In 2019, IAB Europe’s Chief Economist forecast that “programmatic is on the path to become the default infrastructure for digital advertising”. It’s easy to understand why. That year, programmatic grew by 88% to reach €23bn. Seventy-seven percent of display and more than 50% of video had been traded through programmatic methods. It seemed that the only way was up for advertisers and programmatic advertising.
Fast forward to 2021 and on the face of it things look a lot less certain. As set out in my previous blog in this series, the withdrawal of third party cookies, which are the foundation of programmatic ad serving and cross-site tracking, is threatening the future of programmatic. Without being able to link visitors to identities, publishers have no way of providing advertisers with the audience segments they need to reach their target audiences at scale and to offer the sort of personalised content that resonates best with consumers.
In the name of protecting user privacy, it seems that the loss of cookies has hobbled both programmatic and the broader digital advertising industry.
However, and to paraphrase somewhat, rumours of the death of programmatic may prove to be greatly exaggerated. As IAB Europe sets out in its latest Guide to the Post Third-Party Cookie Era, “Eliminating third-party cookies undoubtedly impacts multiple stages of the digital advertising supply chain, but suggesting it is going to be death knell to the industry or destroy third-party audiences altogether, is misleading”.
A new model for digital advertising
There is every reason to be positive. If there’s one thing you can be certain of, it’s that where there’s an identifiable market need, innovation follows. As I outlined previously, this innovation is already happening by the combination of two identifiers – a telco-verified ID and a dynamic transaction ID for audience segments.
This “double layer” approach to ID tracking has a number of benefits for advertisers. The big one is simple: they can continue to leverage first-party audience data at scale for personalised, programmatically delivered ads.
This is because telcos can match the verified ID to the user and confirm the publishers’ audiences as they move through the anonymous web, without any transfer of personal data (as is required by privacy regulations like GDPR). The approach enables the creation of uniform dynamic transaction IDs, across both authenticated and non-authenticated site visits and across multiple devices. Meanwhile, telco networks enable the use of a dynamic transaction ID for audience transactions at an individual per ad request level. The dynamic transaction ID is distributed in the bid request and exchanged for the audience response pre-bid.
The benefits for advertisers
Leveraging telco-verified audiences allows advertisers to identify their target audiences, in real-time and at scale using verified data which has been collected and consented to at first-party data owner level. Meanwhile, using the dynamic transaction identifier enables an advertiser to target specific audiences, activate against those audiences with their preferred DSP, and carry out frequency capping, measurement, and attribution all in a privacy-first manner.
This is important for two reasons. First, it ensures that advertisers are using data in a way that is fully compliant with privacy regulations such as GDPR. And given the massive fines associated with regulatory breaches, that’s no small thing. But perhaps most importantly, the approach helps win the trust of consumers. Many of us appreciate personalised advertising, and even those that do not certainly appreciate the free content such adverts fund. The “double layer” approach to audience verification means that consumers can continue to benefit from these fruits of the programmatic tree without concerns that they’re being tracked as individuals, or that big business is acting like big brother.
So, it seems that the future is bright for publishers and advertisers alike, and that thanks to the telcos there will be a strong future for programmatic, personalised digital advertising. Of course, this does beg the question: what’s in it for the telcos? In my final blog of this series I will attempt to answer just that.