Category: insights

The Journey for “Consumer Privacy Norms” started in 2017 and has been the main driver behind new industry adoption of data regulations, tracking limitations, and data access. Industry response has led to updates that have demonstrated impact across the ad technology ecosystem, from basic conversion limitations to advanced measurement and targeting restrictions. One such advanced measurement & data coloration effort has been towards “Data clean rooms.”

Consumers are becoming more vocal about how their data is used and requiring transparency on when it is used by brands and companies. This is driving platform partners to limit the use of cookie technology (along with MAIDs), which are major drivers behind overall signal deprecation in the industry for advertising purposes, and national and regional regulations are governing the use of data in jurisdictions across the world. This evolution is instigating massive change. One thing we know for sure is that first-party party data will be resilient through this shift. Thus, building a strong foundation of owned first-party data assets is essential for marketers.

When Apple introduced the new App Tracking Transparency Framework (ATT) to iOS 14.5 devices on April 26^th 2021, it was expected that the policy would disproportionately impact social media apps like those from Meta, that use off-platform data signals to power ad personalisation and measurement. The industry consensus – and warning from Meta – was that advertisers were likely to experience rising costs; in their Q2 2022 earnings call, Meta cited “signal loss from Apple’s iOS changes” as a continued challenge, with CFO David Wehner forecasting earlier in the year that the overall impact of iOS as a headwind on the business in 2022 would be in the order of $10 billion*.

But was the impact felt by agencies and advertisers? Natalie Carder, Head of Paid Social at Zenith, reflects on the global effect of ATT on Meta advertising costs.

• Year-on-year analysis found that the ATT update had a mixed impact, with differences expected due to a geographically varied mobile operating system market share as well as varying degrees of reliance on off-platform signals for targeting or optimisation, according to advertisers’ marketing goal.
• In iOS dominant markets like the US and UK, there are signs that website sales-focused investment shifted from iOS towards Android after ATT, suggesting a loss in signals from iOS devices. There was also an upwards trend in traffic costs on iOS devices compared to Android. However, the impact on end ROAS varied with advertiser agility. Advertisers who embraced experimentation overcame the impact of signal loss through strategic optimisation. Black Friday results for one global advertiser show the benefit of a test-and-learn framework, with YoY ROAS in the UK increasing by more than 50%.
• Cost-impact on brand metrics is harder to unpick, but analysis of some of our largest global advertisers suggests a year-on-year reduction in CPMs in iOS dominant markets, with average CPM falling 10-50%.
• Similarly, in Android dominant markets, both brand and performance advertisings costs were more likely to trend downwards than upwards.
• Overall, the average price-per-ad decreased 18% year-over-year according to Meta’s Q3 earnings results.

So, it would seem like the headwinds of ATT were not felt with the severity that Meta and the wider industry predicted. Clearly there were other auction-dynamics at play, or perhaps we have our agency specialists to thank for diligent optimisations.

*Sources:

Analysis based on 2022 YTD average CPM and average CPLC vs 2021, select global clients

Meta (2022). Q2 2022 Earnings Call Transcript, Meta (2022). Third Quarter 2022 Results

Welcome to Zenith’s Business Intelligence report on beauty and personal luxury, the third in a series that analyses the advertising, business and consumer behaviour trends shaping different categories.

Benoit Cacheux, Global Chief Digital Officer at Zenith, recently joined the virtual panel, “Understanding identity, behaviour and context,” at Mediatel’s The Future of TV Advertising Global conference. This event was moderated by Cadi Jones, Commercial Director EMEA at Beeswax, and Benoit was joined by Lara Izlan, Director, Advertising Data & Analytics at ITV, Steve Martin, MD International Data at LiveRamp and Miles Pritchard, Managing Partner – Data Management Solutions at OMD. Below are some of the areas the group discussed with Benoit’s contribution.

Survival of the third-party cookie post the upcoming Chrome changes.

With Chrome reaching a global penetration of 70%, and Safari and Firefox at about 18%, it has become very clear that the third-party cookie in its current form is unlikely to survive. However, we see new ideas coming up on how to replace the third-party cookie and are very positive about what the industry is doing to reinvent digital marketing.

First party data has never been more important, especially for advertisers who have been reliant on third party data. A deep focus on first party data can help advertisers unlock new opportunities for efficiency and effectiveness.

We see many interesting initiatives worth evaluating and testing; think what the TradeDesk is doing with their unified ID 2.0, what ID5 is doing with publishers, clean rooms for log-level analysis, Google with Ads Data Hub on Google Cloud, Liveramp, etc.

Last year, Publicis Groupe acquired Epsilon, a leader in data, which built an identity graph that is not reliant on third party cookies. We’re using this opportunity to share their latest survey on this topic, which is available here.

Headlines from their survey shows the level of anxiety these upcoming changes are creating:

1. Most marketers are very or moderately reliant on third-party cookies.
2. Less than half of marketers feel “very prepared” for the change.
3. Actual benefits to consumers are in question.
4. Seventy percent of marketers believe digital advertising will take a step backward.

The depreciation of the third-party cookie and the potential impact for addressable TV and premium video.   

Whilst the changes linked to the post-cookie world are not positive (GDPR was the first big negative impact on the digital user experience, and the disappearance of third-party cookies could be the second significant trigger for an even worse user experience), you have to be objective about the current situation and where the money goes when we talk about addressable TV and online video. The reality is a large majority of this inventory is not reliant on third-party cookies (including Adsmart, broadcast video-on-demand, YouTube and video on social platforms).  

Back to the future, are we entering a new era for contextual targeting?

There’s no doubt contextual targeting is growing; we’re seeing industry stats confirming its growth. Contextual advertising is forecast to grow worldwide by 18.5%. But we’re not going back to the future because contextual is getting much more sophisticated than before with the use of machine learning techniques, such as natural language processing techniques, used to understand context beyond a few keywords in a URL or webpage content.

It’s also growing because of its ability to offer a whole new way to look at brand safety and have a smarter approach at driving reach (vs. blanket exclusion lists). 

Likely winners in a post-cookie world. 

We see different type of winners: the most likely ones are the walled gardens. Publishers who have been smart with data acquisition, paywalls and who are working on stable identifiers will also be able to compete and win their fair share.

The losers are the ones who are standing still and not proposing solutions. I do worry, however, about more traditional publishers who are not trying to take control of their destiny.

Concerns around the possibility of fraud in the connected TV environment.

Connected TV (CTV) and over-the-top (OTT) programmatic advertising have gained exponential popularity. In 2019, these forms of content consumption reached new highs following rapid growth. Together they showed a 330% global rise with at least 50% quarter-over-quarter growth, according to Pixalate. Digital marketing measurement provider DoubleVerify outlined a surge of fraud in CTV platforms in a report detailing the state of the market in 2020. For example, DoubleVerify claims to have found 1,300 fraudulent apps in CTV since March 2019 (60% were detected in 2020 alone). It measured a 161% increase in fraudulent CTV traffic rates in Q1 2020 vs Q1 2019., which shows how careful we should be when buying in this area.

You should select the best ad verification companies specializing in connected TVs to help you control performance on CTV. We would also recommend spending time curating your own CTV inventory, so you limit the number of partners and publishers and strive for quality over quantity.