Data-Driven Thinking is written by members of the media community and contains fresh ideas on the digital revolution in media.
Todays column is written by Eric Picard, chief product officer at Yieldmo.
Theres a revolution happening in digital media, primarily driven by a new focus on privacy. Major players at the core of the digital ecosystem have decided that privacy is a core value, and have made fundamental changes that block many standard practices. This change is going to upend the industry as we know it, and offers huge opportunities for anyone in the right position to take advantage of it.
Lets work our way from where weve been to where we are, and then talk about where were going.
Wave 1: In the beginning (1996-1998)
The first wave of ad tech was about establishing scalable ways to operate the digital advertising business. Someone had to figure out how to sell ads in advance of the campaign running, how to implement and operate campaigns, how to track delivery and how to bill customers. We saw the rise of ad servers, the creation of sales and ad operations tools and workflows and the invention of buy-side ad serving. And we saw significant growth.
Wave 2: Formats, Targeting, Tracking, Attribution 1.0 (1999-2001)
After the basics got sorted, we saw innovative work in rich media ad formats (things like interactive ads, video, audio, visual effects, over-the-page, expanding ads, etc.). My first startup, Bluestreak, developed many of these formats. Across the industry we saw significant innovation in targeting of ads. (User behavior was tracked and turned into audience segments, which could be sold.) And a new attribution discipline emerged to measure what happened after a person saw or clicked on an ad.
Wave 3: Remnant Monetization, Multi-Touch Attribution, Yield Optimization (2002-2006)
When the "dot-com" bubble burst in 2001, the average CPM of display ad inventory dropped from about $25 to about $0.50 in the course of a year. All the peripheral ad tech companies that had been charging ad-on fees for rich media and targeting began to struggle that is, until they eventually realized they could sell directly to publishers as a way to drive yield. In the hunt for revenue at any cost, and as vast numbers of smart sales people got laid off, someone figured out that secondary and even tertiary ad marketplaces could be used to monetize every single impression at some price. This model was in some ways a mistake, because it further devalued inventory, which was already under price pressure. It took a long time for this wave to end, and in some ways it still hasn't ended.
On the buy side, advertisers began to realize that last touch attribution was obscuring the real drivers of conversions, falsely rewarding some channels, specifically paid search. Sadly, some advertisers still use last-touch models.
Wave 4: The rise of programmatic (2007-2014)
A few really smart people realized that remnant marketplaces were evolving similarly to commodities and securities marketplaces. And they began building auction-based exchanges that sold inventory in much the same way paid search was sold.
This wave was incredibly powerful and it supercharged the industry. As we saw with the evolution of electronic exchanges in securities, the market moved away from daisy-chained tag-based auctions to real-time bidding (RTB). This extensible infrastructure also led to opportunities for nefarious actors to make money by fraudulently selling fake ads, defrauding advertisers and publishers of billions of dollars over many years. And a massive investment in the data infrastructure has led in many ways to a surveillance state that allows almost any company to track peoples behavior across the entire internet and build targeting segments that can be used to buy them as advertising.
Wave 5: Privileged Programmatic and Fraud Cleanup (2015-2020)
As it matured, programmatic advertising continued to walk in the footsteps of the securities exchanges. The largest ad buyers and sellers began to recreate privileged relationships inside the new RTB infrastructure. Examples include PMPs, first look mechanisms like header bidding and Prebid. It is now possible (but will take a while) to completely recreate all the ways ads have been sold historically on top of RTB infrastructure, but the eventual result will be a much more scalable and automated way of doing business.
Similarly, the massive and hidden problem of fraud was uncovered, and measures were taken to root it out. Industry efforts like Ads.txt and Sellers.json, and whole new companies and technologies for fraud detection and prevention, has set the industry on a path to solving this crisis. The result: a massive maturation of the ecosystem.
Wave 6: Privacy - Centric Advertising, New Format Innovation and Supply-Chain Optimization
Meanwhile the surveillance state weve found ourselves in has led to a huge backlash against third-party tracking that is upending the ecosystem again.
Over the last few years we've seen major initiatives by the technology industry to establish and enforce new privacy controls across all media. This trend is accelerating and broadening, and many of the mechanisms we've taken for granted in online advertising have been ruled privacy-unsafe, and are being phased out. Many companies in the space have doubled down on a commitment to these older tracking approaches, and are trying to find a path through that perpetuates them. I will hazard a prediction that this is not going to work.
