privacy-first world. Powered by a secured technology that encrypts and hashes a consumer’s email address for their protection, Unified ID 2.0 will make it easier for publishers to build and maintain trust with their users, and offer a reliable framework for user transparency and control. As an open-source solution that the entire digital industry can participate in, Unified ID 2.0 is a remarkable move towards a more collaborative advertising ecosystem.

In addition to such solutions, brands should also focus on building up their first-party data strategy. As the truest form of customer data, first-party data is the lifeblood of any successful organisation. In order to improve targeting efficiency while remaining privacy-compliant, brands have to shift away from their dependence on cookie-based tactics, toward strategies that leverage their own first-party data. In doing so, brands can confidently link various touchpoints, connect the dots between numerous disparate interactions, events, and instances, and create a 360-degree view to really understand who customers are.

The Rise of OTT

With the expanding reach of streaming services, growth in over-the-top (OTT) and connected TV advertising has been one of the great success stories of 2020, and this upward trend is expected to continue well into 2021. According to a study by eMarketer, CTV and OTT ad spending is up from nearly $7 billion since 2019 and expected to reach nearly $11 billion by this year.

Due to massive changes in consumer lifestyles and habits, platforms such as Netflix, Hulu, and Amazon Video have seen a significant increase in adoption thanks to their ability to provide on-demand content. The success of these streaming services indicates a seismic shift in how consumers engage with video content. For the digital marketing industry, the emergence of OTT represents a gold mine of opportunity when it comes to audience targeting capabilities.

All OTT devices are assigned a unique device ID, which gives advertisers the ability to target users by this metric in such environments—this paves the way for more specific targeting capabilities. Furthermore, advertisers and media buyers can take advantage of various parameters such as device type, demographics, geolocation, and even show genre. While still in its early days, OTT advertising holds great potential to enable brands to better reach their audiences.

Building a Future-proof Tech Stack

The digital advertising ecosystem is on the precipice of a major transformation. Cookies are going away, e-commerce has exploded, big tech companies are asserting their market dominance over the industry, and comprehensive data laws are coming into effect the world over. Furthermore, rising consumer expectations are driving the industry towards new future-proofed solutions and opportunities.

For marketers to succeed, it’s essential to use data to your advantage while staying ahead of the compliance curve, augmenting your strategies with revolutionary new marketing tech. Having the right infrastructure in place to deliver relevant and meaningful experiences will be vital in maintaining a competitive edge that will outlast any crisis.

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