As Third-Party Data Exits Stage Left, Programmatic Advertising Presents New Opportunities For Data Collection and Monetization Partnerships
As the final days of cookies approach, many in the advertising space—including network service providers (NSPs)—are reevaluating established well-oiled campaign strategies against the new realities of the digital landscape.
This is all occurring as digital advertising on connected TV (CTV) platforms merge with conventional linear practices to create new opportunities for collecting data, applying insights and monetizing access to consumers to develop hyper-targeted campaigns.
To discuss the strategic and financial implications associated with this new era of digital advertising, we caught up with Emilia Ong, chief revenue officer for Hoppr.
Here is what she had to say:
Q: What is the status of digital advertising as cookies leave the scene? How would you characterize the opportunity specifically through the lens of the network service provider community?
Emilia Ong: Programmatic advertising has been around since the 1990s and is becoming more popular due to its ability to measure and target audience engagement. However, over the past few years, many changes and new factors have come into the ecosystem.
Throughout the pandemic, there was a surge in the popularity of connected devices which has altered how consumers engage with a wide array of content -- and advertising messages. This is especially true in the CTV space, with smart TV sales expected to expand at a compound annual growth rate (CAGR) of 20.8% from 2021 to 2028, according to analysts at Grand View Research.
From an advertising industry perspective, that data offers a monetization incentive to get CTV programmatic advertising done right, which involves better measurements and targeting.
This area will most likely continue to grow. According to Statista, global advertising spend last year totalled $772 billion. Of that, 25% was on linear TV and almost 60% was on digital. The digital share has grown yearly, mainly driven by programmatic advertising.
With this increase in attention, Pay-TV operators and NSPs are in a perfect position from a timing perspective to take this opportunity to address linear and digital areas of spending. In fact, many NSPs are investing in new ways to bring experiences to the home—or wherever consumers find themselves.
Q: How much attention is the RDK community putting on programmatic advertising as they look for new ways to generate revenue?
Ong: It varies. RDK is so customized that operators rarely have the same areas of focus. That said, operators choosing to go down the RDK path are not hindered in any way when it comes to taking advantage of programmatic advertising opportunities.
For many in the industry, it will be important to remember that technology should not dictate or limit the kind of advertising operators can deploy. This is because success in ad monetization will require operators to provide products that the market and advertisers want to buy. As a result, they will rely heavily on data collection. So regardless of any underlying technologies, the ability to collect and analyze data to drive insights will determine how well players do in this sector.
The question providers of audience inventory should be answering is why advertisers should pass up spending their money with a competitor. While it is true that the underlying technology (RDK or Android TV) will have some differences, it is far more important to solidify what NSPs and PayTV operators are bringing to market from an ad perspective—and what consumers are looking for from a purchasing perspective.
Q: How are you seeing these relationships evolve?
Ong: What is interesting is that the next wave of digital advertising is putting together parties that have not had much to do with each other until now. NSPs, in particular, come from a very different world from advertising agencies and major consumer brand managers. This is often a big part of the challenge. There is a culture gap that needs to be bridged.
The buying community and the selling community have to come together. In this case, we're talking about advertisers and brand managers who have not typically held relationships with NSPs—the content owners.
Advances made in programmatic advertising, however, are helping to level the playing field. Many brands and advertisers are defining their campaign goals and briefs and then going to programmatic platforms to find who can deliver their campaigns. If network operators come to the table with the right mix of products -- and can present it through effective user interfaces to facilitate the process -- they will find a receptive audience with the advertising community.
Q: For network service providers focusing on RDK as their primary architecture to bring video and entertainment experiences—and through that advertising experiences—to market, what key competencies must be established to monetize data sooner rather than later?
Ong: RDK implementations require a lot more customization compared to Android TV. So NSPs that pursue RDK will have to do a bit more heavy lifting. The good news is that they will be able to tailor their platforms to their exact needs for accomplishing their monetization objectives. This is where firms like Wyplay come in. They work with operators to integrate everything, including UI and ad solutions.
Hoppr and Wyplay have been working together to bring a seamless user-centric ad experience to market with a wide array of ad formats -- including display, video and interactive. This enables programmatic advertising in RDK environments.
From an NSP perspective, the key technology factor to keep in mind is to pick the technology that enables the agility that is desired or required to modify a product mix on the fly. Technology investments should not lock you into a specific way of working to address the changing landscape of digital advertising.
Q: As the cookie apocalypse approaches, so has interest around first party data that NSPs receive through the trust-based relationship established with their customers. How could this create opportunities that ensure accountability from providers—and the privacy of consumers?
Ong: One of Hoppr’s core areas of strength is our ability to use analytics. Our solution features machine learning (ML) technology that creates data and audience segments to accurately represent audience buying behaviors while maintaining a strong privacy-friendly focus. This allows us to bring a competitive product that doesn't rely on third-party cookies within an operator's user base.
PayTV operators and NSPs are in an amazing spot right now. There is a huge opportunity to plug the gap left by the demise of cookies. Many advertising campaigns currently rely heavily on cookies from a programmatic perspective. With the exit of cookies, advertising leaders now need to find a different way to get their messages to the right people at the right time on the right device. This is where I see the opportunity for operators and NSPs. They have an amazing trust-based relationship with their subscribers and the information they capture on the interests of their users is pure gold. At Hoppr, we have a strong perspective on how this can be leveraged in an effective, profitable and ethical manner regardless of technology investments that have been made by PayTV operators and NSPs.
To learn more visit: https://hoppr.com.au/