The time is coming to an end when companies with no relationship to the consumer can track those consumers behavior across the internet and then sell that data. This evolution will strengthen companies that do have a direct (i.e. first party) consumer relationship, such as advertisers and publishers. It also is helping the largest incumbents like Facebook and Google, who have immense amounts of first-party data.
Technology providers will need to find ways to evolve their offerings such that they support the direct consumer relationships held by the advertiser and/or the publisher. This will mean in many cases either a completely new approach, or a set of innovations in how technology is integrated with the first-party companies' infrastructure. The great thing about disruption is that it leads to new innovations.
Because the third-party data and tracking infrastructure is becoming less valuable, new ways to increase the value of ad opportunities will come to the foreground. Format innovation is back in the mix as a way to increase the value of inventory without breaching privacy protections. And the next wave of supply cleanup, after the war over fraud, will ensure supply chains are clean and optimized, with low-value suppliers shuffled out of existence.
Supply-chain optimization has been emerging as a focus area since around 2014, but now is becoming mainstream. The first round of supply-chain optimization was 'brute force' and ugly, but we're now seeing intelligent and powerful supply-chain optimization enter the market, as well as industry initiatives like Sellers.json. These new technologies, initiatives and approaches are driving advertiser value and publisher yield significantly.
More here:
The 6th Wave of Advertising Technology: Privacy - AdExchanger
- Report: Apple acquires French startup behind AI and computer vision technology - 9to5Mac - April 22nd, 2024 [April 22nd, 2024]
- CACI Awarded $1.3 Billion Task Order to Provide Communications and Information Technology Expertise to U.S. ... - Business Wire - April 22nd, 2024 [April 22nd, 2024]
- What is semi-automated offside technology and how does it work? - The Athletic - April 22nd, 2024 [April 22nd, 2024]
- Can technology save us from an ecological apocalypse? - interview - CyberNews.com - April 22nd, 2024 [April 22nd, 2024]
- Does LaLiga have goalline technology? What about other major leagues? - AS USA - April 22nd, 2024 [April 22nd, 2024]
- Driver Assistance Technologies: NHTSA Should Take Action to Enhance Consumer Understanding of Capabilities and ... - Government Accountability Office - March 31st, 2024 [March 31st, 2024]
- OpenAI reveals Voice Engine, but won't yet publicly release the risky AI voice-cloning technology - The Associated Press - March 31st, 2024 [March 31st, 2024]
- Nexalin Technology Full Year 2023 Earnings: US$0.63 loss per share (vs US$0.30 loss in FY 2022) - Yahoo Finance - March 31st, 2024 [March 31st, 2024]
- 'Battle for your brain': What the rise of brain-computer interface technology means for you - WBUR News - March 31st, 2024 [March 31st, 2024]
- Firsthand Technology Value Fund (NASDAQ:SVVC) Research Coverage Started at StockNews.com - Defense World - March 31st, 2024 [March 31st, 2024]
- Suzhou Anjie Technology Full Year 2023 Earnings: Misses Expectations - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Inside the shadowy global battle to tame the world's most dangerous technology - POLITICO Europe - March 31st, 2024 [March 31st, 2024]
- The Technological Pivot Of History: Power In The Age Of Exponential Innovation Analysis - Eurasia Review - March 31st, 2024 [March 31st, 2024]
- 'Women Behind the Wheel' explores the intersection of gender, culture and cars - NPR - March 31st, 2024 [March 31st, 2024]
- Shanghai Weihong Electronic Technology Full Year 2023 Earnings: Revenues Beat Expectations, EPS Lags - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- A Look At The Fair Value Of Powertech Technology Inc. (TWSE:6239) - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Weaver Network Technology Full Year 2023 Earnings: EPS Beats Expectations, Revenues Lag - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- New York City will introduce controversial AI gun detection technology amid subway crime crisis - SiliconANGLE News - March 31st, 2024 [March 31st, 2024]
