Advertisers are on an ‘inevitable path’ toward quality, thanks to commerce data

The programmatic industry has always leaned toward a “more is more” mentality, and rightfully so. It was, after all, built to support the dizzying array of growth to meet the demand for digital. This, however, resulted in more impressions, more platforms, more optimization, more content, more speed and more opportunities to monetize all the eyeballs. But sooner or later, “more” reaches a point of diminishing returns. And as it turns out, the tide is already shifting to bring advertisers back down to Earth.

Research firm Adalytics, for instance, released a report on March 11 that said brands are still showing up in droves on made-for-advertising websites, or MFAs, which feature low-quality content and the maximum number of ads that can possibly fit on a screen. Adalytics’ findings come on the heels of another report, one released by the Association of National Advertisers, which said that brands are placing too much emphasis on the cost of advertising value, finding that 23% of the $88 billion spent on programmatic advertising on the open web went to waste in 2023. That’s $20 billion that vanished, forever gone into the programmatic ether. 

MFA websites may appear to be a good deal given their favorable viewability metrics and low, low prices, but in reality, drive zero business outcomes.

Yet the industry, upbeat as always with its can-do attitude, isn’t letting a few billion dollars deter it from improving. Quite the contrary: read the tea leaves and you will see it is on an inevitable path toward quality, and not quantity. Ad spend waste, the inevitable death of third-party cookies, the rise of retail media networks (RMNs) and the increasing use of commerce data will serve as the catalysts for this movement. 

Taking off 

RMNs are already making inroads, delivering ads to the big screen at home with shoppable ads, or with blockbuster partnerships like Walmart’s recent acquisition of Vizio, which made the headlines. But perhaps more importantly, RMNs offer valuable first-party signals, or commerce data, which is helping brands solve for areas like closed-loop measurement. Commerce data is also being democratized, allowing brands to get a full view of which retailers consumers are visiting, what they’re buying and perhaps how their behavior was influenced. When coupled with connected TV, RMNs suddenly offer advertisers more premium options to spread their media dollars, enough to make the concept of walled gardens a distant memory.

"Read the tea leaves and you will see [the ad industry] is on an inevitable path toward quality, not quantity."

The emergence of RMNs also couldn’t have come at a better time: Google will (finally) make good on its promise to render “third-party cookies obsolete.” The owner of the world’s largest browser by market share began purging cookies in January for 1% of Chrome users, impacting some 30 million people; by September, this figure will increase to 100%. 

The search giant’s move will initially hit the long tail of the open web, as it is completely threatened by cookie deprecation. These sites, which have historically faced challenges in justifying why anyone should spend on them in the first place, will further encourage advertisers to make the flight toward premium publishers that prioritize content and user experience in exchange for meaningful ROI.

You can find more indicators by looking at the political arena: consumer privacy regulation is no longer only an industry issue, but a legislative one that has garnered support from both sides of the aisle. This, in turn, is pushing brands toward adopting new media strategies that are anchored by the use of high-fidelity data for both their targeting and measurement. It could also mean the billions of inaccurate data points fueled by third-party cookies will seemingly disappear overnight; a recent Truthset report, for instance, found that only 51% of targeting data from major data brokers was accurate.

More recently, Jeff Green, founder and CEO of The Trade Desk, introduced a new product dubbed “Sellers and Publishers 500+.” This new offering allows brands to focus their media spend on audiences across channels that are represented by premium publishers, which include Disney+, The Wall Street Journal, ABC and Spotify.

Given Green’s reputation for accurately predicting future industry trends, the Sellers and Publishers 500+ is likely a precursor to a much broader shift that advertisers will soon see play out: one where brands make the flight toward quality — and not quantity. 

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