By Patrick Gut, VP, US, Adlook
Advertising Week New York 2023 focused on the major changes happening in the advertising industry. Topics covered included AI and analytics, data privacy, the impact of retail media networks, web3 (yes, it’s still a thing), and the growth of the creator economy.
But what were the major discussions? Which topics will likely shape the industry in 2024? Here are my four key takeaways from the most important topics discussed at the event.
AI: Cutting Through the Hype
AI had a dedicated track at Advertising Week—a fitting development, given IDC’s forecast of an 800% spending increase in Gen AI by 2027, from $16 billion to $143 billion. However, the event also revealed a troubling trend: adtech companies are eager to tout their use of AI but hesitant to provide details. The focus on AI is almost becoming redundant as everyone uses the same terms and general ideas. While the industry celebrates the adoption of AI, there’s a reluctance to share specific applications, possibly due to fear of revealing trade secrets. But AI is not a secret – the emphasis should be on how it’s applied in detail to elevate the industry.
RMN: Outpacing CTV
BCG projects the retail media network (RMN) market will expand by 25% annually over the next five years, reaching $100 billion in spend. This will constitute more than 25% of total digital media spending by 2026. RMN is expanding at a remarkable pace, even outpacing CTV in growth. As that occurs, the focus at Advertising Week was on closed-loop measurement and better understanding each RMN’s audiences. However, what I didn’t hear discussed was the challenge posed by multiple RMNs bidding on the same authenticated ID in off-site extensions for scale, a factor that will drive up costs. The key question then is how to extend RMN reach beyond authenticated IDs.
Privacy: The Unspoken Challenges of a Cookieless World
Everyone was talking about privacy at the show, particularly with Google’s third-party cookie shutdown set for 2024. Brands and vendors were fully engaged in discussions about how targeting and measurement will likely be impacted. Oddly, though, I found there to be a misleading comfort in general discussions about privacy. Many think they’re safe in a cookieless world because they depend on authenticated IDs. However, adoption is slow and the industry needs to be more specific about the challenges of an authenticated versus unauthenticated open-web. The latter is only going to become more likely.
SPO: Beyond Streamlining the Supply Chain
At the start of the year, amid a shakeout in the SSP market, SPO focused on streamlining the supply chain by removing players and partners from the complex adtech web. By Advertising Week, it was clear that the conversation around SPO is evolving as it becomes table stakes. Beyond direct pathways, SPO is now looking to new metrics to help brands optimize the ratio of working to non-working media. Metrics like carbon emissions, via players like Scope3, and attention, through companies like Adelaide and DoubleVerify, are becoming key in enhancing effectiveness and reducing costs. Their combined use offers even greater value.
Sustainability: All Talk, No Action?
Sustainability in advertising is like the recurring character you see in a TV show that you like but goes underdeveloped for seasons on end. This was on display at Advertising Week, where there’s a lot of talk but little action on the issue. Conferences often discuss what could or should be done, yet few share actions taken and results seen. Performance should be included as a cornerstone in discussions about sustainability. It would also be useful for their to be clearer definitions, guidelines and standards for the industry at large. It’s great to see players like Ad Net Zero have a voice.
MFAs: Gen AI Will Accelerate the Problem
Made-for-advertising (MFA) websites continue to siphon off spend, even with increased scrutiny and improved inventory quality due to the SPO push. The issue is likely to worsen as Generative AI becomes more prevalent, enabling the rapid creation of content farms. Bad actors in this space are evolving faster than the industry can counter. However, as Chase Bailey from Kinesso noted on a panel I participated in, one thing these sites can’t conceal is their carbon emissions. Incorporating this metric into SPO strategies could help brands more effectively distance themselves from such sites.
With Advertising Week wrapped, I expect these trends to carry over into 2024. With an election ahead, however, challenges will only grow, and new developments will likely emerge or accelerate. Post-event action will be essential to secure budgets and campaigns for the New Year.