Digital Advertising Is Set to Enter a New Era – and Brands Need to Be Ready

Geoffroy Martin, Chief Executive Officer at Ogury

The rise of Generative AI dominated media headlines and advertising industry conversations this year. This, of course, aligns with how transformative AI has been for the industry, but although there is no doubt regarding its full potential, something bigger is afoot.

Marketers have less than three months before Google initiates its long-awaited cookie deprecation. Not only that, but consumer privacy protection, often compromised by ID-based digital advertising over the past decade, is now taking centre stage, introducing seismic challenges to brand marketers, online publishers, media agencies, and adtech vendors. Their response to this issue will ultimately shape the future sustainability and success of the industry.

Many have voiced concerns over AI’s threat to human jobs but are consistently failing to recognise how much greater the cookie deprecation’s impact will be. According to a global survey, 41% of advertisers have admitted to knowing little to nothing about cookieless and ID-less targeting methods, and with the new year fast approaching, the industry is in for an abrupt awakening.

Pivotal moments in advertising

To understand this momentous change, we must first dive into what significant periods have defined and redefined digital advertising throughout the years. Namely, the three key waves brought forth by interconnected technological advancements that have characterised the digital ecosystem’s history.

The first was search advertising, enabled by Google’s search engine’s rise to supremacy, which allowed marketers to optimise advertising for customers’ purchasing journeys. Second to that came the meteoric rise of social media, which centred around Facebook’s predominance in collecting consumer data.

Now, we’re at the height of the third wave of digital advertising, also known as retail media. GroupM’s Global Mid-Year Forecast has predicted retail media to increase by 10% this year alone, to an impressive total of $125.7 billion, cementing it as the third-fastest ad channel growth-wise.

The common thread behind the social and retail media eras has been the ability to collect consensual first-party data. While the impact of retail platforms and social media walled gardens cannot be neglected, the focus should shift to the remaining parts of the digital ecosystem, still heavily reliant on identifiers and personal data to accurately target and engage consumers. These industry players’ stubbornness is playing out like a cautionary tale, considering the next big wave in digital advertising is being ushered in in less than three months.

This new ID-less era of advertising is imminent and unstoppable, begging the question, why are so many ad players refusing to recognise the writing on the wall by clinging on to soon-to-be-extinct IDs? Not only are users overwhelmingly rejecting the use of their online data for brands’ own gain, but a legion of privacy regulations emerging globally, from the European GDPR to California’s CCPA, are gearing up for a one-way trip to a privacy-centric future.

Point of no return

Decisive moments like these are often underlined by significant opportunities to pivot in the right direction. As of now, there’s still time for marketers to embrace a new privacy-first paradigm whose scalability matches the ID-based practices the industry has relied on thus far. However, the clock is ticking.

The first step is to embrace the privacy shift. Cookies and ID-based targeting truly are on their last legs, considering the unwavering forces of consumer demands and increasing privacy legislation. There will be no last minute reprieve – today’s privacy-focused world is here to stay.

The second step requires a thorough internal audit of brands’ technology infrastructures, one that identifies any consented first-party data. In understanding their internal capabilities, brands can also recognise what limitations there are to overcome and which tools can support the endeavour.

Lastly, marketers must fully renounce the use of IDs in their targeting strategies, moving instead towards the destinations where content is consumed in the digital sphere. This alternative enables the advertising industry to part ways with the current unsustainable identity-based paradigm and instead deploy a scalable, privacy-first strategy that can sustain marketers once this next wave washes over them.

The same GroupM report expects AI to impact at least half of all ad revenue by the end of this year. Although significant, this disruption should not be prioritised over the end of third-party cookies – whose impact will be felt by all in the more immediate future. The transition to an ID-less digital model will rely on industry-wide collaboration and will only be achieved with the attention of the entire ecosystem. And it must happen now.