Here, There, Everywhere, It Is Cross-Screen Advertising!
The landscape of advertising has changed beyond 360 degrees and especially the online marketing ecosystem. Cross-screen advertising is one such opportunity for advertisers and marketers to strengthen their services. Today, consumers are spoilt for choices, when it comes to content options. The number of screens and devices to view content is just increasing for consumers -TV, connected TV, mobile, OTT, laptops, and more.
Cross-Screen Advertising: Dismantling The Concept
Switching between multiple devices is the new way of content consumption. Here are some compelling statistics that an average person spends per day on different devices:
- over 195 minutes on a smartphone;
- 135 minutes on a computer and,
- 85 minutes on a tablet
So, why target a particular audience only on one platform?
Through, cross-screen advertising, advertisers have the advantage to reach the larger targeted consumers via multiple screens to drive sales, increase brand awareness, generate leads, and more. A question that is frequently discussed is addressable TV advertising is growing and is also targeted, data-driven, and provide invaluable insights to advertisers. How does it differentiate from Cross-Screen addressable advertising?
To put it simply, cross-screen addressable advertising is perfectly complementary to TV. It is scalable and offers has ample opportunities for advertisers to deliver relevant content on the go.
Say, for instance, an advertiser shows an ad on TV and then on the mobile with a CTA to visit the store nearby for an electronics brand. The result was actual visits to the store and purchasing the product. This type of advertising serving an engaged audience makes complete sense.
A targeted, well-developed cross-screen advertising can significantly increase sales. Analysis by 4INFO suggests that more than 90% of advanced cross-screen TV advertising witnessed online sales lift. Further analysis states, for retail, combined TV and digital campaigns resulted in a sales lift as high as 129% and a 146% increase in brand penetration.
Even though cross-screen addressable advertising is catching up and allows you to follow the audience from TV to the desktop to mobile. Marketers are already experimenting with cross-screen marketing campaigns but the challenge lies in tracking and measurement.
Cross-Screen Advertising: Measurement & Impact
Cross-screen advertising measurement has no specific definition. It simply means analysis of the consumer behavior and tracking of video metrics across devices-Mobile/Laptop/Tablet/TV/ Advanced TV and some cookie-based methods.
Cross-screen advertising measurement is crucial for marketers as they seek to comprehend how consumers have changed their viewing habits amongst multiple devices. The cross-screen measurement starts from device-level as multiple identifications are required. It will guide the marketers to know the link between the devices and unlock the potential with the proper use of algorithms.
Cross-Screen Advertising Measurement is based on:
- Content Gazing
- Multitasking Information
- Discovery
- Connection
- Sharing
The cross-screen targeting depends on the above factors as consumer utilizes each device differently while consuming the content online. Louqman Parampath, vice president of product management – advertising, at streaming-device maker Roku said to Beet,
“If you go to more performance-savvy advertisers and performance-savvy customers, the questions are about understanding cross-screen exposures to business outcomes or KPIs that the marketer may need.”
AdTech companies like Roku, Xandr, Trade Desk, Samsung Ads, and more are coming up with different cross-screen advertising measurement solutions to understand online campaign performance across different platforms. Whereas, Neilson already offers a comprehensive solution Digital Ad Ratings (DAR) to measure digital audience demographics across mobile, computer, and connected TV in a way that is comparable to television measurement.
What makes a good Cross-Screen Measurement Partner?
With every marketing dollar being scrutinized, it is essential to note that the cross-screen TV measurement partner is transparent. The key to precise measurement lies in a partner who leverages a combined TV dataset with cross-screen identity. For instance, a combination of STB data with ACR will provide a more comprehensive picture. Further, linking to CTV publisher ad exposure data gives accuracy and privacy.
(eMarketer estimates advertisers will increase their upfront CTV video ad spending by almost 50% year over year to $4.51 billion.)
Related Article: All You Need To Know About Connected TV Advertising!
A good measurement partner can capture all platforms and provide a holistic view of video investment – Linear, CTV, VOD, addressable and more. Here are a few questions that need to be addressed for a good partner:
Cross-Screen Measurement: The Advertiser’s Narrative
Cross-Screen Measurement gives way to advertisers and media owners to collaborate over data and flexibility. Here are some factors to help the advertisers to always be on cross-screen advertising measurement.
- Right Target: With cross-screen advertising and the right selection of targeting options, advertisers can reach millions of consumers. An advertiser can also target the same customer on different channels.
- Holistic approach: Advertisers should have a holistic view of the cross-screen investment. They should create an idea to work combined on TV plus computers, mobile, streaming, or advanced TV to set success through cross-screen advertising.
- Scalability: An advertiser should be clear with a plan to scale the business. They should be able to link cross-screen measurement with sales data and answer the question of whether the total video investment is driving the bottom line.
- Tracking and measurement: Advertisers should be able to track the KPI’s. They should have the know the targeted audience and the time of their activeness to promote the services/products. This will help the brand to build a loyal customer base.
- Cross-screen marketing: Advertisers are well-informed that it is time to reboot traditional practices. It is time to innovate to reach a larger audience. The cross-screen marketing campaign is reaching more customers on all devices. Today, consumers have a fragmented attention span. So, cross-screen advertising allows reaching wherever their fragmented span lands them. For instance, if the consumer is using a tablet in the evening while watching TV, target your campaign in both places. Carry an integrated campaign across different screens.
Let us understand the magic of Cross-Screen Advertising with the below examples:
1.M &M – Come Together
A classic example of a cross-screen marketing campaign that combined traditional and digital channels for improved reach and engagement. The brand aired a TV ad during the Super bowl and also promoted the campaign on social media platforms. The commercial is titled ‘Come Together ‘ shows relatable scenarios of social faux pas and the people in them choosing to make it better with a bag of M&M’s.
https://youtu.be/lKUcHcizEMc
The brand had also shared a teaser of the ad on social media and allowed people to hop on a Zoom call with one of its characters Yellow to watch the ad before the event. It also continued to promote the campaign after the event by sharing scenes of the ad and reactions to it.
Using a traditional TV ad allowed the brand to reach a wider audience as it aired during the biggest TV ad event of the year. The cross-channel campaign allowed the brand to leverage both TV ads and digital ads viewed on mobile, tablet, or desktop.
2. Starbucks- Frappuccino Happy Hour
Starbucks has always made the best use of marketing technology. Their cross-screen advertising ‘Frappuccino Happy Hour’ was promoted on both website and TV during a ten-day campaign. The app was also in action, all leading a message for the user to text ‘Wohoo’ with their mobile devices to know more.
The multiple uses of screen- website, app, and TV ensured a large number of people can access the campaign. The campaign leveraged Gen Z’s “fear of missing out” by offering exclusive information only to those who texted them.
3. Luxury Automaker :
A campaign for the luxury automaker focused on specific high-end models. The campaign targeted households anonymously which was the target market for the luxury brand. Addressable ads were offered to the consumers on their mobile and TV. The results were brilliant. As per Adage, the brand witnessed an 87% lift in sales for that model among households that received the same ads on both platforms.
Cross-Screen Measurement: The Media Owner’s Narrative
Media owners (sellers) play a role of a trusted cross-screen measurement partner who manages the video investment of an advertiser holistically. They should have a clear idea of their inventory portfolio to help better package cross-screen impressions. Here are some factors to help the media owners to always be on cross-screen advertising measurement:
- Optimization: Media owners should recommend optimization monthly or quarterly by analyzing campaign performance across all channels and platforms to minimize the CPM pressure. For instance, adtech companies like LiveRamp drive a seamless workflow for activation and measurement. They provide comprehensive data, the audience for activation, visibility into TVs per household to measure from, and consistent matches for measurement. The visibility and data will help media owners and advertisers to make holistic optimization cross-screen strategies.
- Strong partnerships: Data is the epicenter of cross-screen advertising measurement for buyers and sellers. Data collaboration will help to build partnerships between advertisers and media owners and set future audience strategies to get them a competitive edge. With cross-measurement, media owners can inform the advertisers about the performance metrics and support them to allocate budget optimally across the portfolio to gain maximum results.
- Know your inventory: Monetize the impressions in the right way of knowing your inventory within the entire portfolio.
