Is it too late to post my #IABALM takes? I’m sorry I’m such a slowpoke, but every time I started to write, I’d read commentary from the likes of Jay Friedman, Yakira Young, and Jayson Dubin that would make me reconsider my initial thoughts. And then I hit up the Amazon Web Services Publishing Symposium focused on #genAI, and that made me ruminate further.
But enough with the excuses! With events at the beginning of the year, it’s always tempting to say you can feel the sea change in the industry, the new era has arrived! While I’ve seen others declare such, I was not getting those vibes. There are definitely some silver linings appearing, but digital media and adtech is still stumbling through an extremely awkward moment.
Even Jeff Green, CEO and Founder of The Trade Desk seemed to realize that, commenting on stage, “This is the year we have to get our collective shit together.”
Schrodinger’s Digital Ad Ecosystem
One problem is the uncertainty surrounding the dominant player. While Green seems convinced that regulatory pressure will likely force Google to exit the open internet for the safety of YouTube, I watched Google’s grand AI show-off session—which highlighted development of ad creative—thinking this seems like an amazing lure for SMB advertisers to use AdSense/Google Ads/whatever it’s called now.
But as Green pointed out when questioned why Privacy Sandbox sponsored the event, Google has to keep up the “business as usual” act, lest it give off a passive admission of guilt. That leaves pubs and adtech in the unenviable spot of Schrodinger’s cat—building for a future with or without Google suffocating the open internet.
Cheers must go to the pubs and SSPs here for the curation revolution. I have been evangelizing the power of publisher first-party data segmenting for a decade at least, but I’ve always known the biggest challenge was scale. After being mocked as the dumb pipes forever, SSPs flipped the script as DSP algorithms and targeting capabilities aren’t getting the same marketing mileage they used to, and they were heavily based on cookies and viewability, two out-of-favor variables.
As the MFA menace has been vanquished—though its questionable whether advertisers learned their lesson about optimizing to vapid media metrics—inventory quality is suddenly at the forefront. Suddenly context matters!
And guess what goes along with inventory quality? Quality audiences! And who has been cleverly segmenting those audiences? Why, publishers, of course—and their smart SSP partners have figured out how to scale that data across their supply, giving advertisers the scale they’ve long been craving.
(At this point, I must add the obligatory note that what keeps high-quality audiences headed to premium publishers is optimal experiences free from malvertising, objectionable ad content, and generally bad ad experiences.)
It helps that AI is now making it so advertisers don’t have to choose between audience targeting and contextual targeting—the AI agents (algorithms are so 2024, I’ve read) optimize in real time.
Even The Trade Desk’s acquisition of Sincera is really about ensuring inventory is high-quality—TTD’s been on that track for a while, following the launch of Open Path. (Ventura I still find puzzling, but my curiosity is piqued—underestimate Jeff Green at your own peril. I understand the idea of a neutral layer for streamers on top of OEMs/OTTs, but the mechanics still seem fuzzy to me.)
This is also why the highlight of #IABALM was Andrew Casale, CEO of Index Exchange, declaring that the sell-side de-commoditization is upon us. Yes, I’m biased (Index is a TMT client), but IX’s work with Chalice AI is HUGE, and points to a brighter monetization future for the open internet…
If we could only get past the traffic squeeze.
Pub Traffic Stuck in an AI/Social Media Vise
Oh yeah, there was a lot of AI talk at ALM, and I’m thankful we’re past the “Let’s talk about the history of AI!” sessions, even though I feel a bit out of my depth sometimes like during the Meta AI download.
But AI is adding to the traffic squeeze issue—it was pretty telling at the AWS Publishing Symposium when no panelist had a good answer to the question, “As a publisher, what do you do when traffic to your sites is dropping because of chatbots and hashtag#AI overviews?” Google highlighting the popularity of Gemini’s search summaries left an uneasy feeling in my stomach. As a consumer, yes, the AI summaries are very useful when I need a quick answer. But I can’t help thinking about Ed Zitron’s warnings regarding AI feeding AI in an endless garbage loop.
And AI is only driving part of the traffic squeeze—the social media platforms are making it harder to drive traffic out, and truth be told, younger internet users prefer getting news and even shopping via social platforms. On premium pubs, Audience Development is beginning to feel a lot more like “User Acquisition,” requiring increases in paid media… To drive consumers to pages so they can be hit with ads. What a strange world.
So, yes—silver linings in the curation revolution (and may I say I’m also heartened by the awareness that there’s a lot of curation vaporware out there—people are skeptical and asking the right questions, which is progress), but overall, digital media is in an awkward spot thanks to the uncertainty around Google’s future and the big traffic squeeze.
It’s gonna be another long year—hold on to your butts.
STRAY OBSERVATIONS:
- There was not a whole lotta #retailmedia/#commercemedia content at #IABALM—but as I commented to ADOTAT not too long ago, while the space has amazing potential, the development is glacial, making it kinda dull. Or it could be that the initial excitement at seeing the space scale has worn off. I can’t help thinking the malaise is due to the never-ending debate around measurement standards (also I want commerce media to buy my creative QA automation tools 🤷).
- You should read all my coverage of the “Future of News” panel. It was pretty interesting.
- Jonah Goodhart is reimagining brand safety with Mobian: “Great content is being defunded with bad tech.” Amen.
- The 3rd-party cookie isn’t dead, but a tacky party guest that’s overstayed its welcome.
- If you don’t care about brand safety on user-generated content, why would you make a fuss about it on premium content created by editorial teams that specialize in informing and entertaining consumers? If anything, seems like paying for glorified keyword blocking might be a waste.
- Sen. Ron Wyden (D-OR) was certainly amusing on-stage (I also am too short to play pro basketball at 6’3″ with speed that rivals a snail and ball control skills often laughed off the court), but he didn’t instill me with any confidence that US federal privacy regulations will pass in the next… um… forever?
- Just me or did it seem like a lot less data plays and ID solutions at #IABALM?
- I skipped taking a ride on the boat to “Privacy Sandbox Island,” because I’m not convinced that tool will be around in a few years. (I also have the luxury of working for a company pretty detached from that… at the moment.)
- And exciting stuff happening at Peer39 — thanks to Alec Greenberg and Mario Diez for talking to me about their CTV exploits and revamped MFA engine. I hope to talk more about these guys soon… soon… 😉
