The Covid-19 virus delayed or cancelled many plans for 2020. But looking back at pre-pandemic predictions for adtech, the industry has largely stayed the course.
At the dawn of 2020, six programmatic experts predicted the major themes they believed would heavily influence the adtech industry in the coming year. With many of the predictions overlapping, the 11 themes that emerged were as follows:
- Increased data-privacy regulation
- Identity resolution
- Growth of contextual targeting
- Supply-chain transparency
- Growth of in-app
- Growth of OTT/CTV
- Increasing addressability of video supply
- Video header bidding
- Consolidation, inhousing and agency restructuring
- New measurement approaches
- Greater power for big tech
Several of the predictions were interlinked: data-privacy regulation requires consent-management frameworks that render tracking and targeting tools such as third-party cookies noncompliant and ineffective. The depreciation of the cookie would in turn lead to a rise in contextual targeting and collaborative identity solutions, and place greater power with the walled gardens and their treasure troves of data. Elsewhere, the growing demand for supply-chain transparency would lead to consolidation of adtech partners, and the continuing growth of mobile adoption in Asia-Pacific would boost both in-app and OTT video supply. The demand for more addressable solutions would rise, as would the need for cross-platform measurement, requiring agencies to restructure to facilitate the convergence of TV and digital. Such were the predictions for 2020.
These predictions were made before a global pandemic swept through the world from the end of January, causing widespread business disruption throughout the year. But while Covid-19 scuppered many plans for 2020, it appears to have accelerated adtech's predicted evolution.
Naturally, the biggest bump occured within OTT advertising. As countries across the world were plunged into lockdowns, the public had little else to do but turn to TV.
Juliette Stead, SVP of JAPAC at Magnite, explained: "Social distancing actually propelled the growth of CTV and OTT (also known in some markets as BVOD), increasing the speed at which consumers have adopted digital TV viewing."
A December report by The Trade Desk and Kantar found that 57% of Southeast Asia’s OTT viewers reported streaming more content since the pandemic began, making OTT one of the fastest-growing media channels in the region.
OTT viewership in APAC now rivals traditional TV and social-video platforms in terms of time spent, according to SpotX research, which found that 367 million adults watch OTT in the top five SEA markets—which is more than the population of the United States. For markets like Australia, Indonesia and Philippines, OTT takes the top spot among TV viewing platforms.
India has a particularly high population of TV streamers, according to Emarketer, which found that 94.1% of the internet population in India had used a video streaming service in H1 2020. There are more than 32 online content and video-streaming platforms in India alone, according to a report by Boston Consulting Group.
PubMatic chief revenue officer of Asia, Jason Barnes, had predicted the rise of OTT in last year's feature. He said that as streaming services proliferated in 2020, with an estimated 1.4 billion viewers globally subscribing to OTT services worldwide, the industry saw buyers adapt and evolve their TV and video-buying strategies.
"OTT streaming video has increasingly become a critical part of building brand awareness with new audiences and driving performance with target consumers. And for good reason—OTT provides a TV like experience for viewers, with all the high-impact brand storytelling power of the television screen and the targeting, analytics and interactivity of digital media for advertisers," he noted.
Niraj Nagpal, director of business development APAC at Iponweb, said BidSwitch saw a 60% year-on-year increase in video and OTT inventory and adspend in Q3 2020, growth which was predicted "but not quite at that pace".
Integral Ad Science SVP of Asia, Laura Quigley, said that despite OTT's growth in 2020, several major advertising challenges remain: "Currently, the majority of OTT/CTV inventory is available through direct or private marketplace buys. Given neither cookies nor click-thrus are viable for this type of inventory, I believe the easiest way for fraudsters to profit is by misrepresenting desktop or mobile inventory as OTT/CTV and charging higher CPMs. Until there is an easy fix to this industry-wide issue, a conservative approach to buying OTT/CTV programmatically on open exchanges should be advised. Buyers should work with their publishers and DSPs/SSPs to ensure that proper verification codes and additional data signals are supported, as outlined in the latest versions of the IAB VAST spec. These are teething challenges and largely fixable with upcoming advancements in 2021."
Privacy, cookies and collaboration
It's important to note that Campaign's 2020 adtech predictions feature was published just hours before Google Chrome announced it would phase out third-party tracking cookies within its browser by 2022. All six of the adtech experts quoted in the piece predicted privacy and its implications on contextual targeting and identity would form a major theme of 2020—they perhaps could not have predicted quite how significant the privacy shifts would be. Apple's announcement in August that it would introduce an IDFA consent framework for iOS 14 caused immediate panic in the ad industry over its potential to significantly impact targeting.
Nagpal said the need to reduce reliance on the third-party cookies was high on most prediction lists for 2020, but Google’s announcement in early January "pushed that agenda item higher" for most publishers, brands, agencies and adtech providers.
"As such, we saw much more focused attention and industry collaboration in 2020 finally being placed on finding a cookie replacement(s), with several solutions being pushed out for early consideration and trial," he said.
PubMatic's Barnes echoed that in the face of these challenges the industry has come together to test and learn: "The industry has been trialling new ID solutions that have consumer privacy baked in. And there has been a recognition of the value of the first party data that publishers sit on—putting them firmly back in the driving seat. The industry is busy building a better open web—one that levels the playing field with the walled gardens and delivers a better experience for consumers, advertisers and publishers."
But IAS's Quigley said practical implementation of ID solutions is to be seen: "When Google announced its plans to rest the third-party cookies in its popular Chrome browser by 2022, the industry went into a frenzy looking for a privacy-safe alternative. We’ve seen progress made in 2020 in exploring unique identifiers to replace cookies and it’s rollout and practical implementation is to be seen."
Several new partners joined the The Trade Desk's Unified ID 2.0 solution in 2020, including Criteo and LiveRamp.
In-app advertising, measurement, M&A
Other predictions that came true included the growth of in-app advertising and investment in measurement solutions.
Barnes said that whilst the pandemic caused a global slowdown in adspend, PubMatic data showed mobile bounced back quickly, particularly in APAC.
"Our Q2 Quarterly Mobile Index found that Q2 mobile spend soared 71% over the prior year, with the Asia-Pacific region notching huge gains over the last quarter due to a faster recovery. We also saw publishers embracing programmatic tactics to enhance their revenue. Header bidding and private marketplaces (PMPs) for mobile saw significant growth in Q2. In-app PMP adspend was up nearly five times. And mobile video came roaring back. At the start of the Covid-19 pandemic, mobile video was hit hard. But in Q2, mobile video adspend made a comeback, rising 116% over pre-pandemic levels," he said.
Samantha Pearlson, GM of client service Southeast Asia at The Trade Desk, predicted that 2020 would bring more precision to adtech. She commented: "The pandemic has led to budget constraints, which means marketers faced growing pressure to justify marketing spend and to measure it against the real-world sales impact of their campaigns. Meanwhile, we’re seeing an explosion of new players providing O2O measurement services here in Asia, such as digital natives Gojek and Zalora, who are joining the established data providers such as Lifesight."
One trend that was not predicted for 2020 was the adtech's increased M&A activity, noted Iponweb's Nagpal: "Last year saw big institutional investments in companies like WhiteOps and LiftOff, acquisitions of companies like 4C by MediaOcean and Beeswax by Freewheel, and even an IPO from PubMatic. All of this activity indicates increased demand for solutions in fast-growing areas like cross-channel measurement, fraud detection, mobile, and CTV."