Truth: Current programmatic advertising technologies don’t work for television. Premium video was never going to be a format that someone could buy in a traditional demand-side platform (DSP) and current trends have simply accelerated this realization.
Legacy programmatic won't support a data-driven future
Walled gardens restrict how data and identity leave and enter their environments. The latest example of data restriction was Amazon’s announcement that it is instituting new barriers to viewer data on its connected TV apps, which includes obfuscating the IP addresses of viewers. This follows moves by Apple to restrict the use of IP addresses, as well as cookies and device IDs, and of course, moves by Google to phase out third-party cookies in Chrome by the end of 2023.
Looked at in totality, all of this means we need to get ready for a world without third-party identity or proxies for identity (i.e., IP addresses) in programmatic.
In this potentially future ID-less world, first-party data will be king. For TV publishers and distributors, this isn’t a bad thing: Both know their audiences well. But to stay competitive, the TV industry needs scale. This requires data connections and technology allowing media companies, distributors and advertisers to compete in a way that protects both consumer privacy and the value of first-party data. And that’s one place where I think current programmatic buy-side platforms are getting it wrong.
As cookies crumble, identity fragments the industry
The onslaught of regulations and OS and browser privacy enhancements create new challenges that will fundamentally change ad tech’s relationship with consumer data. In addition, viewers have more choice than ever in where and how they view content. Said another way, if you’re creepy with consumer data, they will leave. That’s why almost every player in the complex media ecosystem is rushing to find a solution to carrying on in a “third-party ID-less future.” Which approach will prevail? It is not clear, but trends are emerging.
The ad tech landscape has splintered into numerous camps based on their philosophies toward data and targeting. Each of these approaches has pros and cons. Ultimately, all third-party IDs will likely fade away, inclusive of the “universal” ones in which some companies are investing.
On the other hand, a cohort-based, aggregated targeting solution aligns well with the objectives of many TV advertisers who use the medium for top-of-the-funnel marketing. It becomes clunky, however, when compared to capabilities afforded by more granular targeting approaches and makes the use of first-party data assets less precise. Another option—clean rooms—helped alleviate some of the privacy concerns of data brokers and advertisers looking to use data sets for insights. But for data owners looking to allow advertisers or publishers to use their data, this approach results in the loss of control as the data needs to leave these environments for activation.
A glimpse into the future
Unfortunately, things are going to get messier before they get easier. It is going to take some time before the industry identifies a set of standards or common approach to identity resolution, data sharing and data usage rights. Therefore, buyers and sellers will need to navigate in a fragmented world where interoperability across solutions will likely not exist across many of advertisers’ core media channels.
The path forward for TV, then, must ensure that any solution to power inventory activation strategies is scalable, is done in a safe manner that accounts for applicable privacy requirements, and brings value on both sides of the transaction: return on ad spend for buyers and optimized yield for sellers. Here are the underlying principles that a new TV advertising technology should embrace:
Privacy at the core
As mentioned already, first-party data will have a prominent role in the industry, and advertisers will move out of pseudonymized third-party IDs and toward first-party data approaches that fuel their advertising strategies. As a result, the technology powering this must include relevant privacy protections.
Controls for data owners
Future technology should support strategies to share data and insights across data owners; to activate audience targeting across properties, supporting ad exposure/frequency; and to power attribution, measurement and learnings. However, data owners will retain control over who uses their data, and for what purposes, and what granularity is provided in reporting.
This means that for a given ad request, the owner of that request would be able to use either the data they have or have been granted access to, to resolve identity in a deterministic fashion, match it against audience segments from demand partners, but (crucially) do so without needing to send their identifiers outside of the data owner’s defined perimeters of trust.
Federated peer-to-peer approach
While it is still early, sophisticated data owners will eventually move toward a federated model where persistent identifiers never leave the physical network or control of the data owner. This could be facilitated using application program interfaces whereby consumer data is obfuscated before it is made available to downstream decisioning systems. The premise is to enable DSPs and other buy-side entities to onboard their audience segments to a supply-side tech platform, where they would be matched to media sellers’ identity platforms for advanced planning and execution, without exposing any persistent identifiers in either bid streams or in reporting, while still being available for attribution and measurement partners to query and execute models against.
Despite its evolution, TV is not, nor will it ever become, a replica of digital media. To echo the times, it’s a more powerful variant. With its premium content, high-impact messaging and immersive, big-screen environment, TV is unique. Add data, and it’s arguably unmatched.
TV publishers and distributors have strong brands and high-quality, first-party data. So do advertisers. Currently, however, both lack the solutions to help them use this data at scale, in a way that allows them to retain full control of their valuable assets.
This must change. The future of TV depends on it.