- Interoperability between data-sets and systems: A cross-screen measurement plan encourages interoperability between data and systems. Interoperability means choosing a solution that can collaborate with other tools. Leverage identity-informed data sets for better forecasting and managing business at a strategic level. Followed by that, better ad sales profit and losses, regularly measure across all screens and streams to comprehend the impressions across the portfolio.
Wrapping Up
The sky is the limit for cross-screen advertising. With cross-screen advertising, you can deliver the right ad to the targeted audience on the right device while measuring the return on the ad spend on each screen and across the screen. The cross-screen future that the advertising industry estimated has arrived and the roads are being paved for it. There is an immense opportunity for advertisers to reach a wider audience on multiple devices for content promotion. With programmatic evolution, new technologies are being worked out to enhance tracking users across devices – desktop, CTV, TV, tablet, mobile, and more.
The cross-screen advertising measurement will become more advanced and sophisticated that will ensure more transparency and data sharing. This will help advertisers to gauge the performance of their cross-screen advertising campaigns.
Impact of Delay in Deprecation Of Cookies By Google On Adtech
Google delays the Cookiepocalypse but should not be taken as a time to pause!
Google announced a nearly two-year delay to Chrome’s deprecation of third-party cookies to increase user privacy in its blog post. As the original 2022 deadline approached, it became clear that more time is needed to thoughtfully design privacy-first solutions without sacrificing ad-funded web. In its updated timeline for Privacy Sandbox milestones, Google announced,
- It plans to develop a more rigorous process including extensive testing and deploy the Privacy Sandbox proposals across key areas, like admeasurement, targeting, and fraud detection. The goal is to deploy these by late 2022, scale adoption, and then phase out third-party cookies Chrome over three months in 2023 only after Privacy Sandbox Google has been fully tested and deployed.
- Google plans to conclude the origin trial of Federated Learning of Cohorts (FLoC) and incorporate feedback received in the first implementation in the future testing.
Is this announcement a relief for the adtech industry? Well, it is a much-needed reprieve for publishers, marketers, and the adtech industry. The adtech industry should not pause the move away from cookies but continue to search for third-party cookies alternatives. Marketers must continue first-party-based targeting, contextual advertising, and a transparent, privacy-friendly future.
In this blog, we take a deep dive to learn about first and third-party cookies and how does the delay affects the adtech industry.
What is a Cookie?
In simple terms, it is a packet of data in a form of a small text file that contains user information and activity stored within the browser or within a subfolder in the user’s device.
First and Third Party Cookies Explained
There are two types of cookies.
- First-party cookies are stored directly on the website like individual information. The information is never shared with other parties outside the website.
- Third-party cookies are set by a third-party server (adtech) using a code placed on the web domain. The data collected on third-party cookies are accessible on any website using the third-party server code. An advertiser can track users across the internet and target advertising wherever the user goes. They are mainly used for remarketing by advertisers.
Google and Third Party Cookies.
Why is Google doing away with third-party cookies?
Safari and Firefox had blocked third-party cookies settings and Apple claimed a competitive advantage by positioning itself as a privacy-first tech company. According to Pew Research Center, 72% of Americans worry that most of what they do online and on their cellphone is being tracked by companies and 81% believe the risks outweigh the benefits when it comes to collecting data. Google in the 2020 blog post wrote,
“Users are demanding greater privacy–including transparency, choice, and control over how their data is used–and it’s clear the web ecosystem needs to evolve to meet these increasing demands.”
Therefore, Google planned to phase out 3P cookies eventually to avoid any negative impact on the online advertising business.
Even though Google isn’t the first web browser to block third-party cookies but the biggest. Techadvisor reports that Google Chrome accounts for more than half of web traffic. As Statista reports in 2019, Google Chrome made up more than 56% of the web browser market.
How does third-party cookies death affect the ad business?
The death of third-party cookies will have a significant but limited impact on the digital ad business as Google moves a step forward for privacy. Google will collect data and use it to target ads. However, it won’t allow cookies to collect data and sell web ads targeted to individual users browsing activities. This means the raw data like clicks and conversions will be available but specific data points used by advertisers for targeting will be lost. Therefore, ad companies will have to find third-party cookie alternatives to target users.
Options For Ad Companies In The Post-Cookiepocolypse World
There are three major options for the companies to show relevant ads and measure the effectiveness of the campaign in the absence of third-party cookies.
- Google is championing technology developed through Privacy Sandbox-a browser-based tracking model. Federated Learning of Cohorts (FLoC) is an internet-based advertising technology where Chrome will track user’s browsing habits across the web and categorize them in various cohorts alongside audiences with similar interests. Advertisers will show ads to cohorts rather than individual users. The tech giant claims to expect its FLoC technology to be at least 95% as effective as cookie-based advertising — but ad-tech players still have concerns.
- Publishers and Brands are building their own models based on first-party data. Large-scale publishers like the New York Times, Vox Media, and others have already launched their own ad targeting systems based on first-party data.
- Some brands from the ad tech industry are developing identity-based tracking similar to cookies. The leading ad tech company Trade Desk has developed a prominent solution Unified ID 2.0 which has received support from ad tech companies and groups.
Why Has Google Decided To Delay The Deprecation Of Third Party Cookies?
The complexities of removing cookies and delay in implementation of its own Privacy Sandbox system that includes FLoC technology resulted in the delay of deprecation of third-party cookies.
Another reason to phase out by the end of 2023, is the regulatory scrutiny from both sides of the Atlantic. The UK Competitions and Markets Authority (CMA) investigation has raised concerns about whether the new cookie-replacing technology, which categorizes users into ‘cohorts’ is giving an unfair advantage to Google over its competitors. The CMA is investigating if this move by Google can result in advertisers shifting budgets into Google Ads. Vinay Goel, Privacy Engineering Director, Chrome, said:
“We plan to continue to work with the web community to create more private approaches to key areas, including ad measurement, delivering relevant ads and content, and fraud detection. Today, Chrome and others have offered more than 30 proposals, and four of those proposals are available in origin trials. For Chrome, specifically, our goal is to have the key technologies deployed by late 2022 for the developer community to start adopting them. Subject to our engagement with the United Kingdom’s Competition and Markets Authority (CMA) and in line with the commitments we have offered, Chrome could then phase out third-party cookies over a three-month period, starting in mid-2023 and ending in late 2023.”
Should Marketers Change Marketing Strategies Over the Delay?
In response to longer timescales, marketers should not get distracted from the larger context of the moment. The industry is gradually transitioning from opaque consumer data collection to privacy-focused and transparent solutions.
It is essential to understand that there is a delay and not a change in direction, hence stay focused to find authenticated solutions in parallel to cookie strategies through 2022. The next two years are crucial as it gives marketers and the adtech industry time and space to test, and iterate solutions to build consumer trust.
Marketers should continue future-proof targeting and measurement strategies, prepare a sustainable approach for a data deprecated future and invest in first-party data solutions to maximize revenue and personalization.
Expert Chime In On The Recent Change
Some expert opinions from across the adtech ecosystem as quoted by Exchange Wire.
- This news appears to have been met with a huge sigh of relief from the advertising industry, as well as Wall St where the share prices of major DSPs and SSPs saw big spikes. – Rob Hall, CEO, Playground XYZ
The ad tech social sphere was immediately alight with commentary, with a lot of people in the industry proclaiming how nice it was to have more time to work on solutions. But I feel they’re all missing the point: we need to depart from the reliance on third-party cookies as soon as possible because consumers have made their position crystal clear: they don’t want to be tracked around the internet. The fact that Google has delayed these changes due to the ad industry not being ready shouldn’t be met with relief. It should be met with a humble acknowledgment that, if you’re still reliant on third-party cookies, you’re increasingly behind the times. This delay isn’t a lucky break. It’s a stay of execution.
We need to re-shape advertising to not be so reliant on following people around the internet and instead use techniques that reach consumers – on their terms. We think the future of advertising is cookie-less and, largely, identity-free. Consumers have already made it clear that this is what they want, not in two or three years’ time, but today. So, yes, you could keep using third-party cookies for a little while longer. But just because you can, doesn’t mean you should.