- Earnings Not Telling The Story For Beijing CTJ Information Technology Co., Ltd. (SZSE:301153) - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Vontron Technology Full Year 2023 Earnings: EPS: CN0.35 (vs CN0.34 in FY 2022) - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Huawei Revenue Rises as Technology Giant Commits to Growth - Technology Magazine - March 31st, 2024 [March 31st, 2024]
- Shenzhen Fortune Trend technology Full Year 2023 Earnings: Beats Expectations - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- USPACE Technology Group Limited (HKG:1725) May Have Run Too Fast Too Soon With Recent 28% Price Plummet - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- NYC to test gun-detecting technology in subway system - SILive.com - March 31st, 2024 [March 31st, 2024]
- Cancer Treatment: 3D Printing and Scanning Technology - Surviving Mesothelioma - March 31st, 2024 [March 31st, 2024]
- Does Contel Technology (HKG:1912) Have A Healthy Balance Sheet? - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Oppo Find X7 series now supports 5G-Advanced technology with up to 10 Gbps downlink speed - The Indian Express - March 31st, 2024 [March 31st, 2024]
- DCPS receives nearly $20k in grants for technology program advancements - The Owensboro Times - March 31st, 2024 [March 31st, 2024]
- Hangzhou Electronic Soul Network Technology Full Year 2023 Earnings: Misses Expectations - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- International Business Digital Technology Full Year 2023 Earnings: CN0.07 loss per share (vs CN0.019 loss in FY ... - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Analysts Are More Bearish On Guangzhou Tinci Materials Technology Co., Ltd. (SZSE:002709) Than They Used To Be - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Daheng New Epoch Technology Full Year 2023 Earnings: EPS: CN0.11 (vs CN0.16 in FY 2022) - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Tesla offers U.S. customers a month's trial of its driver-assist technology - Reuters - March 31st, 2024 [March 31st, 2024]
- Slam Dunk Technology: How AI Is Revolutionizing The Game Of Basketball - Forbes - March 31st, 2024 [March 31st, 2024]
- China Environmental Technology and Bioenergy Holdings Full Year 2023 Earnings: CN0.03 loss per share (vs CN ... - Simply Wall St - March 31st, 2024 [March 31st, 2024]
- Vuma and Huawei team up to launch industry first 50G PON ... - Light Reading - July 15th, 2023 [July 15th, 2023]
- See What Kim Kardashian and Kylie Jenner Look Like With Aging ... - E! NEWS - July 15th, 2023 [July 15th, 2023]
- AFRL conducts swarm technology demonstration > ONE AFRL ... - afrl.af.mil - May 20th, 2023 [May 20th, 2023]
- Shell to use new AI technology in deep sea oil exploration - Reuters - May 20th, 2023 [May 20th, 2023]
- Former Google CEO says AI at 'center' of technology competition between US and China - Fox News - May 20th, 2023 [May 20th, 2023]
- Agriculture and technology combine to drive the industrys growth - Times of India - May 20th, 2023 [May 20th, 2023]
- Technology and the Skills Shortage - Financial Times - May 20th, 2023 [May 20th, 2023]
- New License Agreement Announced for Next-Generation Base ... - BioPharm International - May 20th, 2023 [May 20th, 2023]
- Orion Governance Licenses Technology from GE to Deliver Next Generation Data Governance Solution - Yahoo Finance - May 20th, 2023 [May 20th, 2023]
- World needs to be 'vigilant' as AI technology improves and ... - KTVZ - May 20th, 2023 [May 20th, 2023]
- After Losing Son, Ridgefield Mother Pushes For Technology to Prevent Hot Car Deaths - NBC Connecticut - May 20th, 2023 [May 20th, 2023]
- After last year's fan violence in Queretaro, has Fan ID technology ensured safety for Liga MX fans? - ESPN - ESPN - May 20th, 2023 [May 20th, 2023]
- Bleach: The Soul Reapers' Gigai Technology, Explained - CBR - Comic Book Resources - May 20th, 2023 [May 20th, 2023]
- Cogito Tech - Catalyzing Transformation in Global Healthcare ... - Business Standard - May 20th, 2023 [May 20th, 2023]
- Barriers to Use of Technology in Diabetes Management - Patient Care Online - May 20th, 2023 [May 20th, 2023]
