The continual commentary regarding online privacy in the press and on social media is escalating consumers’ concern over the security of their personal data, which has ramifications for the overall financial health of the ad-supported digital economy.
The “IAB Outlook: 2022 Digital Ad Ecosystem” report makes tough reading for digital advertisers, and paints a picture of a sector that must swiftly reinvent itself to survive in this rapidly-evolving landscape.
IAB and PwC led a series of candid and anonymous interviews with nearly 20 industry leaders across the Buy-and-Sell side of the industry to inform the report.
“We are at an inflection point: invest or languish,” warns the IAB. “Make advertising a better part of the broader media experience: more flexible, iterative, agile and an ‘always-on’ part of how companies consider and engage with consumers for a more holistic and value-driven experience.”
The report highlights two trends in particular which advertisers should heed.
Waning consumer tolerance for (and expectations of) digital advertising is impacting the composition and size of audiences of ad-supported media and entertainment brands. A consumer-centric evolution is upon us and should include the development of new ad formats/resources/partnerships.
Federal government attention, as well as keen focus from this industry, is required to reimagine and prepare for regulatory changes in privacy policies and additional actions by walled gardens.
To counter the former, advertisers are urged to consider whether the consumer “wants this ad message and format from this brand embedded in this specific experience.”
It encourages experimentation that “shortens the purchasing funnel,” and an overhaul of measurement and monetization models.
On the latter, one unnamed ad exec says, “The industry should be educating consumers about what their information is being used for and how it’s being used, allowing them to make the choices they deem best for them.
“This should be the responsibility not only of advertisers, because they’re the ones using that information, but also data providers, whose business models include tracking consumers’ digital behavior, particularly shopping and spending habits, collecting and storing information.”
The warning arrives in the context of the elimination of third-party cookies (though delayed until mid-2023) and mobile identifier changes. These are creating “a tectonic shift” for many industry players who must “reimagine strategic planning and budgeting” for future brand growth.
READ MORE: IAB Outlook: 2022 Digital Ad Ecosystem Report (IAB)
Globally, as well as in the US (including state by state), regulators continue to debate how to best protect consumer data. And while they are particularly focused on tech platforms — such as consumer data management concerns and free speech rights — many industry players struggle with a business model that requires adhering to regulatory standards while remaining competitive and growing revenue.
“Without the development of alternative, consumer-safe solutions for delivering personalized ad experiences, economic and operational disruption is on the horizon,” the report lays out.
Commenting to The Drum, IAB chief executive David Cohen said: “This report makes it crystal clear that we must acknowledge that consumer expectations are rapidly changing. Irrelevant and increased ad loads are not the solution. They want better, more useful ad experiences. They want us to re-focus on their needs, reimagine ad formats and reinvent what advertising can be. The next creative revolution needs to be about utility, not just cleverness.”
READ MORE: IAB US offers advice to marketers ahead of digital ‘tectonic shift’ (The Drum)
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