- The future is still coming – Kevin Joyner, Director of Data Solutions, Croud
Don’t let Google’s announcement lull you into a false sense of security. Google has not paused the GDPR. Safari and Firefox still exist and have the same significant user base. Mobile and therefore iOS isn’t any less important. Digital attribution is still flawed and unreliable on its own. Automation is still leveling the advertising playing field, and so you still need to activate first-party data to continue to compete. All your “cookieless” plans are still needed, and the future is still coming.
Final Words
Privacy is one of the major concerns on the internet for users. Therefore, the need of the hour is to build an infrastructure based on first-party data. The delay in deprecation of third-party cookies will help to build an advertising ecosystem upon which brands, marketers, and publishers can depend. Now, all eyes are on Google who is working on building a privacy-focused advertising platform. Getting right is crucial as the significance of digital marketing is growing and a longer timeline will help to develop multiple solution approaches.
IBM Adds Three New Ad Tools To Help Brands Grow Beyond Cookies
IBM announced three new ad tools to add to its growing suite of AI solutions for brands and publishers that don’t rely on cookies and trackers. The new capabilities are designed to allow brands to reach customers while maintaining their privacy.
The tech giant intends to work with industry leaders like Xandr/AT&T, Magnite, Nielsen, MediaMath, LiveRamp, and Beeswax to help accelerate the use of AI in the digital ecosystem. The IBM Watson Advertising suite of solutions leverages AI to help clients make informed, data-based decisions. It would expand the suite by adding a host of new capabilities. This includes ad attribution, video and over-the-top (OTT) creative, and audience prediction.
– Expansion for IBM Watson Advertising Accelerator: IBM is expanding its advertising accelerator that uses AI. It enables marketers to understand which creative content performs best, and now includes video and OTT platforms.
– IBM Watson Advertising Attribution: The company is launching a beta solution in the coming months. It will allow marketers to precisely quantify the efficiency of their advertising spend while understanding performance drivers.
– IBM Watson Advertising Predictive Audiences: This tool will help reach consumers that show similar behaviors.
The new AI-powered advertising products are an alternative to conventional cookies and trackers. Soon, Google will withdraw the support for such identifiers. Bob Lord, SVP, of Cognitive Applications, and Blockchain, IBM said,
While the advertising industry strives to re-emerge strong from the global economic and societal issues we faced this year, it’s also deep in the throes of a major transformation with changes to mobile identity, certain elimination of third-party cookies, compliance and regulatory shifts and increased demand for trust and transparency,
We believe AI will be the ‘backbone’ of the new era as the industry prepares for the next generation of advertising. Our work will be a step forward in our evolution to meet the advertising industry’s upheaval, and we are proud to help the advertising industry advance with the value of AI.
IBM is working towards a new ecosystem to accelerate AI adoption and in advertising that would bring together existing collaborators like Neilson and MediaMath as well as new partners like Xandr/AT&T and Magnite, with whom IBM is negotiating definitive agreements. The companies can help to reinstate trust and transparency in the marketplace with the next generation of IBM advertising technologies.
As quoted in Adweek, MediaMath CEO Joe Zawadzki said,
You think about sort of the conditions that led AI to become prevalent in finance, for example, like what needed to be true—the the idea that markets get big enough, that automation is available enough.
I think you’re seeing the same conditions for AI in advertising, where it’s gone from sort of experimental and on the side to mission critical for people to figure this out.
Read more: A One-stop Guide On All You Ever Need To Know About AdTech In 2020
Narrative Raises $8.5 Millions To Support The Growth Of Data Streaming Platform
Narrative, the software company is launching a new product design that will simplify the process of buying and selling data. The company has raised a new round of funding of $8.5m Series A, to support the launch of a new category: Data Streaming, replacing the data broker model industry with a transformation solution.
Narrative unveiled the new Data Streams Marketplace which is the industry’s first-ever e-Commerce solution for buying data. It would make the process of buying and selling much simpler, not much different from Amazon.
The new Marketplace offers data acquisition via an interface the firm says will be ‘familiar to anyone who has shopped online’: The new offerings enable users to browse and purchase the data they need ‘in minutes’ without the need for extensive training, ‘legal wrangling and red tape’. The marketplace provided comprehensive solutions for data discovery, onboarding, enrichment, identity resolution, and privacy and compliance.
As reported by TechCrunch, Jordan showed how a marketer can search and browse for different types of data. If a marketer wants to buy (say, the mobile IDs of people who have the Uber Driver app installed on their phones, or the Zoom app) at a price they are willing to pay (via subscription), they can add data to the cart, enter card information for payment, accept the terms and conditions, and check out.
“The premise is make it as easy to buy data as it is to buy stuff online.”
This approach has become enticing in recent months as companies need more data quickly. For instance, Jordan shared with Tech Crunch that large companies invest millions of dollars in advertising and “need a way to find and buy the data almost programmatically and have the whole thing take five minutes instead of five months — those are the orders of magnitude we’re talking about here.”
Founder and CEO Nick Jordan comments,
“As sales and services companies, data brokers have become intermediaries who are doing what they want with data in ways you don’t know. With a data broker, you get what they send to you. That’s how they make money. This is sub-par; it’s not agile – and you can’t optimize it. We have shortened the data supply chain by going direct – cutting out the broker, and making data liquid and transparent.”
The new round was led by G20 Ventures, with additional funding from existing investors Glasswing Ventures, NathCapital, Revel Partners, Tuhave Venture Partners, and XSeed Capital. The funds will allow the company to hire in areas like product engineering, sales, and marketing from across North America. Their focus is on hiring and outreach.
Bob Hower, Co-Founder & Partner, G20 Ventures said,
“With data being the lifeblood of every organization, Nick and his seasoned team of data experts have presented the industry with a different point of view.”
“They have become the Amazon for data, delivering a vital solution to a global problem: ensuring transparency, control, and quality when it comes to data acquisition. Narrative’s Data Streaming Platform simplifies what has been a complex process that typically takes months and delivers it in seconds on demand.”
About Narrative:
Narrative is a platform for Data Streaming, Data Acquisition, and Data Monetization. It is the world’s first leading data streaming platform. Leading companies use Narrative to fuel cutting-edge data strategies, monetize valuable data assets, and power innovation and growth. Narrative’s innovative approach to buying and selling data eliminates the inefficiencies in data transactions that cost money and exposure to undue risk. Narrative Data Stream marketplace gets the data needed instantly. It is fast and easy to find, buy, and activate first-party data from over 40 suppliers with just a few clicks. It’s online shopping—but for data instead of dog treats. The privately-held firm was founded in 2016 and is headquartered in New York City. Learn more at https://www.narrative.io/
Read More: Your Ultimate Guide to Understanding the Customer Data Platform
Explained: Why Facebook thinks Apple’s iOS 14 privacy push will have a severe impact on business
Apple and Facebook are fighting again but this time over ads and privacy. Sometime next month, it is expected that Apple will roll out its iOS 14 updates with a privacy change. Apple will explicitly ask its users if they wanted to be tracked by a specific app. A simple question, with a potentially serious consequence. Facebook warns that these privacy changes can lead to a more than 50% drop in its Audience Network advertising business.
IDFA And The Privacy Changes
Apple assigns IDFA or Identifier for Advertisers to an iPhone across apps. This tracking mechanism is basically their cookie and advertising platforms rely on the data to target ads. App and gaming companies rely heavily on such data and show ads via Facebook’s ad platform, Audience Network.
This identifier was always present by default for iOS users but Apple’s new privacy change means that users cannot be tracked by default anymore. Many advertising industry insiders believe users will refuse data tracking permissions if given a choice. This means no data for ad targeting which eventually will make ad placement a task. Fewer ads on Facebook’s Audience Network will lead to less revenue for publishers.
Why Is Facebook Unhappy?
Facebook Audience Network is one of the ad placement options for Facebook. This placement depends on ad placement within the app. The app owners monetize this placement. The data from IDFA works with Facebook’s SDK, a tracking mechanism.
