Conference Takeaways: Programmatic I/O Las Vegas

Programmatic I/O brings the digital marketing industry together for updates and/or actionable insights for the programmatic ecosystem. Below are the main takeaways from the 2022 conference hosted in Las Vegas, Nevada.

Streaming/OTT/CTV

The streaming war continues. Even market leaders like Netflix are pivoting their “no advertising [is] coming onto Netflix” (statement by CEO Reed Hastings) strategy and the company is now expecting to launch an ad-supported tier by the end of 2022. Amid consumer demand for more choices, fragmentation of revenue models, and more accessible data analysis tools, content providers are also dealing with record high subscriber churn rates (44% in 2022) and political season on the horizon. To stay relevant and capture disloyal subscribers, advertisers should prioritize content ROI, meet customers where they are, know where they are going, and “drive the data, steer with technology.”

ID Deprecation

Laura Martin, a media and tech analyst at investment bank Needham & Company, spoke at Programmatic I/O with an optimistic perspective and believes that the advertising revenue pendulum will swing back in favor of the open internet and the programmatic ecosystem (opposed to the walled gardens). Her predictions are rooted in privacy changes and the current weaknesses of the open internet.

The strongest programmatic companies such as The Trade Desk and Criteo are clearing the billion dollar mark in ad revenue, compared to the multi billions in ad revenue generated by Alphabet (Google, YouTube), Meta, Amazon, and Disney. Martin forecasted that a “tiny” 1% or 2% shift in budgets from the big platforms could double or even triple the ad revenue for open programmatic. In a consumer privacy-centric environment, these shifts are looking more and more like a reality.

Martin also predicts that Google will continue to delay the cookie deprecation until an open industry solution, such as Unified ID 2.0, reaches scale. Google will likely opt to join that program rather than constructing their own solution. The thought here is that anything Google develops related to tracking and measurement alternatives would inevitably face lawsuits by regulators.

Ultimately, marketers should continue to collect and leverage first-party data to be prepared as the open internet grows, with or without ID deprecation from the walled gardens. If the open internet catches up to the walled gardens with measurable scale, it will be interesting to see which way the big platforms will pivot – will they join the industry solution or develop their own? In either reality, the walled gardens will likely continue to dominate mobile advertising, but CTV is still up for grabs and is another significant driver of programmatic growth year over year.

Clean Rooms

It was one of the conference’s favorite buzzwords. To put it simply, clean rooms are a technological solution that allows advertisers, publishers, and platforms the ability to securely share their own aggregated user-level data without actually sharing any PII/raw data with each other.

Currently, there are two different classes of clean rooms: (1) the walled gardens-operated clean rooms that give brands a look inside their own ecosystem, and (2) an option operated by software companies, acting as a conduit between parties that want to share their data.

Clean rooms allow for a safe environment where all sides can set parameters to what is actually seen. The data stored in clean rooms can be used to gain first-party insights into audiences and measure campaign performance, depending on which partners are participating all while being privacy compliant.

Though clean rooms may seem like a privacy-friendly solution to rich data, they aren’t quite as ready as we would like them to be. Some challenges are that consumers still need to give consent to advertisers before brands share their data, along with issues scaling because most clean rooms are operated one-to-one (partner-to-partner). Essentially, clean rooms take a lot of legwork that does not currently exist—because rather than doing that leg work “we’ve used legacy technology that’s been somewhat abusive to the perception of consumer privacy,” according to Nancy Marzouk, CEO of MediaWallah.

In summary, there are still many unknowns ahead for our industry. One thing everyone can agree on is that you need an identity solution, period. To stay competitive, advertisers need targeted strategies backed by big data. Make the most of your data in a user privacy-centric world to stay ahead.

This article is featured in Media Impact Report No. 36. View the full report here.