Ad Tech Briefing: The ‘plumbers’ posing as the unlikely saviors of the internet

The above is a line we’ve all heard before, particularly during the prolonged (but never realized) saga of the decline of the third-party cookie, and the theoretical upside for publishers rich with first-party data.

The notion resurfaced with the unveiling of Cloudflare’s latest publisher-saving initiative last week (see right), which prompts the question, will this time be any different?     

The slings and arrows of ad tech

To contextualize the scale of the misery that has been the lot of online publishers since the early days of the internet economy, it’s worth going back to the very beginning in the late 1990s and early 2000s.

If the lore is to be believed, this era saw the advent of ad networks, with such outfits generating nothing (other than profit for stakeholders) by aggregating publishers’ inventory and selling it on with a sizable markup. Simultaneously, the dawn of the online social network emerged in the same era, a development that (some would argue) represented a wolf in sheep’s clothing.

While social networks first represented huge sources of referral traffic, algorithm tweaks over the years meant many publishers were left holding the can as Facebook, etc., had to alter course for political expediency. This was regardless of the impact for publishers and other partners that helped them hit scale.  

Last week, it was the turn of Cloudflare – one of the industry’s largest content delivery networks, i.e., a company that helps media-owners deliver content faster and more securely – to show its hand in the poker game that is publisher monetization in the AI era. 

Then came the rise of programmatic trading, a development that promised the rewards of free market trading at its inception. However, for all the developments on the supply side of ad tech, such as curation, the industry consensus is that buy-side platforms are much more successful in driving the cost of display ad inventory downwards. 

None of this is to mention the mid-2010s panic over ad blocking, or the all-consuming cookie conundrum that defined much of the conversations in the early 2020s.

And now, as the media industry experiments with AI, the sector faces its most existential challenge yet, with a player mostly concerned with the plumbing of the internet, and mostly anonymous in media circles,  presenting itself as unlikely saviors. 

Plumbers to the rescue 

For further context, prior to the July 4 break, Cloudflare announced a default setting that blocks AI crawlers from accessing websites without explicit permission, marking a significant step toward a permission-based internet model, with 44 outfits (see image below) on board at launch. 

Digiday readers will need little reminder of the concerns that AI-generated outputs will undermine publisher revenue, bypassing traditional web traffic and compensation models via unauthorized data scraping.   

Cloudflare’s offering also provides AI companies with a structured framework to identify and request access to content, therefore granting website owners a steadier hand over their monetization. As, in theory, this allows them to decide how, and if, their content is used by AI systems for training, inference, or search. Additionally, the update also includes support for a new identification protocol to help website operators distinguish between human users and AI crawlers. 

A rare Google U-turn

Elsewhere last week, other developments seemed to suggest that the pendulum is swinging back in the favor of put-upon publishers. This took form in the case of Bloomberg reporting how Google ended its Recipe Quick View trial after backlash from food bloggers who feared the feature would reduce site traffic and ad revenue by showing content directly in search results. 

Optimists will interpret Google relenting in the face of industry feedback as representative of a new dawn (haven’t we heard that line before?), whereas the more world-weary might say it’s a worrying sign that even Google is now convinced that publishers can’t be salami-sliced anymore. 

However, the scale of support from media-owners, both big and small, about AI and search platforms undermining their ability to monetize content, feels different this time. 

Speaking with Digiday earlier in the year, IAB Tech Lab CEO Anthony Katsur outlined the kernel of this movement, talking through the standards body’s LLM Content Ingest API program, and the extent of the industry’s resolution that enough is enough.  

“The issue with the LLMs is that, while promising, they’re still nascent in their development and prone to mistakes,” he said, explaining its plans to employ APIs to help media owners “tokenize” their output, and negotiate monetization terms with such outfits. 

Describing LLMs as manufacturers of “content soup” with often “problematic” output, Katsur further explained how they pose problems to brands and publishers alike, given the penchant for factual errors in their returns. 

“We already have enough problems with fake news,” he said. “We need a fact-based society, so if you tokenize that, and effectively assign a key that is unique to a publisher, that establishes a source of truth.” 

What we’ve heard

“People say M&A in the media and ad tech space has been dead, but it’s not for a lack of trying. PE firms have been constantly putting new things on the board to explore what can work.”

— Shailin Dhar, of Futureproof TMT, explains to Digiday that the vast majority of corporate development talks have failed to advance significantly in recent months. This comes as speculation as to the future of Integral Ad Science continues to swirl.  

Numbers to know 

• 4%: Microsoft is conducting another major round of layoffs for the second time in successive months, with May’s cuts targeting 6,000 roles. 

• 19: The median number of supply-side platforms per advertiser in Q4, 2025, according to Jounce Media.

• 40%: The amount of agentic AI projects that will be cancelled between now and 2027, according to Gartner.

• 19%: The average drop in CPMs in the CTV space, according to Digiday sources.   

What we’ve covered:

In Graphic Detail: eMarketer forecasts how digital marketing will evolve

In a June 17 presentation, eMarketer’s Zia Daniell Wigder emphasized that, despite widespread hype, AI search ad spending will grow slowly, reaching just 13.6% of total search spend by decade’s end. In contrast, retail media continues to surge, already surpassing social and search in growth rate. Wigder called retail media the “third big wave” in digital advertising, forecasting it could hit nearly $61 billion this year — even amid tariff concerns — underscoring its more predictable, linear ascent compared to the still-nascent, uncertain monetization path for AI platforms.

CMOs say AI platforms’ low profile at Cannes won’t happen again

At Cannes Lions Festival of Creativity this year, AI firms like Perplexity, ChatGPT, and Anthropic maintained a low profile while quietly meeting with marketers to lay the groundwork for future ad strategies. Executives from all three companies held private talks with agencies and brands, signaling eventual monetization plans driven by the high cost of running AI models. 

However, marketers expressed concern that aggressive ad pushes could erode the speed, trust, and utility that made these platforms valuable in the first place.

What we’re reading

The technical feasibility of divesting Google Chrome

A new Knight-Georgetown Institute report finds that divesting Google Chrome is technically feasible, despite Google’s objections. It outlines how Chrome could operate independently with court-ordered support, industry talent, and clear legal guardrails to ensure long-term success outside Google’s control.

Ad agencies’ low growth will drag on as they adjust to era of AI, Barclays says

Barclays downgraded Interpublic, Omnicom, and WPP due to concerns that AI will prolong the ad industry’s current low growth. They cited weak short-term outlooks despite long-term optimism for adaptation.

Marin Software announces plan of dissolution

Marin Software, once valued at $425 million and a leader in ad tech, filed for bankruptcy after years of declining revenue amid dominance by the likes of Google and Meta. The company will be sold to ESW Capital, with the remaining staff retained until the deal closes, with part of the process including its delisting from the Nasdaq.

Lawsuit alleges Microsoft making billions from alleged unlawful processing of data

Microsoft Ireland Operations is facing a landmark High Court lawsuit by the ICCL, alleging unlawful personal data processing via its Xandr ad platform. The case challenges Microsoft’s $10.2 billion search and news advertising business under GDPR and Irish law.

Alliant acquires AnalyticsIQ to scale up Its audience graph 

Alliant, backed by PE firm Inverness Graham, has acquired AnalyticsIQ to enhance its data-driven marketing platform. The deal adds predictive consumer insights rooted in surveys and cognitive psychology to Alliant’s audience modeling capabilities.