Facebook has alerted advertisers of reduced targeting and campaign measurement ability as well as publishers especially working with Facebook’s Audience Network of the fall in revenue by 50% and warned that the impact could be more. In a blog post, it said,
Like all ad networks on iOS 14, advertiser ability to accurately target and measure their campaigns on Audience Network will be impacted, and as a result publishers should expect their ability to effectively monetize on Audience Network to decrease.
Ultimately, despite our best efforts, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14.
Facebook also commented that it is less likely to affect its own ad business but will seriously dent small publishers and developers’ revenue using Audience Network. Audience Network represents a smaller part of the overall revenue pie.
What Steps Is Facebook Taking?
Facebook has outlined the steps to be taken to ensure that its advertising business is in line with Apple’s requirements. However, this will limit the scope of targeting ads effectively to iPhone and iPad users.
- Facebook will not collect IDFA by making a change to its own apps on iOS14. They will spare them from having to ask for data-tracking permissions from the users.
- Facebook asks businesses to create a new ad account dedicated to running app install ad campaigns for iOS 14 users. The current account that targets previous iOS versions along with Android users is to be maintained.
- An updated version of the Facebook SDK will be released to support iOS 14 which will limit the data available to businesses for running and measuring campaigns. This update will be rolled out before Apple releases the iOS14 update.
Facebook’s tone has always been mild but remarkable to openly challenge Apple. In a blog, the company said,
“We understand that iOS 14 will hurt many of our developers and publishers at an already difficult time for businesses. We work with more than 19,000 developers and publishers from around the globe¹ and in 2019 we paid out billions of dollars². Many of these are small businesses that depend on ads to support their livelihood.”
Why Apple’s Move Is So Significant?
iOS makes up just 25 % of the total global mobile market and the remaining is dominated by Android but the former is a more monetizable operating system as the iPhone users are from better economic strata. Therefore any change in the policy can have a great impact on the ad and developer business.
Read more: Facebook Debuts Shops In Its Mobile App, Instagram Expands Checkout Feature
AdForm Set To Solve The Cookie Problem With Its Proven First-Party ID Solution
Adform announced this week that advertisers can now use the first-party ID on their platform in the absence of third-party cookies. The demise of third-party cookies has been a cause of concern for all advertisers and publishers on some browsers and are looking to future-proof their offerings and tech stacks. And Adform’s success in switching to first-party data is a major breakthrough for the industry. Now, agencies can share first-party data and IDs with Adform to personalize advertising, target specific audiences, and report results – all without the use of any third-party cookies.
A joint collaboration between Adform, the European publishing group Sanoma, marketing agency Dagmar, and global group IPG MediaBrands is leading the way forward for the digital advertising industry and leveling the playing field with the walled gardens. The collaboration not only prepared for the future cookie change but also improve the functionality of advertising buying for Safari and Firefox browsers. The change in first-party data allows programmatic targeting and helps to direct advertising money into publishers’ properties who are eager to secure their ad revenue.
Adform states that without the need for hundreds of third-party cookies, compliance with regulations such as GDPR and CCPA will be easier. First-party data and IDs is beneficial to brands as they live longer than third-party cookies. With first-party IDs from publishers and advertisers, impressions and data are completely traceable increasing transparency that helps to deal with issues like discrepancies, accountability, hidden fees, arbitrage, and ad fraud and reducing the risk of data leakage.
Adform has a complete digital infrastructure and is uniquely placed to switch to first-party data with its integrated advertising platform(IAS). Jakob Bak, CTO, Adform said,
“We have proved that it is possible to switch from third-party cookies to first-party IDs and, as such, have provided a leap into the future of digital marketing. The industry is on an inevitable road to life without third-party cookies and ongoing success for the open ecosystem will depend on collaboration. So far, publisher announcements around first-party data have represented positive yet individual approaches, now it’s clear that working together presents a more powerful way to ensure profitability for independent publishers. In fact, the evidence of how impactful shared first-party IDs can be has already led to many agencies and sales houses to express interest in moving spend away from media giants.”
Jaakko Kuivalainen, Director, Digital Advertising Business, at Sanoma also commented,
“Finland is an established hotbed for innovation, but there is a huge opportunity for wider global progression. This venture is a great example of what can be achieved when publishers and technology companies come together. Working as one, we can be consistently at the forefront of industry development; and effectively preparing for the coming demise of third-party cookies with first-party centric digital advertising.”
Read more: Top 10 Emerging Indian Ad Tech Startups You Should Know About
Top 10 Emerging Indian Ad Tech Startups You Should Know About
The market for advertising technology is expected to record exponential growth between now and 2023.
-CMO Adobe
Just as advertising is the business of making advertisements, ad tech is the business of using technology to make advertisements faster, quicker, and efficient. The business is driven by powerful algorithms and data points.
The Adtech ecosystem consists of two major entities – the advertiser (Demand-side) and the publisher(Supply-side). Adtech helps advertisers and publishers achieve their goals in harmony by providing solutions that meet the demands of both parties.
Learn more: A One-stop Guide On All You Ever Need To Know About AdTech In 2020
The Growing Ad Tech Trends
The year 2020 is full of technological advancements – Artificial Intelligence, data-driven marketing, and much more. Digital commerce is going strong and growing, leading to new paths such as mobile, programmatic, analytics, data management, and more. With new tools and technologies emerging every year, marketers can choose from a plethora of options across digital marketing to connect to a new audience and promote their products.
According to Emarketer’s survey, by 2020, digital ad spending will be 50% of total advertising. The statistics prove that there is a shift from the traditional medium of marketing to digital platforms.
Here are six significant ad tech trends in 2020 that will change the advertising world
1. Programmatic Advertising:
Programmatic advertising is becoming a star strategy, and businesses spend almost $60 billion every year. It is projected that programmatic transactions two-thirds of digital display ad spend around the globe in 2020.
Programmatic needs to resolve many challenges before realizing its true potential, such as in the absence of the cookie, the industry needs to search new ways for retargeting and personalization, keeping customers’ privacy in mind. Meanwhile, first-party data is essential in the success of programmatic advertising. Lack of transparency, ad fraud, and efficiency are vital concerns that need to be addressed adequately.
The largest programmatic markets are the U.S, China, and the U.K with a double-digit Y-o-Y growth rate. Indonesia, Brazil, and India will be the fastest-growing programmatic digital ad market in 2020.
There are top three auction type segments for the global programmatic advertising display market which has gained momentum are :
- Global programmatic advertising display market by open auction: Buyers are allowed by publishers to participate in the public sale. It is likely to be the leading segment in the programmatic market with more number of buyers entering the digital market that allows publishers to get the best price for their inventory.
- Global programmatic advertising display market by automation guaranteed: Publishers are allowed to reserve inventory while keeping the price fixed. The inventory in this segment is premium advertisement such as the Super Bowl, or pre-launch page of a website and the growth prospects for automated guaranteed are big. It is forecasted by 2021, 88% of all digital display ad spending will flow via automation.
- Global programmatic advertising display market by invitation only: It is a private marketplace limited to buyers with an invitation only. The growth driver for this segment is more control over ads that are being run, and the relativity of ads is high due to which advertisers are ready to bid high to get the ads placed.
2. Mobile Advertising:
Mobile advertising continues to take share with substantial gains over the last five years. A report by a research firm Berg Insight forecasted that the global mobile advertising market is expected to grow at the compound annual growth rate of 43%. Another eMarketer report projects that mobile ad spending will reach $400bn by the year 2023, up from $286bn this year. The numbers say it all! It is evident that the industry is growing and projects to represent 80% of global digital ad spend.
A lot of in-app is driven by gaming. A spike in gaming is witnessed during COVID with 1.2 billion weekly mobile game downloads. Buyers are eyeing a vast opportunity to reach a diversified audience within the data-rich environment. There is an exponential growth of in-app advertising. Comscore research says that 75% of digital users consume all their social media, lifestyle, travel, news, and utility content using mobile apps. 5G will also be a considerable contributor to boost mobile-in app advertising, opening doors of opportunity and creativity for advertisers. With technologies such as OM SDK and app-ads.txt rolling out, the industry is moving towards a cleaner and more measurable environment.
Consumer time spent on media is shifting towards mobile, and eMarketer reports India and Thailand will witness the fastest mobile advertising growth in 2020.
