On 2020 In Publishing and AdTech

Here we are folks, 2020 - the great new decade of automation. Humanity has come far enough, it's time to let the robots takeover in everything...except Adtech and Publishing. Don't count the humans out just yet...

When asked in the latter half last year, I said the industry feels a little stale, perhaps a little too status quo. The proverbial snow-globe was settling and the we could see clearly how the storms of the aughts and teens sifted, drifted and shifted our eco-system. However, with the symbolism of a “new start” on the horizon, I am optimistic that this is a great turning point for adtech and media.   And oh boy, we have started the decade with a bang!

Since this is the year of "perfect hindsight", we're going to take some clues from our past to shape our future vision...

As we have seen the cycles of this business churn a few times, the seared business plans are teaching lessons now, and those hard lessons are forging stronger, more resilient companies. It is always the tectonic shifts that make mountains (and deep valleys!) in the industry: RTB, Mobile, Native, Social, Video and now, Privacy. Especially true for this year, we will get to see how privacy concerns ripple through platforms and ecosystems and how lessons of yesterday’s ad networks determine the playbooks of today’s SSPs and DSPs. Buckle up!

Please enjoy these thoughts and thought starters. I’m always here for a conversation and to learn about how you see the world. Thank you and welcome to the new decade!

 The Industry:

1)   Sun Is Still Rising: Sunshine is the best disinfectant and it is getting harder and harder to be a shady player. Without stifling innovation (hopefully!), 2020 will be the year that more pubs get clean, more buyers appreciate clean environments and fraud finds fewer places to spawn.

2)   Scale is Dead: Not really, but it’s not cool any more. Marketers are weary of “we reach everyone” and publishers have to stop chasing social arbitrage. Having curated, dedicated audiences and quality journalism are gold; marketers will start paying attention to their media partnerships and understand the value of investing in their quality partners.

3)   Golden Era of Header Bidding: Everyone has one now and the established players are setting their footholds. We see wrappers from or directly supported by exchanges and those from pure managed-service companies. Ask yourself, what is an SSP; what differentiates a pipe; what makes this unique? 

2020 will see an arms race among providers, and there will be losers. The winners should be publishers (you know, their clients!) who are now empowered to control their own their demand paths.

4)   Vertical Platform Plans: When advertising on your site is no longer enough, you have to go further, but how far? We see Amazon, Vox, WaPo and more employ strategies that create vertical advertising businesses stretching beyond tradition. The new moat is a wall.

5)   Employment Arrangements: Employee protection laws and unions are reshaping today’s gig economy. Those with thoughtful plans will prosper and those who refuse or ignore this new reality will suffer.

 What’s Hot:

1)   DTC: Still crushing but the energy has recently waned. Sure now they’re members of the IAB (different post!), but now they have physical retail locations, are selling themselves to the old guard, and finding out that profitable loyalty is hard. I feel like they're stalling out a bit and leaving room for DTC itself to be disrupted. Oh yeah, and that Coolest Cooler company finally is paying out on Kickstarter’s largest disaster ever.

 2)  Brands Connecting with Consumers: I really love how Marriott is making moves with their content strategy. We can see so many brands needing to rebuild this connection, and only those who embrace their relationship with their audience can actually develop one. For instance, CPGs, which traditionally lack consumer relationships (hello, toothpaste!), are still fighting their age-old relevance battles, but with some shiny new tools (social platforms, faster feedback loops, and CDPs). Similarly, QSRs are playing for keeps right now and everyone should take a page from the chicken sandwich playbook.

 3)   ID Consortiums (for all the wrong reasons): Sounds great, feels wrong. I’ve looked at handful of startups and incumbents in this space and regarding the need for a publisher owning a device graph, I always hear:

a.   We must band together to fight the walled gardens

b.   Publishers will have all the power and CPMs will rise when this happens

Okay, yes, that sounds good. But wait, who owns this ID Platform? How do they benefit? What’s the short term vs. long term trade off here? How do I increase CPMs?

