2022 - The Great Fragmentation (of Ads)
Welcome back to My Two Cents on Programmatic. I hope you were able to have a good break over the holiday season.
In this edition of Two Cents, I share some thoughts on aggressive fragmentation in ads and what that means for advertisers, as well as listing out some of the latest AdTech moves.
2022 - The Great Fragmentation of Ads
Above illustration is to show how many devices, media titles, environments and formats a single user could be served advertising against, it is clearly not exhaustive.
Fragmentation - the process or state of breaking or being broken into small or separate parts.
We hear the word fragmentation used a lot in advertising, primarily from the middle layers which are upselling tech or services that reduce it. These middle layers (& those that fund/invest in them) have a lot of incentive to encourage fragmentation, as it, in theory, increases their value to the eyes of the budget holders. I.e., an agency may want to manage as many buying platforms as possible because a client would have difficulty in contracting and managing them all, themselves. AdTech solutions may want fragmentation so that they can differentiate through unique inventory/data for targeting and measurement, making them an essential access point.
Programmatic was supposed to reduce this fragmentation. Consolidate all inventory and data access via one open platform, optimise accordingly. For a variety of reasons, some more woolly than others, fragmentation is reappearing at pace. A single open-DSP plus a Google & Facebook account won’t achieve all of an advertisers digital advertising goals, sadly.
The biggest challenge from this increased fragmentation is measurement. A single cookie-based ad-server won’t be able to measure everything like it used to. A more thoughtful, probabilistic, and triangulated view on media measurement is now required over the much beloved ‘last click’. Advertisers who don’t adapt to this, are firmly putting the cart before the horse and will fall behind in maintaining/gaining audiences.
I’m bullish on solutions that are independent of media for cross-screen de-duplicated measurement. OpenAP, WFA Virtual ID, ISBA Project Origin, Nielsen and many others are working towards this. Whether the biggest publishers are incentivised to opt in is another story, but all non-Google/Facebook ships could rise in the tide if they do opt-in (otherwise non-endemic brands could de-prioritise the mid-long tail entirely out of convenience). In the meantime, data clean rooms, first party IDs, some alternative ID’s and panel-based measurement can get a large advertiser some of the way to figuring out the impact of their digital ads.
We’ll see a lot of industry conversation around solving for fragmentation in the coming year and I know I’ll be continually asking myself; ‘will the industry return to the democratised media and data opportunity?’. I’m hopeful (web 3.0 anyone?) but realistic. One thing is for sure, advertisers can’t risk waiting an indefinite amount of time to find out.
Recent AdTech moves
Smartly.io have acquired Ad-Lib.io to bulk out their creative management capabilities into more channels - https://finance.yahoo.com/news/smartly-io-acquires-ad-lib-140000635.html
Magnite acquire Nth Party to enable privacy compliant data sharing - https://www.magnite.com/press/magnite-strengthens-audience-data-capabilities-with-addition-of-nth-party-team/
Human raises $100m for growth - https://www.humansecurity.com/newsroom/human-raises-100-million-in-growth-funding-round-led-by-westcap-and-nightdragon
Criteo acquire IPONWEB to help bolster their retail media proposition - https://www.criteo.com/news/press-releases/2021/12/criteo-enters-into-exclusive-negotiations-to-acquire-iponweb/
That’s it for the first Two Cents of 2022. Please feel free to share using the button below.
Wishing you all the best for 2022,