What’s the true state of digital advertising - and where is it going?

According to recent reports, the industry’s present - and future - is looking positive. IPA Bellwether analysis for Q2 2021 shows that total marketing budgets have expanded for the first time since the end of 2019, with the strongest upward revisions since Q1 2019, as businesses prepare for economic recovery. This reflects an earlier report from IAB UK, which said annual ad spend had grown despite pandemic difficulties - climbing by 5% in 2020 to £16.5 billion - and AA/WARC estimated even greater near-term gains, with investment set to rise by 15.7% to £27 billion this year. 

While most online media players are now accustomed to a dynamic climate, making sense of changing economic outlooks and industry moves - such as the recent announcement by Google to delay the depreciation of the third party cookie to 2023 - can still be challenging. So, the key questions as we head into a period of relative stability are: where is digital advertising now, and most crucially, which direction should it be headed?
 

Pinning down the status quo 

The reports’ commonality is that the industry has weathered COVID-19 disruption and has since begun to move forward. Although opinions on how fast the recovery is moving vary, the overall evidence points to an upward spending trend after rolling uncertainty has kept belts tight. 

As continued progress looks set to drive this trajectory across the summer and beyond, there is certainly room for optimism about future prosperity. Equally, this is no time for complacency. Digital advertising has proved its flexibility, but that doesn’t mean we can take our foot off the pedal. 

Despite the slight extension to the third-party cookie era, it is clear that the industry still needs to find an innovative use of first-party data. Thanks to advances in predictive modelling, identity resolution and analytical technology, marketers now have the opportunity to better activate their owned data. Although market conditions have stabilised for now, agility remains essential to ascertain a clear understanding of consumer behaviour as it adapts to this new period of the pandemic; marketers must keep focused on staying attuned to their target audience and harnessing capabilities that allow them to optimise campaign efficiency and ROI using granular insight.
 

Best next steps for marketers 

By now, it’s clear that a privacy-first era has dawned, and compliance should be at the heart of every business. Most marketers recognise that the shift towards enhanced data responsibility will bring positive rewards: fuelling stronger relationships, trust and loyalty. Many, however, are still yet to fully utilise the advanced solutions that have appeared to help them keep delivering data-based and highly targeted ads, while maintaining robust user protection.

Built around first-party data, the new crop of privacy-friendly tools is primed and ready to connect the dots between brands, agencies and data providers. The next step for marketers is to start understanding and putting them into action. 

In particular, the key tools that marketers should start tapping into include: 

1. Streamlined data onboarding: Sophisticated onboarding solutions making it quicker and easier to maximise first-party data. By persistently collecting information about past interactions from known users, platforms offer marketers a regularly refreshing supply of detailed insight that informs and enhances future campaigns.
2. Quality first-party IDs: First-party identifiers are gaining traction not only because they present a viable privacy-secure way forward, but also for their unique plus points. With scope to last for years, their longevity significantly exceeds traditional cookies and has the potential to support broader use cases. What’s more, there are already indications that their high-quality will improve large-scale ID matching to exceed previous top rates of 50%.
3. Increasing unification: Interoperable alternatives enable players across the digital ecosystem to follow set standards and apply consistent mechanisms. For instance, looking at the use of sign-in data from consenting publisher audiences can produce hashed and encrypted IDs that drive highly refined ad targeting.
4. Impersonal alternatives: Composite audiences and cohorts present another route for those keen to transition away from user-based advertising. With composites created using multiple consumer data points and traits or segments that are built by gathering users with similar interests, marketers can achieve relevance without personal identification.  
    

Driving the innovation charge  

At Audiencerate, we are committed to aligning industry changes and equipping marketers with the tools and knowledge needed to capitalise on emerging trends, overcome challenges and sustain performance. In part, this involves constant innovation of bespoke solutions, such as our proprietary data graph and cookie-less advertising technology, all while striving for higher transparency - as illustrated by our recently awarded TRUSTe verification from TrustArc. 

But we also believe that ongoing collaboration is paramount to sustain industry resilience and success. For example, working with Weborama means we can meet demand for hyper-precise targeting globally by delivering even more narrowly defined audience segments in worldwide markets. Meanwhile, integrating our privacy-safe data with Azerion’s Polaris platform has produced benefits for marketers and publishers, with the scope to package inventory and apply unified IDs improving simplicity on all sides of the advertising equation.

We’ve also formed an Advisory Board of prominent digital advertising leaders - FreeWheel Co-founder Doug Knopper, former IPG Mediabrands Chief Data Strategist Saqib Massouf, and previous President and CRO of Verizon Media Ralf Jacob - to power fresh thinking on addressing cookie issues, first-party data usage, and seizing connected TV potential. In addition, the Advisory Board is providing strategic support on our current plan in developing a new breed of Customer Data Platform, that will ultimately make marketers’ lives easier by assisting business growth and customer acquisition.

Regardless of the current turbulence, the industry horizon is looking bright. Setting confusing data discrepancies aside, the ultimate picture is one of new possibilities and a return to growth. But marketers can’t afford to let up just yet. Setting their sights on forward-focused initiatives and embracing new technologies will be critical to ensure they hold onto the momentum gained during the pandemic and fuel future-proof success

For more information about how Audiencerate’s solutions and identity hub helps marketers navigate third-party cookie deprecation, activate first-party data and bolster efficiency, get in touch with us here.