The Rise of SPO Will Force SSPs to Incorporate More Services to Stay Relevant
MarTech Series: What will happen to header bidding? What is the future of SSPs?
Charmagne: In 2019, header-bidding created bid density and therefore higher prices. And that, coupled with the shift to first-price auctions, has left buyers feeling like they’re paying too much for inventory via SSPs. Publishers, however, believe that SSPs have increasingly catered to DSPs to ensure the demand (allowing optimizations that have resulted in bid-shading), which has created downward pricing pressure on all. This, plus the need to reduce the number of middlemen (which triggered safety and tech fee concerns) has led to the rise of SPO.
Now, smaller SSPs will get squeezed out and need to find other ways to stay relevant and provide value beyond yield management – possibly even serving as the data hub for buyers.
Read More: Five AdTech Trends to Watch in 2020
Swing Back to Context
MarTech Series: Can we still trust third-party data?
Charmagne: The reduction of third-party cookies has further diminished the accuracy of third-party data, which has been a core use-case for media campaigns that aren’t long tail. Coupled with concerns around high-tech tolls, transparency, fraud issues and brand safety concerns, media budgets are shifting to more secure executions where buyers can work directly with the premium publishers who own the hearts and minds of their audiences.
Premium publishers curate trusted audiences that are meaningful for advertisers, especially when they want to purchase programmatic inventory in a safe, well-lit and relevant environment.
Shift Toward More Premium Programmatic Executions
MarTech Series: Which ad tech trends are pushing the demand for Premium Programmatic Advertising inventory?
Charmagne: Faced with pressure from clients demanding more transparency and better inventory, agencies are moving more deals out of the open auction and into the premium and direct buy types of PMPs and PG. This shift allows them to apply the programmatic fees, while also allowing for safe, efficient and transparent programmatic media buying. Of course, this doesn’t mean that open exchanges are going away. Rather, we’re seeing segmentation in the way that advertisers do their buying.
Open exchanges are going back into the rightful position of monetizing lower value, remnant and long-tail inventory. Meanwhile, upper-funnel activity is moving back to more premium executions and strategies now that the technology has caught up with the market.
First-Party Data Will Be King
MarTech Series: With the CCPA coming into force from Jan 1′ 2020, would it be safe to say that first-party data is more reliable to manage premium programmatic advertising inventory?
Charmagne: Given current concerns, first-party data will become more important to programmatic buyers, for several reasons.
First, marketers are increasingly concerned about consumer privacy as regulations like GDPR and CCPA install stringent rules over what can and cannot be collected without consumer consent. This also ties into the demand for transparency from marketers, who want to know that the data they’re using isn’t just privacy-compliant, but of high quality.
Last year, a Lotame study confirmed this, finding that data accuracy is the most important factor among brands when considering audience data.
Second, browsers like Google, Apple and Mozilla are cracking down on third-party cookies, creating new barriers to data collection and consumer targeting. As a result, first-party data, which isn’t always as scaled but which offers quality and visibility into its origin, will be critical for use in programmatic and automated-buying environments.
Zero-Party Data Has Arrived
MarTech Series: What data privacy-related impact do you foresee in your industry?
Charmagne: With more power shifting to consumers and ever-growing concerns about privacy, marketers are creating opportunities across the ecosystem by turning their attention not just to first-party data, but zero-party data. Whereas first-party data is “passively” collected consumer data from websites, apps, social platforms, etc., zero-party data is proactively and willingly shared by the consumer.
Examples include purchase desires and preferences through interactive experiences like subscriptions, surveys and loyalty programs, etc. It’s completely opt-in, so we can, therefore, presume a high level of quality, transparency, and accuracy.
And, as regulators and browser companies continue to tighten up on privacy, zero-party data will be more important for programmatic and automated buys. It has the potential to unlock deeper consumer profiling and targeting. Per Forrester, zero-party data would help marketers “build direct relationships with consumers and improve their product recommendations, services and offers.”
The challenge, however, for zero-party data is actually getting it. The bar is awfully high to entice consumers to proactively participate in a survey, loyalty program, contest, or subscription service. This means that zero-party data, while rich in quality, will always be difficult to scale. It’s also why first-party data will remain the go-to option for advertisers, with zero-party data supplementing it.
Thank you, Charmagne, for chatting with us!
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