The Digital Media Industry Is In Deep Trouble

But two new trends offer a solution to privacy, ad-blocking challenges

'It was the best of times it was the worst of times'. This Charles Dickens quote describes the current state of digital advertising. On the bright side, today's digital media planner is equipped with powerful tools to reach and engage customers online - from micro-targeting possibilities on Facebook, precise search keyword targeting on Google, or accurate and real-time targeting supplied from a brand's first-party data pool. And largely because of these proven capabilities, digital advertising keeps growing. For the first time this year, digital media spending will exceed offline/traditional ad spending. Total digital ad spending in the U.S. will grow 19% (!) to $129.3 billion this year, an estimated 54.2% total U.S. ad spending according to eMarketer.

But at the same time, digital media is challenged like never before, perhaps because of the high expectations which come with the technical sophistication this media channel offers. The industry continues to beset with rampant ad fraud on the buy side, while privacy concerns and ad overload are fueling cookie disablement and the adoption of ad blocking software.

Tracking Challenges

Let's start with the crumbling 'cookie', the tracking files that digital media has relied upon for targeting (and retargeting) for years. In response to privacy concerns, major browsers are actively thwarting this tracking capability. This summer, Mozilla's Firefox began automatically blocking tracking cookies that follow people from site to site, and Google said its Chrome browser will soon allow consumers to automatically block those kinds of cookies. Apple's Safari has long blocked tracking cookies by default. This cookie crackdown means advertisers will need to lose the ability to target/retarget a significant base of customers moving forward.

Ad Blocking Takes a Bite

And consumers are taking active measures themselves. According to Statistica: 'In 2019, roughly 25.8 percent of internet users were blocking advertising on their connected devices. This figure is expected to keep growing (albeit slowly) which loosely translated means that a quarter of paid advertising messages will never reach their audiences.'

Despite these challenges, there are two interesting trends that are emerging to solve ad delivery and tracking challenges.

New Media Buying Metrics

First, new standards of media buying are appearing that will somewhat circumvent the ad tracking challenges. Consider Parsec, a new programmatic media-buying platform that is transforming how digital media is bought and sold. Rather than relying on 'impressions' as the buy metric for much of digital advertising, with the highly-questionable 'opportunity to see' a display ad, Parsec enables advertisers to pay for media on a “cost-per-second” basis. According to MediaPost, 'the platform uses a proprietary method to identify digital audience impressions with the greatest propensity for attention, factoring things like viewability, duration of exposure and adjacent clutter surrounding them, and then lets advertisers or agencies bid for them programmatically.' In the coming years, expect the industry to move away from impressions and adopt more verifiable metrics around audiences that demonstrate actual attentiveness.

AI To The Rescue

Second, Google has introduced new technology, based on artificial intelligence, to deliver targeted advertising without third-party cookies. Google is generating predictive models based on traffic patterns where a third-party cookie is available and analyzes them at an aggregated level across Google Ad Manager. When there are no third-party cookies present, Google says, the new tool can optimize where and when those ads serve up to site visitors. Rather than relying on cookie data - rapidly disappearing - Google can now manage the frequency that an ad is served to a specific individual without compromising their privacy.

AI is predicted to transform digital marketing in a number of ways, but expect large brands to deploy new algorithms to solve the cookie data gap.

Expect these two trends - new ad-buying methods and AI-driven media models - to proliferate across the digital media industry.

What other trends and solutions do you see? Feel free to leave a comment below.