"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Judy Shapiro, founder and CEO at engageSimply.
I don’t believe it’s an overstatement to suggest we are witnessing the first real rightsizing of digital media impressions since ad tech became dominated by the quest for scale.
Starting now and over the next 24 months, we will see a perceptible reduction of impressions driven by a combination of factors, including General Data Protection Regulation (GDPR), Ads.txt and even blockchain. Add Apple’s ad-tracking prevention and social media’s fake account purge and I predict we will see 50% of today’s impressions evaporate into digital thin air, based on data I’ve seen internally and from agency and ad-serving partners.
In times of market turmoil, inevitably there are winners and losers, and here is how I see it stacking up.
The big losers
The biggest losers in this rightsizing event are the publishers, ad networks and content syndication platforms whose businesses are totally or partially dependent on scale instead of quality.
The next group of losers over the next 12 months will be impressions that come from social networks, page arbitraging, keyword site builders and ad networks with a lot of indirect publishers. By this time next year, I would say another 15% of impressions will be shed, especially once Ads.txt gain traction.
Finally, by 2020, I believe early blockchain deployments will wipe out about 30% of impressions coming mainly from middlemen players, such as exchanges and content syndication networks that rely on scale businesses.
Advertisers are also somewhat exposed if they bought upfront impressions that become a stranded asset.
The big winners
The clear winners in this rightsizing event will be advertisers and topic-rich, niche publishers. This new landscape will be leaner and more productive but transitioning to this “new normal” will require both advertisers and publishers, together, to adjust their monetization strategies now in three fundamental areas.
The first area is data. For too long, advertisers have been hard pressed to translate digital impressions into real human results. Now, a new generation of quality impressions are being delivered through topic-rich ad networks focused on human themes that span everything from “sustainability” to “facilities management” within transparent buying platforms. Running campaigns through these independent platforms now is critical to allow advertisers to establish new baselines and modeling data in preparation for new trust metrics reflecting the real world.
The second area is performance. The scale business model created value for behaviors, not real outcomes. It’s time to radically change thinking by linking digital media buying to outcome marketing metrics, such as those that Xaxis has started to do.
This is possibly the most painful transition for advertisers and publishers alike because this requires an industrywide cost realignment to replace the cheap scale metrics with realistic CPA costs commensurate with the quality of outcomes. Despite the challenge, this is a rare moment where new value propositions can be developed going back to real business values.
The final area is targeting. A new targeting strategy will be needed to replace the tonnage targeting model that dominates. The new targeting paradigm will look a lot like pay-per-click in its “mindset” targeting technology, with new ways to target specific, real-time topics within programmatic and other channels. Aside from being GDPR-compliant, topic targeting is a proven to convert audiences as Google’s dominance in digital advertising amply demonstrates.
The industry has been demanding a more accountable ecosystem, but until now it was mostly just talk. Now that low-quality impressions are disappearing, the industry has a chance to evolve through quality and accountable digital marketing.