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As the industry prepares for a cookie-less 2024, there was increased scrutiny in media-buying and programmatic practices both in agencies and tech platforms. From GroupM to Google, it was eventful for the industry in 2023.
Scroll below for Campaign’s round-up of biggest media and adtech stories that dominated news headlines in 2023.
1. Media buying in China comes under scrutiny
Three members of GroupM in China were arrested on bribery charges by the Shanghai Economic Investigations Department, including two former employees, in October 2023.
Multiple sources familiar with the situation told Campaign that Yao Lan, GroupM China’s ex-head of Data Centre, chief investment officer for China, Rycan Di, and Diana Hong, ex-general manager for GroupM China were detained.
GroupM China’s CEO and country managing director, Patrick Xu, was also understood to be questioned during the raids.
They were allegedly investigated in regard to possible media broker activities—specifically in relation to how rebates are distributed to agencies and their employees. This involves the possible use of client funds that have not been disclosed to either the clients or tax authorities, according to Campaign’s sources familiar with the situation.
2. Generative AI makes an impact on programmatic advertising
Ad giants like Meta, Microsoft, Amazon, and Google are rapidly advancing their machine-learning capabilities to enhance their AI-generated programmatic advertising features.
Meta introduced new machine learning tools and an AI Sandbox for experimental generative AI advertising, and Amazon upgraded its systemwide machine learning and predictive algorithms.
Meanwhile, Google announced AI-powered ad products, including generative AI in Performance Max, enabling advertisers to develop creative assets and headlines through natural language conversations with AI. Demand-side platform The Trade Desk introduced Kokai, which incorporates distributed AI, deep learning algorithms, and advanced measurement to optimise programmatic advertising. The platform scales its AI solution, Koa, by distributing deep learning algorithms, making AI a co-pilot for advertisers. In another significant move, DoubleVerify acquired Scibids, a company that uses AI to optimise and customise marketing campaigns.
3. MFA inventory continue to thrive
Despite having existed for years, a report released by the Association of National Advertisers (ANA) in June 2023 found made-for-advertising (MFA) sites continue to make up 15% of ad spend.
MFA websites employ strategies like pop-up ads, auto-play videos, and intrusive ad placements to maximise earnings for the site owner.
The second part of the study found investment in inefficient programmatic advertising across the open web has caused marketers to leave $22bn in potential ad revenue on the table.
The study identified that through transaction costs and poor metrics, only 36 cents of every dollar that enters a demand-side platform (DSP) effectively reaches consumers. Over a third (35%) of each ad dollar spent is wasted on non-viewable and invalid traffic impressions, non-measurable for viewability, and for Advertising websites. A further 29% of each ad dollar goes towards transaction costs, primarily DSP and SSP (supply side platform) costs. This indicates a troublesome amount of wasted expenditure. With the report identifying little correlation between price and ad quality, investment in programmatic media doesn’t give advertisers the reach and viewability they’re paying for. 4. Limited transparency in the ad tech ecosystem continues
A report by Adalytics in June revealed Google misled advertisers by failing to meet promised standards when placing video ads on third-party websites.
The Adalytics report alleges that advertisers including Fortune 500 brands, the US federal government, and several small businesses may have been misled for years about Google’s TrueView skippable in-stream video – the company’s “proprietary cost-per-view, choice-based ad format that serves on YouTube, millions of apps, and across the web.”
Google responded through its partners IAS and DoubleVerify, found that the majority of impressions and placements run on YouTube’s own inventory rather than Google Video Partner (GVP) inventory. According to IAS data, 96.6% of impressions ran on YouTube-owned and operated channel (O&O) inventory, with only 3.4% running on GVP inventory.
Similarly, DoubleVerify found that GVP inventory comprised a relatively small proportion of total YouTube inventory, approximately 3.1%. DV’s data shows that GVP inventory accounted for a small percentage of total YouTube inventory during a six-month period, and viewability rates were consistent across both inventory types.
Another Adalytics report in August 2023 found Google has placed ads for hundreds of brands including major advertisers such as Kimberly-Clark, General Motors and Procter & Gamble on “made for kids” YouTube videos that may have triggered widespread tracking of children. It alleges that ‘dozens’ of major ad tech and data brokers are harvesting data from viewers, most likely children. who click on such ads. 5. Buyers and agencies still not strictly buying on curated and vetted inventory only
Google has allegedly been running search ads through several problematic websites, including hardcore pornographic, pirated content and sanctioned Iranian and Russian websites, among others.