3. Video Advertising:
The video will remain the key driver and cannot underscore its role in 2020. With large-scale events postponed and ad budgets cut down, marketers rely on video advertising as effective means across platforms. It is projected to account for 31% of the overall display ad spending next year.
Verizon research shows, almost all (96%) advertisers will be investing in at least one video ad format this year, and more than three-quarters say they plan to invest more in premium video content in 2020. The reason is ROI.
Advertisers and marketers plan to invest in shoppable and interactive emerging video ads formats. With shelter in place and people continue to work from home, there is a rise in digital and mobile usage with CTV and OTT becoming increasingly dominant. Verizon research states.36 percent plan to invest more in Connected TV ads, while 30 percent intend to increase their spend on mobile video. USD 70 billion ad spend from linear is shifting towards OTT channels. Major companies are keen to take advantage of the changing scenario with the right technology.
4. Digital 360 services:
Marketers are focusing on areas like the personalization of media and content marketing. Voice and visual searches are playing a huge role in the ecosystem, and marketers are developing new techniques to enhance it. Many companies are offering 360 digital services that include social media marketing, SEO, content marketing, analytics, automation and transparency, and many more.
TheDrum indicates that by 2022, the global digital software industry will grow by $74.96 billion. CMO predicts that around 87% of marketing budgets will be spent on digital marketing by 2022.
Another fastest growing digital marketing trend is interactive content – click on, swipe, or interact with online. Outgrow states 93% of marketers rate interactive content as highly effective at educating the buyer. The cutting edge technology like augmented reality and 360-degree videos offer a dynamic, engaging, and immersive experience.
5. Influencer Marketing:
The influencer marketing industry is set to hit USD 15 billion by 2022. With a high ROI, the industry will witness tremendous growth in the coming years.
Influencer marketing is in the early stage, but its usage growth is impressive. Less than one third (27.9%) marketers have been using influencer marketing for over three years, 20.9 %have been using for less than a year, and 7% have never used it. Reach and engagement is critical factors in an influencer mix and there is a negative correlation between engagement rate and followers. Most marketers prefer micro-influencers, typically followers between 10,000 and 100,000.
In the series of Global View For AdTech Start-Ups, we bring you ‘Top 10 India-Based Ad Tech Start-Ups’ -a curated list of promising start-ups from industry-main anchors to up-and-comers leading the advertisement industry in India.
Company: ADZ Junction
Founder: Ashok Nain
Category: Digital Services, Ad- Affiliate Network, Mobile Advertising
Geo-Markets: India, Dubai, U.S.A
What they do: ADZ is the brainchild of Ashok Nain started with Mobile advertising and expanded the business to video and web gradually. Their services also include Digital Strategy, Content, Development and Marketing, and Search Marketing. Since its inception, the company is focused on delivering high-quality traffic to clients who have scalability issues and help them to identify their targeting audience, especially in Mobile advertising.
How it’s changing adtech:
- With its innovative advertising solutions and strategies, the company has built a robust affiliate marketing platform that can assist clients in real-time tracking and analytics.
- The 360-degree digital provider has 100+ clients from various sectors with a business of over USD 15 million and is developing technology – a real-time traffic buying SMS platform.
“We introduced real-time bidding, Mobile in-app advertising, rich media, and many other innovations to overcome clients’ problems of quality traffic generation. We have now a separate mobile division by name of AJ Mobile, where we encourage clients to work exclusively on mobile campaigns.”
The company successfully launched a digital campaign for Dr. Lalpathlabs, an established company in the healthcare sector. Here is a short case study:
Challenge:
- Expand its online market reach and user base
- Identify digital channels to generate revenue.
- Being completely behind in digital marketing and competing with emerging players in the healthcare sector.
Solution:
- Provided brand awareness strategies for different online channels.
- Established a full-fledged and cost-effective affiliate marketing channel.
- Established a brand development strategy and marketing campaign to rise above the competition.
- Successful digital campaigns resulted in 3X monthly transaction growth.
Founded: 2015
Headquarters: Gurugram (With offices in Mumbai, Bangalore, and Dubai)
Company: Aristoma
Founder: Kumar Nishanth
Category: Online Digital Services
What they do: Aristoma, a 360-degree marketing incubator, offers services to increase customer reach using online mediums with some brilliantly creative and engaging ideas. Its portfolio includes top clients such as Diesel, Sportmate, CII, CREDAI Chattisgarh, Goldbricks, to name a few. All its endeavors have resulted in 100 percent growth.
How it’s changing adtech:
- Aristoma is all about helping brands grow with a mantra “Commits, Creates & Connects” with expert result-oriented ideas and making advertising a better experience for advertisers and consumers.
- The company advises in Brand Management, Email Direct Marketing, SEO, and Social Media Planning to help businesses to get the most out of their marketing campaigns.
Founded: 2015
Headquarters: Raipur
Company: DigiVigyan Marketing
Founder: Amit Verma
Category: Digital Services, Digital Display Advertising
What they do: A dynamic full-service digital marketing agency that provides clients with multiple solutions through different marketing verticals- Website Management, Search Engine Optimization, Search and Display Advertising (Pay Per Click – PPC), Native Advertising, Online Reputation Management, Amazon Marketing Services, and Social Media Marketing.
How it’s changing adtech:
- DigiVigyan offers world-class digital advertising solutions to businesses to achieve their digital marketing goals.
- The company offers services such as creating landing pages with attractive ad copies, banners, and other optimizations to meet the marketing needs of businesses on various social media platforms. It has worked with renowned ad agencies like Dentsu, M&C Saatchi, to name a few.
- The bootstrapped adtech company is now working towards being the go-to digital marketing agency worldwide after capturing the market across the country.
Founded: 2018
Headquarters: Delhi
Company: Do Your Thng
Founder: Ankit Agarwal
Category: Social/ Influencer, Influencer marketing platform
What they do: DYT is a leading Influencer Marketing Agency and a shared economy for digital assets. It acts as a platform to create space for brands to connect with the largest team of nano, micro, and mega influencers.
How it’s changing adtech:
- DYT is an online community that offers content creators an entry in the market and connects brands to the influencers depending on the campaigns. The active users through the app can promote the brand and earn for each post made, whereas the brand can find a safe and secure marketplace to discover the right influencers for their product.
- DYT operates on a broker based model where a percentage of the total spending is charged to maintain the platform. In a short period.
- The phenomenal fundraising and affable work culture have made DYT one of the fastest-growing startups.
Funding:
The tech platform raised $150K from angel investors and plans to use it for further expansion and growth. Previously, the company has also raised an undisclosed amount from angel investors and intends to raise more funds in the future.
“DYT within months of its operation has successfully worked wonders for brands such as Mastercard India, Havells, etc., thus bringing engagement for the brands. With increased investor interest, we plan to expand the team, improve the technology, and go further with the associations.”
-Ankit Agarwal
An exciting campaign with Havells:
For the new digital-only campaign #BeardKyunHoWeird with Havells, the company selected 60 creators from the male grooming niche by using the technology to find people uploading their selfies with the beard and spelling about male grooming.
Challenge:
- To increase user engagement for the launch of the new range of BT 9000 beard trimmers with digital platform-only campaign #BeardKyunHoWeird.
Solution:
- Selected 60 creators. Each Instagram creator had a follower range of 1,000 to 85,000.
- Creators created unique and compelling content on how the new Havells trimmer helps in male grooming.
- The 20 days campaign got more than 100,000 engagements, reaching 500,000 users.
- The campaign attracted traction and engagement rate of 10% with authentic creators.
Founded: 2019
Headquarters: Gurugram
Company: EMIAC Technologies
Founder: Divya Gandotra
Category: Digital Services, Social Media Marketing
Geo Markets: United States, United Kingdom, Australia, New Zealand, Israel, South Korea, Russia, Ukraine, Vietnam, Singapore, and UAE, among others.
What they do: EMIAC is a perfect blend of innovation and technology determined to serve businesses in front of their target markets. Their principal services include Content Development, Paid Marketing, and Web Design and Development. The leading digital firm has 1200+ clients, 2900 projects across 30+ countries.
