In 2021, digital advertising spending has increased by approximately 20% despite the pandemic. The ad market is expected to grow in the upcoming years. The global pandemic forever altered consumer behavior. Mergers and acquisitions, privacy changes, the death of cookies, and the expansion of commerce-based business dominated the adtech industry in 2021.
What do adtech experts predict the future of advertising in 2022? More of the same as these trends of 2021 will continue echoing far beyond 2022.
Privacy and user data protection have become more prevalent than ever. Google is soon going to shut third-party cookies in Chrome, Apple restricted IDFA, and the international privacy regulations (such as CCPA, COPPA, GDPR.) changed advertising routines worldwide.
From 2022 onward, platforms with opted-in audiences will have the advantage of monetizing their first-party data. Additionally, publishers who have just begun to pivot to first-party data are scrambling to meet Google’s latest deadline to discontinue third-party cookies by the end of 2023.
Early adopters of cookie-less advertising can gain access to new audiences, more inventory, and more scaled advertising results. Publishers can also benefit from first-party data sets to create ads with more dynamic messaging tailored to different sections of their audience. However, since the deprecation of third-party data is still about two years away, third-party data-based businesses will continue to do business as usual until the lights go out.
Interesting Read: Impact of Delay in Deprecation Of Cookies By Google On Adtech
Research data suggests that global consumer spending in the top 100 non-game subscription applications climbed 34% to $13 billion in 2020.
A growing number of consumers are opting for subscription services, and that presents a good opportunity to gather first-party data. Companies who aren’t thinking about how they could make a subscription business out of their products should probably start. So, digital formats like Connected TV(CTV), Audio, or video formats are constantly rising. CTV’s immense viewership soon made it the shiny new toy all brands wanted to capture. Advertisers are actively investing their ad budgets into video, CTV, and audio – as the traffic is surging with people spending more time indoors. Publishers must meet changing audience demands and offer the best service possible- maybe a podcast or video content.
Interesting Read: Connected TV Explained: The Essential Glossary Of CTV
Publishers are implementing e-commerce-based methods of tracking user behavior. They should harness the power of first-party data, always put the individual first, and foster collaboration with like-minded partners to connect data and generate insights that can help them survive a new age. As an example, Walmart, which has the most customer data, will hope to capture more of the supply chain, and it will dominate the advertising market as well.
Also, marketers are taking cues from media companies. Over the last few years, the boundaries between the sell-side and the buy-side have blurred. Identifying a marketer from a publisher is going to be very difficult. Reason- Both have the access to create content on platforms like Instagram or TikTok.
Mergers and acquisitions in adtech have picked up the pace in the last few years faster than Usain Bolt’s race. PitchBook data suggests that PE firms were highly active in adtech and have invested in 86 deals in 2021 compared to 43 deals in 2020.
A few examples of the performance marketing-minded deals in 2021 are:
-Dotdash’s purchases Meredith’s National Media Group
-Axel Springer buying Politico for $1 billion
-BuzzFeed’s acquisition of Complex before going public
–Group Nine and Vox Media acquisition
-Publicis Groupe buying Citrus Ad
Industry experts point out that the trend of consolidation will continue in 2022 as well. Viant’s successful IPO opened floodgates as investors realized high returns in the ad tech sector. Many tech giants like Vox Media, Forbes are planning to come up with IPO’s. Before a public offering, acquisitions offer a potential means of raising the valuation of a company. Consolidation also tends to turn publishing platforms into more profitable ones, making it easier for them to invest in improving content and ad-buying.
Consolidation will bring extraordinary change- set structural issues and enhance quality digital advertising. Quality digital advertising coexists with the best media environments. The latter refers to the finest content and user experience. Hence, to achieve it, media owners require to be self-sustainable.
The majority of publishers want to maximize profits, so they may put pressure on middlemen in the advertising supply chain or buy or build their own customized solutions. Publishers have two options – to develop in-house ad serving technology or acquire an adtech firm. Building an in-house adtech stack gives an edge to the publisher to monetize user data. Publishers will no longer require to rely on a service provider to l link KPIs via soon-to-be obsolete third-party data. Although, history proves more success in developing customized in-house technology than acquisition. But the latter addresses a larger audience and has high scalability. For instance, In 2016, AT&T acquired Xandr’s content arm, WarnerMedia, which was never closely linked with Xandr, and ultimately, it was sold to Microsoft.
Brands need to establish a strong foothold in the future under two circumstances -Firstly, vast reach in a given country. Secondly, consistency in standards, processes, data, and business practices.
Lastly, as we look ahead to 2022 and continue at full throttle in the mergers and acquisitions space. Scalability and reliability matter, but in the end, growth dominates. Here’s to more and more companies putting their muscle in the areas in 2022.
Also Read: Clean Rooms Explained: How Marketers Can Prepare For Cookieless World
