Is ad spending on the open web about to collapse?

“what used to work doesn’t work anymore"

Is advertising on the open web on the verge of an implosion?

I’ve asked the question in the past about whether ad spending on, you know, the millions of sites and apps that make up what we think of as the internet, will remain viable long term. And so far, the Cookie-pockolypse has seemed overblown, as evidence by headlines like this Digital ad spending outlook blows past previous forecasts (eMarketer, Jan 2022)

However, for all of the attention we place on cookies and ad tech funding and Google’s Floc/Topics initiative - the open web accounts for what, at most 20 but maybe closer to 10% of all digital ad spending? According to Ebiquity, outside of Google, Facebook and Amazon, digital advertising is growing at 3%. That’s ok if we’re talking GDP, but not great in a market that is supposedly exploding.

It’s fair to say that, good old fashioned display ads are not exactly where the heat is. Besides the big three, dollars are shifting toward retail media, and CTV, not so much banners on Accuweather.com (no offense to Accuweather.com).

Ok, so what else is new Mike? Why are you bringing this up?

Well, if you read this dire Digiday post, a massive shakeout is upon us. “the outlook for advertising in large swathes of the open web isn’t particularly promising.”

The premise of the piece is that because of all the identity changes, the web will split in two - between those sites and apps that have first party identity data and those that don’t. Those that don’t will lose- badly.

To be sure, I’ve read and written numerous ‘here comes the shakeout’ and ‘flight to quality’ posts over the years. So I’ll believe it when it I see it. I’ve been waiting for a slew of ad tech companies to shut down and ad-supported websites to simply just go out of business following such shakeout talk - yet here we are.

BUT. If you look at the the money going into retail media and Amazon in particularly, the flight to ‘companies that have email lists’ sure feels right. Which is why you’re seeing somewhat insane and desperate-sounding moves such as what Adobe is up to.

Brands and publishers use Adobe’s CDP (customer data platform) to store all kinds of data, including consumers email addresses.

Adobe’s new plan, according to AdExcahnger, is “to sync emails stored in the Adobe CDP product with The Trade Desk, which converts the emails into Unified ID 2.0 (UID2) IDs that can be traded programmatically”

Wait, what??

Call me crazy, but I have a hard time believing that when customers were sharing their email addresses with Adobe’s brand partners, they checked a box that said “sure, put my name up in your CDP, and then share it with The Trade Desk so they can trade on it. As long as you encrypt it I’m cool with that.”

Have we learned anything? Tech companies talk about the new privacy-first cookie-less era, and then the first thing they do is try to load up on and share as many consumers’ email addresses as possible? Is Lina Kahn over at the FTC excited about these cross platform synergies?

Meanwhile, do we think marketers even want this? Another recent AdExchanger piece really struck me over this past week. In an interview, Abhi Juneja, VP of performance marketing and ad tech data science at Amex, sure made it sounds as though the credit card company - as data-driven a direct marketer as they come -had totally moved on.

“What used to work doesn’t work anymore,” he said.

So rather than try and create a new cookie replacement, Amex is going back to using Marketing Mix Modeling (which has been around for decades) and kinda/sorta giving up on digital ad attribution.

Without access to tracking data tied to some form of addressable media, multi-touch attribution “becomes an impossible task, and you have to start making assumptions,” he said.

Most brands would rather not make assumptions. so instead, Amex is looking at things on a more macro level, which means putting money into less ‘one to one’ trackable media like digital audio. Notably, in the post Juneja never once mentioned UID 2.0 or other cookie replacement initiative.

So what the hell is the open web supposed to do? Well, maybe publishers have more data that we give them credit for? That’s part of the theory behind TripleLift’s acquisition of 1plusX - that email addresses will always be scarce, yet publishers have more first party data than they get credit for.

“You can make a lot of really powerful and highly accurate predictions based off of user behavior in an entirely private way that bring a lot of the relevancy that third-party cookies brought, without any of the reliance or privacy issues associated with third-party cookies,” Chief Strategy Officer Ari Lewine told the Wall Street Journal.

Lewine is a really smart guy, so I’d be he’s onto something. But it’s hard not to hear the description of this product and think it sounds like behavioral or contextual targeting products from two decades ago (as in Yahoo showing sporting goods ads to people that visit sports sites).

This new data usage better be compelling, otherwise you have to wonder if brands will even bother trying.

“We think that we’re moving into what we call a privacy-centric era for digital advertising, where all advertising will have privacy as a major consideration in a way that hasn’t been previously,” Lewine said.

Sounds good. Somebody tell Adobe.