The underlying fallacy here is that Publishers have a dire need for an ID system of their own. There are very few publishers who can benefit directly from owning a device graph or identity eco-system; good for those folks! For the rest, we really just leave it up to marketers to use the identity data and publishers just help facilitate ID passing.

 Aside from critically needing to pass the IDs in bid streams for marketers to use, publishers can’t really use these systems without significant lifting. Identifying users is step one, step two is knowing something about that user. So if your DMP is not your ID system (or if your ID system says “we’re not a DMP”), then you need to maintain a match table between the two systems and pass both sets of identifiers into all of your analytics systems. If you can pull that off, you’re still at the beginning question of “how do I monetize my user data.”

 4)   CTV Advertising: We’re not quite tipping the “Let’s get the TV dollars” scale yet, but it’s getting closer. On interesting point I heard through 2019 is that targetable nature of addressable TV will undermine the idea of “scale,” which then makes the value proposition of CTV advertising inherently different than traditional TV. If addressable TV dominates as it did for web and app, can marketers still use CTV for broad reach campaigns? Careful what you wish for!

 5)   Consolidation (everyone’s fave): We ended 2019 with some big bang consolidation (ex. Taboola/Outbrain and Telaria/Rubicon) but we’ve still got a long way to go. You know that 2020 has shakeout city written all over it. 

 6)   The Hidden Web: As privacy concerns rage, finding your users will be harder. This will be “The Hidden Web.” Check out the note below on 3rd Party Targeting for more details.

 What’s Not:

1)   One-Offs: Sorry folks, this is going to be a rough year for the one-trick ponies. If your company does one thing, and you do it kinda okay compared to your competitors, you might want to skip the multi-year lease on the top floor. This follows my “features vs. platform” rationale: great feature products will be destroyed (copied!) by the platforms. Platforms are the ones that have a level of "interconnectedness" that let’s all players have meaningful representation, perhaps in a self-serve manner. Take a look at your eco-system, are you plugged-in? Hint: if your "one line of code" is one line of code away from being included in someone else's platforms, you have a problem.

 2)   Looking the Other Way: Stop ignoring your bad behaviors. Stop arbitraging for survival, stop the clickbait, stop the data-leaky units. 2019 brought us a year of sunshine, now it’s your part to get clean and enjoy the freedom of operating above board. 

Here's some advice for everyone, especially those just getting started in AdTech: Your grandmother may not understand what you do for work, but if she did, would she be proud of you?

 3)   3rd Party Targeting: Cookies are toast, burnt toast. Actually, they’re more like ghosts: kinda there, kinda not. Here's what's happening:

• Third Party Data is the foundation of the last 20 years of adtech and the basis of so many business models: shopper re-targeting, propensity modeling, and attribution (MTA!). So as browsers continue to crush them, two things will happen here, very fast….
• Fewer 3PD “data” companies will be setting 3PD cookies, meaning less demo info, less everything. Even the best panel data will have to be cookierized or tied to an ID, so don’t expect this data to be ubiquitous like before...perhaps more accurate but definitely not more widely available.
• Of the 263M US digital users, currently about 70% of them are generally findable through cookies today (Adblockers, Safari, ITP, etc), and this number will continue to decrease.   As that number decreases, more and more of your target demo will “disappear” from the identifiable web as they become part “the Hidden Web.” For clarity, there won’t be fewer 18-34 Females online, you just won’t be able to identify them through cookies. 

So, If you are only targeting only 40% of your shoppers, how do you find the other 60%? Yup, contextual targeting and trusting publishers to find audiences.

Here’s what we’re going to work on for marketers… Publishers can help tell you who and how to target. Point publishers in the right direction, and we will use our tools to help you pinpoint other people likely to convert or be in your target scenario.

Keep an Eye Out:

1)   CTV Consolidators / TV Ad Networks: We’ve seen this game before: as demand outstrips supply, we get exclusivity deals (ad networks!), and then later when supply multiplies, access to inventory is democratized amongst ubiquity. Unlike the 2000’s, we have a slightly different intermediary play here in CTV…video creators do not own their distribution. That sits with the likes of Pluto.tv (Viacom/CBS), Xumo (Comcast), Tubi and of course, Youtube. Thus, publishers will be subject to their sales success, so we should expect guarantees for content to roll out on specific platforms. In a way, these platforms are the ad networks of yore, and we remember how the MVNs consolidated power (arguably successfully) to provide creators bargaining leverage and financial support…then they got acquired or destroyed. If you’re a platform in the middle (Telaria, Spotx, Google, ??), where does your packaging and access fit? 