How it’s changing adtech:
- EMIAC offers an array of services from content development and full-service digital agency to paid social media marketing and blog outreach. It is a top-rated digital marketing and content development agency on the world’s popular freelancing site Upwork that adds to their credibility and goodwill.
- What differentiates them from the crowd is an excellent record of delivering projects on time, offering personalized products and services, premium quality services, and providing it at competent prices.
“We are the game-changers, trendsetters, pioneers, and revolutionaries with a passion for creating an ideal digital future where everyone is connected.”
Founded: 2017
Headquarters: Jaipur (With offices in U.K and U.S)
Company: Globale Media
Founder: Bhavesh Talreja
Category: Mobile Advertising, brand safety/ verification, programmatic advertising
What they do: Globale media offers an integrated marketing platform that maximizes revenues by bringing in direct advertisers and showing relevant ads that best fit the user audience using banners, interstitial, videos, social, and native ads. The company specializes in digital marketing for all major kinds of app verticals including gaming, e-commerce, lifestyle, utilities, social, education, entertainment, and others on CPM, CPI, and CPA cost models. Publishers can access to the full feed of available campaigns as well as real real-time tracking and automation to multiple devices with programmatic GLOBALE API. It excels with a reach of over 500+ direct publishers, 1000+ live campaigns over 120 countries.
How it’s changing adtech:
- Globale media has developed a marketing program primarily for the mobile age.
- Globale media has been sincerely providing “ transparency on inflation level and not just on the click level.” The company is aggressively pitching for its recently launched product keyword search traffic where revenues have increased 3x from quarter-on-quarter and are expecting to multiply the revenues by 10x in 2020.
- In the next five years, it aims to be among the top ad tech marketing companies in India, the Middle East, and Southeast Asia.
“We provide app marketers with 100 direct in-app traffic sources with transparency so they get device ids on each and every click and have a clear knowledge about where the app is running. In terms of impact, the advertisers can use these device ids to run their re-engagement campaigns and make sure the users are coming back to the app and ultimately spending more within the app.”
-Bhavesh Talreja
Founded: 2017
Headquarters: Singapore (With offices in India and UAE)
Company: mCanvas
Founder: Vishal Rupani
Category: Mobile Advertising, Video Interactive ads, Programmatic Advertising
What they do: mCanvas is a subsidiary of Affinity and is the brainchild of Vishal Rupani, from vision and inception to revenue generation and scalability. mCanvas is a storytelling mobile ad platform that uses phone sensors to create compelling and interactive brand narratives.
How it’s changing adtech: mCanvas is the first and leading Indian company that has addressed critical issues of mobile marketing: Banner Blindness, Poor Viewability, Accidental Clicks, and Lack of Storytelling. The mobile advertising platform uses four kinds of advertisement formats: Scrollers, Stickers, Spotlight, and Streambox.
- The company recently integrated with Adobe advertising cloud that will enable advertisers to buy experiential rich media content and interactive video ads.
“In light of the steady increase in the demand to make ads programmatically available, we are happy to integrate with Adobe Advertising Cloud DSP. We have spearheaded programmatic advertising in the rich-media mobile ad industry, and we will continue leveraging its power to offer our innovative solutions.”
-Vishal Rupani
- The company has a reach to at least 60million Indian smartphone users and follows the cost per video (CPV) model for videos and cost per engagement(CPE) for rich media. Sensory Rich media content is produced for VR and AR as well.
“Augmented reality (AR) has become a buzzword in the online tech space. It has shown great promise even in the mobile ad space, and brands have been quick to incorporate AR into mobile-led ad campaigns that have proven to enhance user engagement.”
One of the best examples is of Frooti – #TheFrootiLife
Challenge: To build a brand recall with its primary target audience -Millennials around the drink during summertime.
Solution: Using face detection technology, the rich media campaign encouraged users to start the front camera and catch the falling mangoes in the augmented environment. This campaign created a massive impact on the users with this ‘WoW’ ad experience.
- Another segment that has been strongly transformed by brand experiences in the mobile ad industry is voice-enabled interactive mobile ads that have created a lasting impression.
“Personalization of marketing & advertising messages is not a luxury but a necessity.,”
-Vishal Rupani
Here is another case study of Mercedes-Benz GLC that has used speech and sound recognition technology in mobile ads. To promote their latest feature, Mercedes -Benz User Experience (MBUX) used a smart multimedia system and in-car voice-activated assistant.
The mCanvas interactive mobile ad uses real-time speech recognition technology, and the voice bot in the ad would respond to the questions, recreating the actual experience a user would have in the car.
Founded: 2014
Headquarters: Mumbai
Company: Streamlyn
Founder: Naveen Kumar & Raja Chakraborty
Category: Programmatic Advertising, Brand Safety/ Verification
Geo-markets: Asia, Europe, MiddleEast, North America, MENA, APAC, and other 25+ countries.
What they do: Streamlyn works for both publishers and ad buyers to sell and buy ad space respectively. It works as an agency as well as a supply-side platform.
How it’s changing adtech: The one-stop advertising solution provider, a publisher focused media agency connects advertisers with the target audience via the right publisher.
“The aim was to help online publishers, particularly small and medium-sized ones, grow their revenue and the audience.”
-Naveen Kumar
- Streamlyn has an in-house ad server and algorithm to help analyze and optimize the monetization depending on the solution provided by the team to assist the client with high ROI and eCPM and uses cutting edge technology –POE (Programmatic Optimization Engine) and Anti-Fraud algorithms.
- Streamlyn offers its proprietary product ‘ BidsXchange,’ a smart advertising portal deploying machine learning for small and medium-sized advertisers that allows them to upload ads and select their desired publishers based on the target audience interest.
- Another additional revenue source for publishers is In-image advertising, a novel concept that helps achieve an edge over competitors with Streamlyn’s Header bidding wrapper tags.
- It generates content in regional languages and is known as the best optimization partner for vernacular publishers. It has partnered with Google to support vernacular publishers and increase their revenue.
Founded: 2015
Headquarters: Singapore (With offices in India and U.S)
Company: Tarsan
Founder: Tarun Nayyar
Category: Mobile Advertising, Affiliate Marketing
What they do: Tarsan is a leading performance-based Mobile media agency that caters to top-level clientele globally like Airtel, Paytm, M&C Saatchi, CyberAgent, to name a few and delivers performance & branding campaigns and SMS/email/voice/solutions. It is known for the execution of marketing plans on mobile.
How it’s changing adtech:
- Tarsan has an in-house platform, AdMenu, that gives clear and quantifiable value to each advertising avenue, enhancing the ROI on ad spends as well as boost transactional value. It provides transparent information regarding the placement of ads on various platforms via GAID or IDFA.
- Many transactional campaigns are carried out on E-commerce platforms, but the company charges only for lined traffic by experienced customers, whereas the payment depends on CPR, CPT, and CPI.
- Transparency and accountability are their top priority, and with the unique capability to gather information about mobile devices, it has been successful in creating a database of publishers and marketers.
- It maintains a five-layered security policy for data protection. The company aims to become a 360-degree performance-based mobile marketing agency and enhance the AdMenu platform and convert it into a revenue generation opportunity.
“We never store data; we just identify people according to their device id. The information given to us is all in concurrence from the publisher and advertisers.”
Founded: 2012
Headquarters: Delhi
Company: UrPopular
Founder: Siddharth Sinha & Kumaresh Bhatt
Category: Micro-Influencer Marketing, Measurement and analytics
Geo-markets: India, Southeast Asian countries, MENA countries, Australia, Indonesia, Malaysia, and Singapore.
What they do: UrPopular is India’s largest network of micro-influencers who are paid to post on Facebook, Instagram, Youtube, and Twitter with 240 million+ organic reach across these platforms. They have a pan India reach of 240 million+ and creators in 11 languages.
How it’s changing adtech:
- The tech firm is democratizing organic marketing in India and helping brands to create ROI based campaigns.
- It adds new ways to drive ROI for brands with its cost per view and cost per reach micro-influencer campaigns. The tech company has developed algorithms to understand the outcome of the campaigns and brands can acquire efficiency and measurability in their campaigns.
- Their mantra is “Create, Amplify, and Measure.” This case study of McDonald’s ‘A ful-filling campaign’ is a perfect example to understand it.
