The AdNews end of year Perspectives, looking back at 2023 and forward to next year.
Amidst the impending shift to a post-cookie era, the landscape of addressability is undergoing significant changes. Fuelled by consumers' increasing demand for transparency and data control, both governments and technology providers are actively exploring strategies to protect consumer privacy while enhancing the precision of delivering advertising messages.
Recent proposals to amend the Australian Privacy Act at the local level highlight the global trend towards bolstering privacy measures, significantly influencing the evolution of addressability solutions, many of which have undergone multiple iterations since Google’s first announcement in 2021.
As we approach the inevitable demise of third-party cookies in Google Chrome, with 1% of cookies being phased out as early as Q1 2024, media owners and buyers are now faced with the imperative to reassess their approach to audience targeting. Adding to the urgency is the fact that a substantial 51% of Australian web traffic is currently routed through Google Chrome, underscoring the need for swift and strategic adaptations in the ever-evolving digital landscape.
Despite lingering doubts about the effectiveness of alternative solutions, the industry is compelled to adapt to these forthcoming changes. However, the crucial element in crafting a successful advertising strategy in the cookieless world, is discerning which solution to adopt and implement.
Privacy-centric addressability solutions: A diverse landscape
Authenticated IDs
The rise of Authenticated IDs offers a privacy-first approach, empowering consumers with the choice to consent using log-in data, email, or phone numbers. Unified ID 2.0 from The Trade Desk and LiveRamp’s RampID are prime examples. These IDs, tied to individual log-ins, enable cross-device marketing while maintaining the benefits of people-based marketing, such as person-level frequency capping and cross-device measurement. Clean room solutions are also emerging, facilitating secure data sharing in this new paradigm.
Non-Authenticated IDs
For non-authenticated audiences, marketers have three pathways. Inferred IDs leverage device-level probabilistic inferences to associate consumers with the sites they visit. Publisher first-party data, exemplified by Seller-Defined Audiences from the IAB Tech Lab, is gaining prominence for scaled cross-site targeting. Additionally, intent data based on browsing behaviour and advanced contextual targeting provide avenues for reaching audiences without explicit consent.
Google Privacy Sandbox
Google Privacy Sandbox introduces a series of APIs as alternatives to cookie-based advertising. While these APIs present innovative solutions, the current limitation is their incompatibility with FireFox, Safari, or Edge browser environments.
The Protected Audience API
The Protected Audience API (PAAPI) previously known as “FLEDGE” is a remarketing solution that allows marketers to re-engage with their recent audiences and prospective customers. To maintain consumer privacy, Protected Audience uses anonymised and generalised audience groups—known as interest groups—and moves the ad auction off the webpage and into a secure browser environment.
The Topics API
The Topics API, previously known as Federated Learning of Cohorts (FLoC), categorises web pages into nearly 500 interest topics without revealing consumer data, enabling marketers to deliver relevant ads while safeguarding privacy. The browser infers a handful of interest-based categories to help serve relevant ads, which can then be used to optimise ad buying models and decisioning.
The Attribution Reporting API
The Attribution Reporting API helps measure ad campaign effectiveness and enable data-driven advertising decisions. It uses encryption, time delays, and data aggregation and randomisation for measurement without revealing an individual’s data to marketers or third parties.
“IAB Australia strongly supports this form of advice about both responsible and effective addressability post third party-cookie deprecation - and continues to recommend that industry fully engage and review all of the future-proof approaches that are continuously emerging for both publishers and marketers through ongoing pan-industry collaborative efforts. We'd also advise you to regularly keep an eye on Google’s dedicated online Privacy Sandbox timelines and updates for both web and in-app environments. The Competition and Markets Authority (CMA) in the UK continues to run a very close eye over the applicability of these proposals, and as a result we do expect some potential creep.” - Jonas Jaanimagi, Technology Lead, IAB Australia
Implications and predictions
Adaptability and Flexibility
The future of addressability is contingent on the digital industry embracing adaptability and flexibility. In the post-cookie era, the traditional simplicity of third-party cookie-based programmatic buying will disappear. To navigate the evolving landscape successfully, businesses must adopt a portfolio approach to solutions that align with their specific objectives, channel priorities, and comply with regional privacy policies.
This strategy is a shift towards a more strategic and diversified approach in the pursuit of effective audience targeting.
Proactive Testing and Implementation
Success in the dynamic post-cookie landscape hinges on proactive testing and implementation of novel solutions. Early adopters are poised to shape a digital advertising ecosystem where marketers can reach their audiences effectively, publishers can monetise content, and consumers can retain control over their privacy. Underscoring the importance of taking decisive action now and emphasising that those who act early will contribute to a better, more resilient future for digital advertising.
Investment in a Resilient Future
The changes in the addressability landscape, propelled by privacy-centric solutions and regulatory shifts like the Australian Privacy Act amendments, signify the dawn of a new era in digital marketing. Embracing innovation and adapting strategies will be paramount for media owners aiming not only to survive but to thrive in this evolving landscape, and emphasise that viewing these changes as an investment in a resilient future will be crucial for the sustained success of digital advertising.
“Align your planning for all your in-app efforts by ensuring that you are resourcing adequately to understand and test the recent and ongoing updates to Apple’s SKAdNetwork API, (now on v4) for measurement and attribution within iOS and iPadOS. Most importantly, use the available time wisely through 2024, and do not become complacent and reliant upon nothing changing in terms of operational obligations in the short term, because the time to truly test is whilst third party-cookies are still widely available.” - Jonas Jaanimagi, Technology Lead, IAB Australia
Taking action
As we stand on the threshold of the post-cookie era, it’s abundantly clear that media owners, buyers, marketers, and technology vendors must act decisively to stay ahead of both platform and regulatory changes. Proactive testing of emerging solutions isn't just advisable; it's paramount. The anticipated shifts, propelled by privacy-centric solutions and upcoming amendments to the Australian Privacy Act, demand a strategic and agile approach.
“Throughout 2024 IAB Australia’s various working groups and councils will continue to support industry through these changes – but in terms of 2023 outputs I’d advise referring to our Data Collaboration Explainer, Seller Defined Audiences Explainer, Consent Signals Explainer and the excellent Marketing Measurement Innovation Series overseen by our Director of Research, Natalie Stanbury.” - Jonas Jaanimagi, Technology Lead, IAB Australia
Constructing a versatile portfolio of solutions tailored to specific goals, channels, and regional privacy policies empowers media owners and buyers to navigate the evolving landscape successfully. Proactive testing and swift implementation emerge as the linchpin for success, with early adopters positioned to shape an advertising ecosystem where reaching audiences, monetising content, and safeguarding consumer privacy come together seamlessly.
A resilient future relies on viewing these changes as an investment, underscoring the importance of embracing innovation and adapting strategies not just for survival but for thriving in the dynamic and evolving digital marketing ecosystem set to unfold in 2024.
Adele Wieser is regional managing director, APAC at Index Exchange
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