 2)   CTV Data Strategy: Who made all the money in the gold rush? People selling shovels and maps. This will not be just a 1:1 transition from the current digital data landscape; rather, we will see strange bedfellows emerge, as great tech and great data need each other… and DSPs need both.

 3)   Walled Garden Dominance: We know that they have significant dominance, but their weaknesses are showing. Three major forces against them are government, people and competitors. The way I see it… People start the cycle, government climbs on board with investigations and regulations, and then there is a small window moment for competitors to strike. To enter successfully, competitors must offer a compelling, integrated replacement (…or better) that has its own benefits. This is not easy: it’s hard. Think about trying to replace a search engine, or hyper-targeting platforms, or unified demand systems… too much? Okay how about replacing a plastic straw— have you ever tried drinking a milkshake with a paper straw?

 4)   TAG Takes a Step Forward: I’m fairly active in the TAG Certified Against Fraud Working Group, representing publishers. We’ve worked to remove things like the Publisher Sourcing Disclosure Requirement and we are applying continual pressure on the ecosystem to align itself through certification. Sure, there are still opportunities for improvement and I think we're still a few years away from a real meaningful system, but with greater refinement comes more adoption and then more “teeth” can be added, and ultimately there will be fewer places with “leaky pipes” where fraud can flourish. You can shout all you want from the sidelines, but you're not helping anyone.

 5)   Demand Path Optimization: I firmly believe that publisher’s hold the keys to unlocking advertiser “working media” value. Whether it is helping optimize open auctions for partners, or rolling out preferred-channel PDs and PGs for clients, publishers are going to have a lot to say in 2020 about how their inventory gets purchased. Publishers should be in the business of showing buyers the best path to get your inventory, why would you want to anything else. Shout out to Erik Requidan for coining this acronym in 2017, and thank you for letting me borrow and expand upon it :).

6) Clean Rooms: This is a relatively new concept, but gaining a lot of traction for advertisers and soon publishers. These areas allow users to bring multiple sets of sensitive data, perform analysis and then separate insights from source data. The result is a privacy compliant combination and use of audience data. With Google's 2-year killer of 3rd party cookies coming, their product investment in Ads Data Hub and their hints at the tracking function within Chrome, I'd say that ADH will be the model for Chrome audience usage. Other browsers that don't offer a path forward for "responsible tracking" would suffer from lower usage (volume, CPMs, etc), but then again, those browser owners don't have a stake in advertising revenue...

This idea of a browser identity storage solution where you can "rent" storage and do as much targeting as you want, but you don't "own" the user (cookie). You can build profiles, but you can't combine them in crazy ways, and users can just opt out/block from the browser itself. Its kind of like how you use Facebook for audience building and targeting: you can push data in, you can build and target, but you can't go granular (1:1 targeting) and you can't export the audience. Chrome may understand that they need to provide a stable, shareable eco-system so that "adtech" can continue to their benefit. Good news for re-targeters, CPG and publishers who have super valuable contextual signals!

 Closing Thoughts:

This is one of those years where enough of everything is in flux, up for grabs if you will, and you (publishers!) have a true opportunity to put your mark on the industry. 

 If you’re on the strategy end of your business, think about the cycles or pendulums of change and what we “are going back to.” Consider what the platforms must be, what air is left after their deep breaths, and where you can find the daylight between their dominance. With equal and opposite reactions, everything moves in some sort of pattern—you just have to spot it and ride it.

 Lastly, take a moment to be healthy. Life is a grind, but that doesn’t mean you need to be in the grinder every day. Mental health is real and pervasive. You never know what someone is dealing with, so be kind if you can. Actually, just always be kind.

Good luck in 2020, let’s do this!

-Scott