Challenge: McDonald’s wanted to destress students from exam fever, and their McSaver Meal + Free French fries exactly intend to do.
Solution: UrPopular got their 11 young and enthusiastic influencers to cheer up and whip off the post-exam chronicles within the outlet by creating Insta stories, videos, fun boomerangs, and before/after stills.
These custom creatives pushed organically delivered,
- 1 million + reach with a 17% engagement rate.
- Rs.1.9 cost per engagement.
- 1.4 million impressions.
“UrPopular brings measurability and scale to the campaigns by working with India’s largest pool of microinfluencers and nano influencers.”
Founded: 2017
Headquarters: Mumbai
Closing Words
“In this industry, tomorrow is never the same as today. To gain long-term success in AdTech, you have to play fair, don’t be afraid of experiments, and never stop trying”
-Anton Ruin, Epom
Ad Tech is no rocket science, but it is of significant advantage to brands as it allows integrating various tools in a single system. It is an amalgamation of advertising, creativity, technology, and innovation. The automated process and joint workflows enable more precise target marketing resulting in relevant and compelling ads. The new norms, tried and tested solutions along with reliable platforms helps to keep information safe and avoid any ad fraud. With significant changes and improvements over what advertisers and publishers used to have earlier, adtech is growing as an industry. However, it still requires more work and expertise to handle the challenges and resolve for good.
Read more: Evolution of Digital Advertising: Happy 25th Digital Advertising And Many More To Come
The Impact of M&A deals in AdTech Amidst COVID-19 Pandemic
The year 2020 is facing global problems like pandemic, race riots, or recession. In the early days, many advertisers have pulled back in many areas because of the fear and uncertainty but surprisingly the projected slowdown on the ad spend is minimal, pointing towards a stable and steady growth in the future. The stock performance of adtech and mar-tech companies have performed well despite the crisis. Adtech is witnessing a consolidation phase but how effective will be dealmaking in this pandemic is the next obvious question. Read here to know more.
Dealmaking In Pandemic
Luma Partners’ Terrence Kawaja, ad tech’s top investment banker pointed at Adweek’s NexTech 2020 Virtual Summit that dealmaking dropped to almost half in the pandemic where many of them were legacy deals which were already in pipeline pre-COVID. The dealmaking was substantially down in Q1 and Q2 and is expected to further reduce in the third quarter due to short-term lack of confidence owing to the current crisis. However, dealmaking activities have picked up again and will see more toward the end of 2020. Kawaja also said,
“Based on our pipeline and what we’re seeing in the marketplace, buyers are back in and looking for deals.”
Where are we seeing these new activities coming from?
Kawaja provides key insights on a potential impending wave of industry consolidation and 5 market segments that are driving M&A deals – Connected TV, Identity, Mobile App, Audio, and what he termed ‘Programmatic End Game Consolidation’ and further elaborated on it.
1. Connected TVs: CTV is over a USD 100 billion market that is growing rapidly and by next year it will be 50% addressable. CTV viewing was up in the pandemic and there is a shift in consumer viewing from linear to streaming mainly due to the loss of live sports. USD 70 billion ad spend from linear is shifting towards OTT channels. Major companies are keen to take advantage of the changing scenario with the right technology. With an accelerated shift to streaming, CTV deal activities are picking up.
2. Identity: The core to 360-degree marketing witnessed many privacy regulations and data restrictions from big tech like Google Chrome turning off cookie to Apple’s IDFA deprecation, presenting challenges like limiting targeting in the open-web and measurement. At the same time, there are opportunities like first-party data and resurgence of contextual targeting. Large companies position for privacy-centric data capabilities and predict strategic opportunities in consumer data deal activities.
3.Mobile App: Mobile advertising continues to take share with substantial gains over the last 5 years. A lot of in-app is driven by gaming. A spike in gaming will be witnessed during COVID with 1.2 billion weekly mobile game downloads with people having more time in hand in the lockdown. The latest challenge that companies are trying to sort out is the IDFA deprecation in the iOS 14 update. Deal activities will continue in mobile apps provided there are new opportunities.
4. Audio: Podcast has undergone tremendous popularity in the last 5 years with 104 million monthly podcast listeners. The monetization has grown even faster and is still in the early years that has the potential to grow further. The rise in podcasting is driving many more audio deals. Many substantial deals have already happened mainly by Spotify and are expected to continue.
5. Programmatic End Game Consolidation: Every industry goes through three generic phases: new company formation, maturity, plus rationalization and consolidation. However, in the adtech industry, the process is “on steroids”. Thousands of companies initially flood the adtech market with an abundance of venture capital and easy market entry, and with early successes follows a rush of IPO’s. Large consumer data companies take advantage of the large, matured, and growing market for scale and profitability. Kawaja says the net consolidation in ad tech started in 2015 and further adds,
“We’ve been on that rationalization push for the last five years.”
He sees this is the final phase -the end-game-of consolidation soon which will be accelerated by the pandemic which will get to fewer players with larger spend and lower-tech rates.
“This will clean the ecosystem with fewer players that are more sustainable with a better market cap. Consolidation on DSP side – Trade desk with 20 billion market cap is the evidence for the final phase.”
If his projection comes true then there will be some activities after a long pause in the deals. Following that, the M&A sprint is likely to exit the industry.
Read more: A One-stop Guide On All You Ever Need To Know About AdTech In 2020
Everything the Q2 2020 Financial Results of Tech Giants Have to Say
Big Tech giants have revealed their quarter financial performance in these turbulent times. Here are the Q 2 financial performance, insights, and earnings details:
Alphabet
Google’s parent company Alphabet beat the expectations for its Q 2 earnings despite a dip in the advertising. However, it marked its first year-over-year revenue decline in its history as the pandemic slowed the economic activity and advertisers pulled back their spending. Though there is a slowdown in the advertising growth, Google pointed to newer long-term opportunities in cloud computing and artificial intelligence, YouTube, and shopping. For the rest of the year, in anticipation of slowdown, the company has cut marketing spend by half and also freezes hiring.
Google is also facing antitrust investigations of its search and Android business and is expected to result in a legal action that could cover issues from search to digital advertising space in the coming months.
By the numbers:
- $2.6 billion declines in year-on-year advertising revenue.
- Google’s total quarterly revenue $29.9 billion of $38.3 billion is from advertising.
- YouTube ad revenue increased 6% to $3.8 billion.
- Google Cloud sales grew 43% to $3 billion.
- Total Net income reported $6.96 billion compared to $9.95 billion in the year-ago quarter.
Response:
Though there is a slowdown in the advertising growth, Google pointed to newer long-term opportunities in cloud computing and artificial intelligence, YouTube, and shopping.
For the rest of the year, in anticipation of slowdown, the company has cut marketing spend by half and also freezes hiring. Ruth Porat, Chief Financial Officer of Alphabet and Google said,
“We continue to navigate through a difficult global economic environment.”
Consumers are returning to more commercial search queries and advertisers are gradually increasing their search spending towards the end of the quarter. However, Ruth Porat cautioned,
“We believe it is premature to gauge the durability of recent trends, given the obvious uncertainty of the global macro environment.”
Google is also facing antitrust investigations of its search and Android business and is expected to result in a legal action that could cover issues from search to digital advertising space in the coming months.
Amazon
The e-commerce giant delivered some eye-popping numbers during Q2 beating earnings expectations and reported a double-digit revenue year over year. With the flurry of online orders amid the coronavirus pandemic, sales soared by 40%. The online grocery sales tripled Y-o-Y and the grocery delivery capacity by more than 160%. The demand for online shopping sky-rocketed and to fulfill the demand, it hired 175,000 more people in the period.
By The Numbers:
- Revenue reported is $88.91 billion vs. $81.56 billion expected, the strongest and unexpected annual growth in years.
- Amazon spent $4 billion on coronavirus related measures as promised in Q1 and expects to spend another $2 billion during Q3 towards COVID-19 mitigation efforts.
- Amazon Web Services (AWS), its cloud computing service grew 29% compared to 33% in Q1.
