When the going gets tough for programmatic advertisers, their dollars tend to move toward places they trust.
So when the future of large-scale addressable advertising on the open web was thrown into doubt recently, it was no surprise what happened next.
Advertisers throttled their third-party audience buys and started urging publishers to take more control over how they got someone’s consent for advertising, according to eight ad execs interviewed for this article. To them, the Transparency & Consent Framework (TCF) guardrails erected by the industry to protect someone’s data while it’s being used for advertising across the European Union can’t be relied on — proof to them (at least for now) that audience tracking at this scale is becoming too difficult or even obsolete in many ways.
“We see an accelerated shift in advertiser priorities to ‘active curation’,” said Ruben Schreurs, group chief product officer at media management firm Ebiquity, which also advises marketers on ad tech strategy. “The TCF ruling being one factor, responsible media investment and preventing (inadvertent) funding of disinformation around the current war in Ukraine, advertisers are working with their agencies to radically change their approach to digital media buying.”
Rather than investing broadly through open marketplaces and chasing historical delivery reports for issues to use in exclusion lists, media plans — and audience data activation in particular — are being run in a more considerate manner with “strict selection processes” and more direct dealings with high-quality supply partners, said Schreurs.
Put simply, senior marketers are currently sifting through a technical and logistical quagmire right now.
“Current plans are to use cookie consent systems to only fire cookies or [retargeting] tags the client owns — ie not sync with the hundreds of partners the TCF encourages,” said Rob Webster, chief strategy officer at media consultancy Canton, which is advising marketers on how to adapt their audience targeting strategies to the current situation. “Plus there’s less third-party data buying that relates to cookies and big restrictions on retargeting.”
It’s safer — at least in the short term — for businesses to pause the collection of impression-level data from third-party sources. Senior marketers can ill-afford data privacy breaches these days. Not when so many people are concerned and confused over how they’re tracked online. Needless to say, conversations about TCF between marketers and publishers have been awkward.
“The impetus is falling more on publishers to control and anonymize consumer data given they’re a key collection point for it in the ad ecosystem,” said Sasha Auzins, who leads the global data and identity practice across EMEA at Prohaska Consulting. More than ever advertisers are trying to get closer to that point of collection, he continued.
Call it a flight to quality. Sometimes those quality impressions are found via curated marketplaces of trusted premium publishers, other times it’s by publisher alliances like Ozone Project. Regardless, the outcome is always the same: dollars moving out of open auctions where audience data is either unintentionally shared or used in unintended ways.
“In a well-curated fully-auditable private marketplace there’s less risk of personal data leaking into places it shouldn’t,” said Sam Tomlinson, marketing and media leader at PricewaterhouseCoopers U.K. In fact, they’re increasingly being used to scale audience activation — a benefit the provisional TCF ruling brought into sharp focus for many advertisers, he continued.
Indeed, more of those advertisers are setting up and piloting private data marketplaces, per the ad execs interviewed for this article. These use deal IDs and direct-SSP integrations to support audience targeting across the individual publishers, networks, and the open web.
Expect more of the same. Advertisers have been coming around to this idea for a while. In 2020, private marketplace and programmatic guaranteed deals accounted for just over a quarter (27%) of total programmatic spending, per data compiled by media management firm Ebiquity. A year later that share had grown to nearly a third (31%). Normally, however, those dollars would eventually move back into the open web. The economic incentives of cheap reach and higher margins there often overtook the philosophical argument against doing so. And yet it’s getting harder to justify that rationale. Advertising in those open marketplaces increasingly looks insecure at best, unlawful at worst.
“It’s no longer enough to find your audience — it now matters whether the content your ad is appearing with is in line with consumer values,” said Kate Jervis, growth director at media agency Incubeta. “Brand safety and customer loyalty are becoming increasingly intertwined.”
Which is to say advertisers have had reservations about advertising like this for a while — ever since the platforms started to distance themselves from shady tracking practices to be precise.
Nevertheless, they continued to track and profile people at scale across Europe’s largest markets because the TCF protected personal data from spilling over into places it shouldn’t — at least they thought it did. The Belgian data regulator, which represented the view of the European Union, concluded otherwise. TCF is not fit for purpose under the contemporary regulations, goes the thinking, because it allows a large number of indirect vendors to obtain and transact huge amounts of personal data in a highly opaque environment.
That should have settled the matter: the TCF would either be overhauled or cease to exist. Either way, advertisers would have a clearer view on how quickly they need to figure out how to get accurate audience precision without data from third-party cookies. After all, this type of addressable advertising will eventually go away as Apple and Google put increasingly restrictive policies in place — TCF or not. The reality, however, is significantly less straightforward. The IAB Europe is appealing the regulator’s decision, so it’s not clear how much of it (if any of it all) will stick.
Or to put it another way, advertisers are stuck in a holding pattern, only able to plan up to a point.
Anecdotal evidence across the industry bears this out: there’s no rush from publishers to remove consent management platforms using the TCF system to gain consent while ad tech vendors continue to collect and process data gained from it. The understanding being that they won’t be on the hook for using the current version of TCF to power programmatic advertising, despite it being unlawful, because regulators are unlikely to do anything whilst the IAB Europe tries to bring it into line with the GDPR.
Slowly but surely, advertisers and agencies are starting to form a more sophisticated view of advertising without third-party addressability at scale. Gone are the days when they thought authenticated IDs, which use for instance email and single-sign-on across platforms and publishers, were robust enough to replace third-party cookies in the open web. This pragmatism is also forcing many marketers to reconcile that they’ve been willing to waste large amounts of media dollars on the basis that this is the trade-off needed to reach as many people as possible. At its core, audience targeting is a probability game.
“Ad buyers seemed willing to keep pumping money into marginally better third-party audience targeting in the belief that doing so makes their campaigns more efficient,” said David Kohl, president and CEO of TRUSTX, a programmatic marketplace where buyers only pay for human and viewable impressions on premium publisher inventory. “In fact, the high cost of data reduces returns. With cookie deprecation and stronger privacy regs around the corner, buyers are starting to recognize that other levers, like relying on publisher-defined first-party segments or turning up the dial on viewability, drive far greater returns on ad spend.”
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