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CTV, AI & Martinis

November 4, 2020

5 Bold Predictions for a Post-IDFA World

The holidays are nearly upon us. In 2020, this means…preparing for the imminent demise of the IDFA in mobile advertising. Fun. Can this year just end already? As Apple readies to make the IDFA opt-in for iOS 14 users in Q1 – a step which many fear Google will follow with the GAID for Android – I’ve heard much speculation on the future of digital advertising in the post-IDFA world. Is this the end of audience targeting and attribution? What does this mean for ad tech? Will the industry once again resemble Mad Men, where advertising is an unmeasurable art and martinis accompany every lunch?

For those concerned about the future of digital advertising, I hope this post helps restore your optimism. For Mad Men fans, put down that martini shaker because I’m going to burst your bubble. But I’ll wait until the end.

1. 2021 Will Be Known as “The Year of CTV”

CTV advertising has grown tremendously in 2020 as the COVID pandemic greatly accelerated adoption by consumers. Advertisers have followed by increasingly shifting linear TV dollars to CTV, and this trend will continue. In 2021, we’ll also see digital video budgets shift significantly to CTV. CTV remains out of reach of cookie and IOS ecosystems and therefore is unimpacted by the changes to IDFA. With audience-targeted bidding options decreasing with fewer IDFA-enabled devices, advertisers will increasingly turn to CTV to deliver their video messaging in premium guaranteed environments.

2. Facebook Will Be Just Fine

In most years this is the opposite of a bold prediction. It’s bold in a year where Facebook CRO David Fischer talks of their economic model being “under assault.”

He doth protest too much. Yes, the Facebook Audience Network – 4% of Facebook’s ad revenue – is likely going away. However, the sunset of IDFA further differentiates Facebook’s audience targeting capabilities vs. the rest of the industry. Facebook – along with a very short list of other Big Platforms like Google & Amazon – have billions of targetable users in their apps without relying on the IDFA to identify them. Retargeting non-converting site visitors? Lookalike targeting your best customers? This type of ad targeting will get a lot harder on the mobile web. On Facebook? How much do you want to buy?

3. Premium Web Content Matters Again

(aka: We Broke It, We Fix It) – I’m sure you’ve noticed while scrolling through your social media feeds that articles “you won’t believe just happened” are readily accessible, while the factually correct and thoroughly investigated article you’re trying to read is behind yet another paywall. We did that. Collectively as the advertising industry. Now we have a chance to fix it. As non-targeted ad bidding increases, advertisers will place more value on the quality of content their ads are adjacent to. For example, advertisers will presumably be more willing to pay a premium to show their ad in the Wall Street Journal vs. Premium ad prices fund quality content, while becomes essentially worthless without the ability to match its audience to an advertiser target. If this all sounds familiar, it is how advertising worked for hundreds of years until about 2009 or so.

4. Location, Location, Location

As opportunities for audience-targeted bidding decrease, advertisers will be hungry for other targeting methods to reach their most qualified customers. Location has long been a strong indicator of intent and a probabilistic proxy for audience targeting.

In TV – first Linear, continuing with CTV – location targeting by DMA and viewing area remains a core requirement. In digital, implementing zip code or radius targeting accompanied with location-specific messaging is a recipe for success. Big Platforms and premium publishers with scalable broad reaching audiences will benefit from their ability to fulfill increased bid volume for location-targeted ads.

5. AI – The Next Ad Tech Arms Race:

As my colleague Jon Walsh eloquently wrote in this blog: “Technology’s journey has been towards reducing the need for a human mind or body.”

Technology’s rapid journey through advertising is not going to be paused or even slowed by the sunset of the IDFA. Technology will adapt and evolve as it always does. IDFAs – like cookies before them – provide advertisers with a deterministic methodology for matching ad impressions to audiences and behaviors. These deterministic methodologies require user data and are far from perfect. Their demise leaves the door wide open for probabilistic targeting – oh hello AI, come on in.

Think about the possibilities for what AI can accomplish by analyzing billions of ad impressions and user actions every day…for years on end. It’s hardly a stretch to think that within 5 years, AI-powered trading tools will be managing most of our ad targeting, delivery and attribution without the need for invasive tracking like cookies and IDFAs. So begins the next advertising arms race, as ad tech companies jostle with Big Platforms, Big Data companies and even end clients to build the best probabilistic, AI-powered ad buying capabilities. Sorry Don Draper, no time for martini lunches during an AI arms race.

It’s hardly a bold prediction to say that technology will remain a driving force in advertising well after the IDFA is gone and forgotten. Wouldn’t it be great if the changes to IDFA and rise of AI also put our industry into better alignment with the expectations of our human customers? On this point, let’s all raise our martinis.

Written by Kevin Lange, SVP at EMX