While 2023’s return to fiscal responsibility made for rough waters, it will pale in comparison to 2024.
Google Chrome will deprecate third-party cookies, Privacy Sandbox will dominate the conversation, and media will continue having a major crisis, as years of removing friction between consumer and content has cratered the value chain.
Despite 2023’s turmoil, there’s positive economic momentum heading into 2024. Inflation is slowing, supply chains are cranking, and unemployment is historically low. Sure, marketers are still noncommittal about budgets, but there’s a major election and an Olympics ahead to help goose YOY comparisons.
However, publishers will need more than a few hot ad verticals to turn their fortunes around. Add in inevitable showdowns between DSPs, monopolies and governments, and it’s clear 2024 won’t be a breeze. Here are eight trends worth watching:
1. The traffic jam
Publishers are reeling from two years of cuts to referral traffic. The tenuous publisher-platform symbiosis is on life support as AI uncouples search from sources and the newsfeed shrivels into a wasteland. Cookie collapse, harsh regulation and the growing ad tech tax will burden publishers further.
Publishers will focus on distribution amidst traffic woes, and the content pendulum will swing toward long-form coverage where perspective and depth create distinction.
And though vertical publishing continues to be vulnerable to AI, original or creative categories like comedy are poised for a resurgence.
As ad tech complexity skyrockets and profitability shrinks, so does margin of error for publishers. It will be possible to do more with less in 2024, but you need solid ad tech and reporting foundations before you can draw insights and make optimizations.
2. DCaaS: Deal curation as a service
To navigate the open market jungle, you need trusted sherpas. Curation is coming back after years of publishers bearing great costs for custom solutions and expensive sales teams, only to be met with buyer apathy.
In 2024, publishers will become more comfortable with “curation houses.” But beware of hucksters who are just reselling programmatic. Good curation houses should have direct buyer relationships, sellers in the market and a clearly articulated value proposition.
3. Bedlam of bid enrichment
Once a service only offered within DSPs and SSPs, bid enrichment is moving onto publisher pages. Publishers are calling bid enrichment vendors to “look up” the user and return any associated IDs. Those IDs are typically placed into the publisherprovidedID array in local storage, where the SSP can grab them to enrich the bid request.
However, there are two major issues on the horizon: bid washing and fee structure.
DSPs cannot differentiate the source of an ID and must rely on OpenRTB objects. The enrichment vendor is likely using a probabilistic match to return what could be a deterministic identifier. There’s no harm if these IDs remain in OpenRTB’s extended ID (EID) array, where buyers expect publisher-provided IDs. But moving them into the userID or buyer.userID arrays is a big no-no.
Publishers need to be wary of misrepresentation and ID laundering. But the jury is out on whether this actually has any negative effect on campaign integrity.
Plus, bid enrichment deal mechanics need an overhaul. Often structured as “lift deals,” a publisher will pay a rev-share to the vendor on all enriched requests. But no one knows if the enrichment actually sold the impression, and the vendor is incentivized to enrich as many requests as possible.
Some publishers employ several vendors to enhance coverage. Does a publisher pay each of them 5%? Not a chance. Instead, enrichment vendors should extract their value from the buy side or the owners of each ID.
4. Addressability parable: CTV edition
Addressability, automation and chasing inventory liquidity are great for growth and opening markets. But DSPs are built for disintermediation that will commoditize you into oblivion.
The boom in ad-supported streaming content (thanks in part to subscription fatigue) is causing a glut of undifferentiated supply. So inventory owners are moving more toward addressable auctions and opening more demand paths.
But ad tech will crowd your supply chain, and smarter DSPs will force you to adjust floor prices down. As other services move to fully programmatic, buyers will challenge the need to reserve your inventory. More streamers will start new programmatic sales divisions.
Take a lesson from the digital web: Reducing friction by going to the open auction may save costs and bring in easy money, but it erodes CPMs and disintermediates you from buyers.
5. Tending to attention
Attention as a value metric is no better than its predecessors, and it only compounds the measurement problem by combining metrics that aren’t fully baked.
Attention is a complicated black box that heavily favors buyers (fine) and blinds publishers (boo). Even if the industry could coalesce around some threshold of attention (like with viewability), it will fumble how it is applied.
Pre-impression filters will drive up prices and reduce availability of worthwhile inventory. Post-impression filters will create “wasted” impressions and cut publisher payouts. Signal loss will exacerbate attribution problems, and correlations of performance and attention will be incomplete at best.
If you’re not concerned yet, wait until your team asks for $100K per year to license an attention vendor.
6. PAAPI’s Trojan Horse: Adsense
As Chrome deprecates cookies, the Protected Audiences API (PAAPI) is supposed to handle privacy-safe retargeting for systems using Chrome’s APIs. Google brands like Adwords and DV360 will support these APIs, allowing millions of customers to continue pumping DV360 full of remarketing dollars.
Presumably, publishers must adopt PAAPI auctions to get these campaigns. Client-side multi-bidder auction value will immediately plummet, and non-Google SSPs will shrink down to their “unique demand” size.
With PAAPI now entrenched in publisher websites, other DSPs will follow adoption to avoid losing clients, and DV360 will continue transacting directly with publishers. This will be fine for many DSPs, but the largest ones bristle at such an outcome.
7. Standalone DMPs
2024 will be the most challenging year yet for standalone DMPs, as the reality of monetizing their own data continues to elude publishers. DMPs need to be more realistic about the publisher’s opportunity.
Many adjacent vendors now offer DMP-esque services for an incremental fraction of the cost. Further, curation houses and the ubiquity of contextual solutions are kneecapping the standalone proposition.
However, the impending cookie collapse could upend the buy side’s bring-your-own-data workflow and put the publisher DMP back on center stage.
8. Whomp whomp, LoMP
The ANA Programmatic Media Supply Chain Transparency Study features this graph showing the full “cost waterfall” of transaction costs and loss of media productivity (LoMP) caused by nonviewable, IVT, nonmeasurable and MFA inventory.
This chart is not just a demonstration of costs, but also the opening of a new product marketing flank. DSPs and SSPs are relatively fixed in their transaction cost frameworks, so expect them to harp on reducing LoMP with new features (that they’ll probably charge for).
DSPs won’t be able to weed out inefficiency alone, and many partners will not agree on their methods (such as how to avoid MFA ). But, hopefully, these efforts accelerate the flight to quality and a strengthening of seller relationships.
The silver lining
Despite all this, or perhaps because of it, 2024 could still be a great year.
Sure, we’re in for lots of change and uncertainty. But if you get lost this year, focus on strengthening your relationship with the consumer.
Now let’s go crush 2024. See you in the spreadsheets!
“The Sell Sider” is a column written by the sell side of the digital media community.
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