IAB hosted its Annual Leadership Summit in Phoenix this month. The event was a gathering of over 1,000 thought leaders in digital media discussing the most pertinent opportunities and challenges of the industry that continues to grow consistently in double digits in almost all global markets.
Among a long list of issues covered, we’re particularly interested in the following three core developments:
- The rise of the Direct to Consumer economy
- Use of data in an increasingly regulated world
- Real use cases for crypto currency in advertising
Realities of the DTC Economy
In the US, reports are indicating that physical retail shopping is down and that shelf space is no longer king for brands. This represents a whole host of opportunities for brands to reach out directly to consumers while creating robust customer profiles and collecting valuable aggregated data in hyper-specific categories.
Digital media and brand consumption are co-related. The rise of native advertising will continue to reflect this trend as DTC brands continue to look for ways to create and tell stories to their customers. A key take-away from these presentations was that customer acquisition costs or the “CAC” are the new rent. Overhead costs are being reinvested in connecting and communicating in a personalized, authentic way to consumers. The best story tellers are winning by significantly reducing their CAC costs and adding real value to the equation.
DTC brands are also injecting new energy into TV budgets. They are experimenting with traditional media in new ways and implementing advanced data usage to get it right.
IAB released its second annual Top 250 DTC Brands to watch Study and have doubled down on focusing on this incredible area of growth from Digital Media investment. There is a playbook emerging and we look forward to presenting the new rules IAB is uncovering from all over the world in this sector with the Canadian digital advertising industry throughout the year.
Privacy Policies EVERYwhere
A major area of discussion was the concern around a “patchwork” of legislations arising in the US on the heels of the California Consumer Privacy Act. Other states are following suit with plans to regulate differently from region to region.
IAB Washington has been very active on this case. IAB has testified to the Senate this month on two occasions to urge a federal solution to privacy legislation. There was a great deal of discussion around the progress the industry has made in the area of self-regulation. Between the Ad Choices program and the technical work being done on the Transparency Consent Framework in Europe to address the GDPR, it is clear that the industry is taking this issue seriously.
Perhaps the most sobering conversations revolved around ethics and our responsibility as the supply chain, to provide the transparency that has obviously been missing from the equation. Consumers deserve more and we need to step up. This means pushing the industry to create solutions that are ahead of the prescriptive regulations that will ultimately follow due to inertia. Ultimately, there was a moment of understanding that you simply cannot avoid the issue of transparency, authenticity and decency – at least not without the cost of longer-term erosion of consumer trust.
Prototyping and MVPs using Blockchain for Ads
This year we saw a marked progression from last year’s theoretical banter about the possibilities that blockchain could unleash to the online advertising industry to actual use cases. There is early activity that is showing great promise in the area of transparency and security for advertisers. Companies like Lucidity are among the early players that are collecting valuable in-market experiences from top brands like Toyota. The preliminary reports are showing a clear improvement in measurement, fraud detection and measurement assurances.
Another exciting area of development is the emergence of blockchain networks attempting to re-write the book on consumer value and transparency. Born out of the early discussions around ad blocking, there is an increased level of activity from these new networks that are pushing to gain traction from the market. A mobile example of this would be Killi, the app that works off a fractional compensation model encouraging consumers to monetize their data in the face of advertisers.
IAB Canada’s Blockchain Committee is just getting started and will be bringing some of these presentations to our members in the coming weeks and months – stay tuned!