- Blue technology startups presented at the inaugural Gulf Blue ... - The University of Southern Mississippi - May 20th, 2023 [May 20th, 2023]
- CureVac files expanded patent lawsuit against Pfizer/BioNTech over ... - Reuters - May 20th, 2023 [May 20th, 2023]
- Harrison Ford defends use of de-ageing technology in new Indiana Jones film: I know that that is my face - Yahoo News - May 20th, 2023 [May 20th, 2023]
- Sanwo-Olu: Nigeria needs technology to compete with likes of China - Guardian Nigeria - May 20th, 2023 [May 20th, 2023]
- Prejudice in technology, and the necessity of time: Books in brief - Nature.com - May 20th, 2023 [May 20th, 2023]
- New technology uses ordinary sunlight to disinfect drinking water ... - Stanford University News - May 20th, 2023 [May 20th, 2023]
- Incredible AI technology shows what UK cities will look like in 2050 - LADbible - May 20th, 2023 [May 20th, 2023]
- Your Firm and Your Tools - Top Technology Initiatives - CPAPracticeAdvisor.com - May 20th, 2023 [May 20th, 2023]
- Tom Hanks: I could appear in movies after death with AI technology - BBC - May 20th, 2023 [May 20th, 2023]
- Transform your career with Chief Technology Officer online course - Economic Times - May 20th, 2023 [May 20th, 2023]
- e-Learning Jamaica Technology in Education Conference Slated for ... - Government of Jamaica, Jamaica Information Service - May 20th, 2023 [May 20th, 2023]
- Andrew Maynard | What's a Luddite? From Industrial Revolution to ... - TribDem.com - May 20th, 2023 [May 20th, 2023]
- At Yale, Kaloyan Kolev used technology to create and to make ... - Yale News - May 20th, 2023 [May 20th, 2023]
- This technology could alter the entire planet. These groups want every nation to have a say. - MIT Technology Review - April 17th, 2023 [April 17th, 2023]
- The secret lives of snakes and how Georgia College uses technology to study them - 13WMAZ.com - April 8th, 2023 [April 8th, 2023]
- Technology Innovation Institute to host 2nd 'Additive Manufacturing the Future' seminar in Abu Dhabi - Devdiscourse - April 8th, 2023 [April 8th, 2023]
- Can Array Technologies Inc (ARRY) Stock Rise to the Top of Technology Sector Thursday? - InvestorsObserver - March 31st, 2023 [March 31st, 2023]
- Here's Why We Think Pfeiffer Vacuum Technology (ETR:PFV) Might Deserve Your Attention Today - Simply Wall St - February 18th, 2023 [February 18th, 2023]
- Will WM Technology Inc (MAPS) Stay at the Top of the Technology Sector? - InvestorsObserver - February 18th, 2023 [February 18th, 2023]
- Ways in which technology can enhance the abilities of law enforcement agents to assist the community - Times of India - February 7th, 2023 [February 7th, 2023]
- Meet The Titans: Google And OpenView (Microsoft) Faceoff On Chat Technology Innovation - Forbes - February 5th, 2023 [February 5th, 2023]
- MACOM Technology Solutions Holdings, Inc.'s (NASDAQ:MTSI) Stock Has Been Sliding But Fundamentals Look Strong: Is The Market Wrong? - Simply Wall St - February 5th, 2023 [February 5th, 2023]
- WVU Dept. of Ophthalmology acquires state-of-the-art technology for simulation lab - WV News - February 5th, 2023 [February 5th, 2023]
- Executive Vice President of Technology & Operations Alok Sethi Just Sold A Bunch Of Shares In Franklin Resources, Inc. (NYSE:BEN) - Simply Wall St - February 5th, 2023 [February 5th, 2023]
- Is Now The Time To Put Amkor Technology (NASDAQ:AMKR) On Your Watchlist? - Simply Wall St - January 27th, 2023 [January 27th, 2023]
- There Are Reasons To Feel Uneasy About New Oriental Education & Technology Group's (NYSE:EDU) Returns On Capital - Simply Wall St - January 27th, 2023 [January 27th, 2023]
- Technology has set us on a path toward one of two dystopian scenariosbut its not too late to save democracy - Fortune - January 17th, 2023 [January 17th, 2023]
- IonQ Acquires Entangled Networks And Locks In Quantum Networking Technology Critical To Its Future Success - Forbes - January 10th, 2023 [January 10th, 2023]
- Industrialization 3.0 - How Technology, Wall Street, And The Government Can Help The US Win In A World Of Re-Industrialization - Forbes - January 10th, 2023 [January 10th, 2023]
- Connect with aspirational India through technology and work in interest of world: Anurag Thakur to NRIs - Economic Times - January 8th, 2023 [January 8th, 2023]