Now more than ever, trust is still the biggest issue advertisers face in 2020
As we progress into this new decade, advertising enters a new era.
In our last blog post, we discussed the impact that the coronavirus pandemic is having on the media industry. In this post, we consider how the underlying challenges and opportunities for the industry remain – and are likely amplified.
How data is changing everything
The last few years have been typified by increasing volumes of data, produced at speed, feeding detailed targeting and personalisation.
But just as advertising has become more dependent on data, consumers have become more educated about their privacy – and more concerned about retaining it.
This general trend has been amplified by high-profile data scandals such as Cambridge Analytica, Facebook’s data breach, or the news that Amazon contractors listen to recordings from Alexa.
On the other side of the coin, ad buyers have become warier about algorithmically-driven ad placement, amidst examples of inappropriate placement and fraudulent impressions.
Meanwhile, the sector as a whole increases its reliance on data every day. Squaring this circle is the defining issue to be faced by advertisers and publishers in the coming years.
So what does this new paradigm look like? And how should publishers approach it?
Consumers are concerned about privacy
Consumers have become far more educated about online privacy in recent years, catalysed by a number of headline events highlighting the issue.
The EU General Data Protection Regulation (GDPR) has made many consumers more aware of how they receive content online. Alleged Russian interference in the US election and persistent cries of “fake news” globally have made consumers more wary of online content itself.
It is within this context that 3rd party cookies are beginning their slow swansong. Mozilla’s Firefox already blocks them, as does Apple’s Safari. Google announced at the start of 2020 that Chrome would no longer accept third-party cookies as of 2022.
Until recently the cornerstone of the digital advertising industry, the demise of 3rd party cookies makes 1st party data the most valuable commodity in the market. Not least because 1st party data is usually collected more transparently.
In a survey of 1,000 consumers featured on Social Media Today, 80% of respondents felt that personalised ads for recently discussed items were an invasion of privacy. More than half felt the same way about ads based on search history – and even, that personalised ads were unethical.
However, the majority of respondents found retargeting actions helpful, in particular:
- Product recommendations based on purchase history (67.9%)
- Birthday emails from the company (67.7%)
- Reminder emails about items left in shopping carts (61.6%)
- Ads for recently visited websites (52.4%)
This suggests there is room for personalisation, it just has to be handled correctly.
Advertisers are concerned about ad fraud and brand-safe spaces
Trust and transparency permeate the buy-side as well. In the broadest sense, advertisers favour publishers that have the trust of their audiences. Advertising has always been about renting the relationship between publisher and audience, and the strength of that connection has never been more important than now.
This coincides with concerns from ad buyers around programmatic buying, which occupies a growing portion of advertising spend. The past few years have been dominated by algorithmically-driven programmatic direct. This has yielded two major issues: ad fraud and inappropriate placement
Ad buyers are increasingly concerned that placements bought programmatically do not reach the eyeballs they’re paying for. Instead, impressions from bots eat into their budgets. A parallel concern is ads finding their way to brand-inappropriate spaces.
As such, as we enter this new decade, we are seeing a shift from programmatic direct to programmatic guaranteed. The process grants advertisers greater control over where their ads are shown and whom they are shown to. It also affords more robust transparency concerning who has viewed the advert.
Programmatic guaranteed also cuts down on manual processes and provides the potential for greater efficiency of spend, by virtue of greater audience control.
Trust in the duopoly is eroding
Just as Google and Facebook’s hands are strengthened by the phasing out of 3rd party cookies – each possessing enormous tracts of 1st party data, coupled with far-reaching networks – trust in both organisations is eroding.
As such, there is a widening space in the market for alternative publishers that can provide similar levels of targeting, but are more trusted by their audiences. They can, in theory, offer a more transparent ad buying process.
An example of this in the UK is The Ozone Project – a collaboration between News UK, The Guardian and The Telegraph which aims to offer precisely this. If The Ozone Project is a success, it will likely set a template for other alternative providers.
Another is Immediate Media – one of our customers. Thanks to browsers like Safari and Firefox – which already block 3rd party cookies by default – at one point almost half of their audience were hidden from the advertising ecosystem.
In early 2019, Immediate made their 1st party data available via Permutive, a neutral Data Management Platform. The result was a 135% increase in revenue, as they went from being able to identify 20% of their audience to 80%, and that information could be used to target ads.
This underlines the importance of 1st party data. Successful publishers are those that know their audience inside out and can plug their clients into that knowledge. As such, it will be increasingly important for publishers to find their own, direct sources of customer data.
The advantage is that this information will have been given willingly and transparently, contributing to the trust placed by the consumer in the content being served. A 2019 Accenture survey found that 73% of respondents were willing to share personal information if brands were transparent about how it is used, up from 66% in 2018.
Adopting a new approach
The bottom line is that trust is now the most valuable commodity in advertising.
If publishers can cultivate trust in their brand, their audience will be more willing to part with their personal information, more willing to receive advertising, and more likely to respond to it. That kind of connection is invaluable to advertisers.
It’s just as important for the ad buying process itself to be transparent. So advertisers can trust their ads are being seen by the right people, in the right contexts.
If you, as a publisher, can deliver that? There’s a space for you in the cracks of the Facebook/Google duopoly. The better you wield your 1st party data, the bigger the crack.
Follow this blog series over the next month to find out more about how the world of advertising is changing for media companies. In the meantime, you can download our whitepaper, The New Rules of Advertising: Surviving – and Thriving as a Publisher in the 2020s, or get in touch if you’d like to talk to us about managing these issues at your organisation.