- Amazon’s Other’ category that primarily consists of the advertising business ( a small slice of Amazon’s total revenues) was up 41% Y-o-Y and subscription services that include revenues from Prime membership also up 29%.
Response:
Amazon CEO Jeff Bezos said in a statement,
“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe.”
As reported by CNBC, Amazon CFO Brian Olsavsky said consumer demand in the pandemic shifted from consumables and groceries to categories “not so profitable” and normal mix of products. He said,“Amazon could ship a lot more.”
Amazon will conduct a Prime Day shopping event in the fourth quarter.
Despite the Congress probe, pandemic, and an anti-hate boycott from advertisers, Facebook beats all market expectations, revenue grew by 11%. This speaks volumes about the strength of the company’s appeal to marketers despite serious challenges. The top 100 advertisers’ that boycotted Facebook over its hate speech and misinformation policies constituted less than 20% of Facebook’s ad revenue. However, the boycott by large advertisers couldn’t rally small businesses who are reliant on Facebook.
By The Numbers:
- 3.14 billion monthly users across all apps(Facebook, Messenger, Instagram, and Whatsapp), compared to 2.99 billion in the previous quarter.
- 1.79 billion Daily Active Users on Facebook, up 12% year on year
- 2.7 billion Monthly Active Users on Facebook, up 12% year on year.
- Revenue: $18.7 billion, up 11% year on year.
- It has more than 9 million active advertisers.
Response:
The company said in a statement,
“We are seeing signs of normalization in user growth and engagement as shelter-in-place measures have eased around the world, particularly in developed markets where Facebook’s penetration is higher.”
Mark Zuckerberg said on a call with investors,
“Some also seem to wrongly assume that our business is dependent on a few large advertisers. The biggest part of our business is serving small businesses.”
Two new initiatives were announced for small businesses- Facebook Shops and in-messenger commerce.
“This really is primarily focused on small businesses, individual entrepreneurs. Small businesses are the biggest part of our business, not large businesses.”
The company forecasts its revenue growth rate for Q3 of about 10%. while taking into account ongoing headwinds including macroeconomic uncertainty, ad boycott (formally began in July, after Q2 ended), regulations around ad targetting, and measurement.
Pinterest revenue grew 4% on user growth and advertisement. Users who started using Pinterest during Covid-19 continued to have engagement even after lockdown restrictions eased out at a few places. It reached a milestone of crossing more than 400 million monthly users, witnessing a strong growth from users under 25 who grew twice as fast as users over 25. The total advertising growth accelerated year over year in Q2 and small and medium-sized advertisers emerged as a key driver that made up nearly half of its revenue. New features like Shop Tab and the ability to shop from boards are worked upon to make content search easy for the Pinners.
ByThe Numbers:
- Total daily video views (organic+ paid) grew over 150% year over year.
- Catalog from business increased in Q2 by more than 350% from Q1.
- Revenue from conversion optimization or oCPM, shopping ads, and auto bids continues to grow faster than overall revenue, and attributed conversions grew 2.7x year over year. 80% of CPC revenue is going through the auto bid.
- Users visiting shopping only surfaces grew more than 50% in the first half of 2020 and product only searches grew 8x.
Response:
As per CNBC, the company said,
“People needed Pinterest in Q2. They needed a service that helped them adjust to radically changed circumstances — one that inspired them to cook at home, build vegetable gardens, plan activities for their kids and set up remote offices and home gyms, to name just a few typical COVID-19-related use cases we saw during the quarter.”
Advertisers have increased budgets on Pinterest because of its strong commercial intent where advertisers get their traction without displaying ads with any controversial content.
Omnicom Group
Omnicom revenues decline 23% due to a decline in spending by the clients. In order to offset the decline in revenue 6,100 jobs were cut across its network, froze hiring, eliminated salary increases, implemented voluntary pay cuts across its agencies, and participated in government subsidy programs in 35 markets. It also shed 1 million square feet of real estate space as it terminated leases across markets in order to mitigate the impact of the pandemic. It is expected that these actions will result in the repositioning costs for the quarter of $278 million that will generate approximately $500 million in annualized savings.
Advertising revenue decline as the revenue of the programmatic business decreased where it offered principle-based buying options for clients.
By The Numbers:
- Reported revenue was $2.8 billion, down $854 million organically, or 23% from Q2 2019.
- Advertising business declined 26.6% and Third-party service costs which fluctuate directly with changes in revenue declined by approximately $400 million.
- Revenues declined in all disciplines except healthcare which grew 3.2% organically.
- CRM execution and support include events and field marketing businesses, which declined 27.6%.
- CRM consumer experience declined 25.6%, and PR declined 14%,
Response:
CEO John Wren said on the earnings call,
“The quarter posed extraordinary challenges. he effect of COVID and related lockdowns were unprecedented.”
The main reason for declines in Omnicon’s services was because the client from travel, retail, auto, and other affected verticals paused or cut spending whereas technology and telecom fared better.
After a tough and bad Q2, the company looks forward to the second half. The recovery may not be immediate but the impact will vary regionally and by vertical. Wren said,
“We think the worst is behind us, with Q2 being the worst point for year-over-year revenue declines.”
The company added a few new clients like Air France’s global agency of record account and Clorox’s media business in the United States.
Apple
Apple reports a slow down in revenue growth as the demand and supply was impacted due to the pandemic. However, it had reported a better quarter than Wall Street expected, showing growth across all product lines including iPhones and reflected growth across all geographic segments.
By The Numbers:
- Revenues rose 11% to $59.7 billion against the estimated revenue of $52.6 billion.
- Apple reported iPhone revenue of $26.42 bn, a growth of 1.66%.
- The biggest growth was in iPad revenue at $6.58bn up from $4.48 bn.
- Apple reported service revenue of $13.1 bn against $11.5 bn the same period in the last year.
Response:
Apple CEO Tim Cook during a call said,
“Amid the most challenging global environment in which we’ve ever operated our business we’re proud to say that Apple grew during the quarter.”
The company’s subscription service and Apple Tv+ also performed well as most people watched content under lockdown. Apple did not issue guidance for the third quarter.
Read more on Q1 results: Where Do These Global Companies Stand At The End Of Q1: Performance, Insights, And Statistics
Index Exchange Joins Hands with Prebid.Org to Deal with Industry Crisis
Prebid.org an organization that manages open source Prebid programmatic advertising solution announced that Index exchange (IX), one of the highly known supply-side platforms has joined them at the leader level. Mike O’Sullivan, Vice President of Product at IX has also joined the board.
Independent adtech firms are struggling to monetize the open web. As the regulations increase and third party cookies decline, the advertising ecosystem continues to face challenges in searching for new ways to track and monetize users on the open web. This reinforces the need for industry leaders to come together to build a collaborative solution otherwise there are high chances of intense competition from the duopoly like Google and Facebook.
Mike O’Sullivan said in a statement,
“The industry has very little time to solve for what’s to come after the third-party cookie, and we know collaboration is going to be an essential element of our path forward.”
“In addition to solving the third-party cookie challenge, publishers are increasingly trying to monetize in an omnichannel world, and with that comes complexity. Prebid.org is an excellent forum to discuss, design, and standardize potential solutions with a wide variety of stakeholders.”
Prebid.org is an industry-wide supported initiative to promote the fair, transparent, and efficient unified auction. Participating members contribute to the open-source projects like Prebid.js, Prebid Server, and Prebid Mobile. Index Exchange will be joining the Prebid.org team of 55 member companies that include CafeMedia, Magnite, MediaMath, OpenX, PubMatic, SpotX, StreamAMP, The Trade Desk, and Xandr.
Tom Levesque, President of Prebid.org said,
“We’re very excited to have Index Exchange join Prebid.org. The community is looking forward to their contributions and leadership across the ecosystem.”
“IX’s participation solidifies Prebid.org’s role as the best place for publishers, SSPs, DSPs, and buyers to create the future of the unified auction.”
Adtech companies are collaborating together to find a solution to third-party cookies after Google announced turning web trackers from Chrome by 2022. and recently, Index Exchange took Live Ramp cookieless identity products globally in an effort to connect publishers and advertisers.
Read More: LiveIntent and Rubicon Project Invest on a Non-Cookie Based Identifier