This week’s IAB Annual Leadership Summit covered a tremendous amount of ground. Aside from the multi-faceted discussions around solving for third party cookies, there was a pointed focus on the readiness of the industry for the sun-setting of cookies.
Over 25 years, the industry has experienced its share of shake-ups. In all of these cases, whether they were regulatory or technical in nature, we have a history of being caught off guard. And although the deprecation of third party data has been on the horizon for many years, similar to what we witnessed throughout the decade long “year of mobile”, where millions of dollars were being left on the table by late adopters, we are facing latent adoption of first party data preparation. The stakes are higher this time and a study released by IAB on the State of Data this week, reveals a major gap in readiness.
The IAB commissioned study by Ipsos reveals three core findings outlined below. Taking what we have heard from discussions throughout the week we have added some commentary.
- Most data leaders* think their company’s revenue & equity/resources will NOT be impacted by the loss of third-party cookies and identifiers. Where in fact, they certainly will be impacted as investments will be needed to restructure their operations for the post third-party cookie/ID era.
There was a general sense of optimism from the buyside and a level of confidence that the industry is moving in the right direction towards developing a privacy-first supply chain. Some conversations hinted to advanced approaches to managing first party data and astutely differentiated between one-dimensional CRM data and the richer stores of information available from developing higher levels of engagement and multi-touchpoint inputs.
Most of the discussions around “investment” came from the publisher and ad tech side. Publishers are looking into AI solutions to prepare for contextual signalling and are actively exploring federated ID models to access scale. Today’s Google announcement providing assurances to the publisher community that it will be building to support interoperability within their new framework will certainly provide a sense of relief to many small to mid-sized publishers.
Ad tech is racing towards testable scenarios to reach addressable audiences while maintaining as much existing infrastructure as possible.
All stakeholders will be financially impacted as they invest in technical solutions and the operational realities of advanced data management.
- The full potential of first-party data is not being realized. Data leaders need to aggressively collect and then leverage first-party data in a compliant exchange that benefits both the audience/consumers and the brand/publisher.
As the conversations progress towards committing to creating lifetime value models, the buyside expressed a lot of interest in moving towards gaining a much deeper understanding of their customers. Refreshingly, there were a few comments suggesting that while marketers will always need to know “what” to say, there is increasing awareness of when to suppress communication and optimize to cadence based on purchase and engagement signals.
It’s clear that brands have access to tremendous amounts of data. It is also apparent that there is a need for a more consolidated approach to leveraging data. Data points being used within DSPs today will need to be underpinned with the much richer data stores that are currently used more on the marketing side than the media side.
- There is a strong level of concern for the execution of data-driven tasks fundamental to digital advertising and marketing, i.e., targeting and measurement. Data leaders must collaborate with industry partners to implement privacy-first addressability solutions in order to resume those tasks with equal effectiveness.
This issue has commanded an all hands-on-deck approach from the industry. Each of the three scenarios currently on the table (IDs, Cohorts and Contextual Signalling) face varying challenges. While IDs authenticated and inferred face an issue of scale, the other approaches must work to provide reliable measurement models.
The industry is moving at warp speed to re-design the eco-system that marketers need, regulators expect and most importantly, the one citizens deserve. Like all renovations, it’s important to remember that investment is required. Preparing for the future state of advertising will require operational changes, talent upgrades and technical investments. While the industry at large works to develop options for first party data to play within, it is critical for the owners of this data to get more deeply involved in developing signal-ready data pools to bring to the rearchitected eco-system. Currently, it is the one thing we know with absolute certainty.
If you are an IAB Canada member and want to add your voice to the conversation join our working groups where we are discussing these issues and the implications, get in touch!