According to a new report from transparency and advertising performance optimisation platform Adalytics, hundreds of these undesirable websites have had their inventory sold via Google’s ‘Search Partner network’, a tool which extends a brand’s search campaign’s reach beyond Google’s core search product via a network of third-party websites.
Google’s Search Partner network is a tick-box option that needs to be opted-out of should brands not wish to utilise it in their search campaigns. Unless it is a Performance Max (PMAX) campaign, brands cannot opt out from using the product.
Campaign previously uncovered how PMAX is a ‘black box’ despite promising a massive $20 billion enhancement in programmatic advertising efficiency through advanced AI-driven decision-making.
Adalytics’ report suggests this auto-opt-in format has led to many brands unknowingly signing up for the Search Partner network. The report claims to have seen advertising from government entities, Fortune 500 companies, and both US and European politicians, among other major brands, served on these problematic websites.
6. Privacy continues to be a focus
The demand for data clean rooms (DCRs) has skyrocketed due to privacy concerns and growing first-party data use by advertisers.
In the context of third-party cookie depreciation and privacy regulations, interoperable IDs and DCRs promise to reconnect data that advertisers can use for targeting, personalisation and measurement.
Fragmentation has plagued the adtech industry for a long time, and digital identity interoperability at scale is still a long way off (1% -5% in many markets) and may never be attainable.
DCRs offer a viable method for brands to keep up with their audience’s behaviour and create valuable insights, but they will only be as helpful as the IDs that power them.
Gartner predicts that by 2023, 80% of advertisers spending more than $1 billion annually on media will use data clean rooms. A study by the IAB found two-thirds (64%) of companies leveraging privacy preserving technology are using DCRs.
This increases to 85% when including those that are considering DCRs. Most companies use the technology for vital tasks including privacy protection and controls, match rates, and interoperability.
Privacy regulations have also significantly hindered measurement capabilities to the extent that Meta, Google, and Amazon are now finding it necessary to use Media Mix Modeling. Campaign explored the renewed interest in MMM and how major platforms ensure their involvement in MMM analyses.
7. Retail media networks continue to grow in APAC
According to IAB, retail media networks (RMNs) are set to grow as Southeast Asia is on track to generate US$100 billion digital revenue in 2023, an eightfold increase in less than a decade. India aims to reach US$800 billion by 2030.
In Southeast Asia, RMNs like Carousell, Grab and Foodpanda have become mainstays. Carousell recently teamed up with LiveRamp to use its Authenticated Traffic Solution (ATS), to enhance addressability with LiveRamp’s pseudonymous, people-based identifier, increasing the value of Carousell’s media inventory across all channels.
Retailers like FairPrice are also partnering with The Trade Desk to allow brands and agencies to leverage its retail data.
In India, giants like Flipkart and Amazon India are key players, offering extensive reach and sophisticated ad solutions within their online marketplaces.
8. DSPs and SSPs continue to take on each other
MediaMath’s bankruptcy threw a spotlight on supply-side platforms’ troubles. SSPs like Yahoo and TripleLift must grapple with layoffs and challenges in meeting new industry expectations, especially in the face of third-party cookie deprecation.
The proliferation of SSPs has also led to inefficiencies and duplicated bid requests. Publishers now seek smarter pipe SSPs offering superior technology and cookie deprecation adaptation.
In a direct competition with demand-side platforms (DSPs), PubMatic rolled out its supply-path optimisation (SPO) solution Activate in the APAC region. This is an algorithm used by DSPs to refine their engagement with SSP; every DSP has cultivated a unique approach to SPO. For example, certain DSPs employ it to select the bids that are exceedingly pertinent and boast the greatest probability of triumph. In contrast, some leverage it to disable SSPs that fail to execute second-price auctions, as per the information. By launching Activate, agencies can bypass traditional programmatic media buying through DSPs and go directly to PubMatic, which can potentially stir reactions from DSP partners like The Trade Desk (TTD). Fellow SSP Magnite previously launched a similar product called ClearLine.
In 2022, TTD introduced OpenPath, which allowed the platform to start buying ads directly from some of the biggest publishers, bypassing SSPs. 9. Steps taken to address carbon emissions in digital advertising
With website owners still stacking their pages with tech from thousands of vendors, the IAB Tech Lab, Ad Net Zero, and Scope3 launched the Green Supply Path Initiative in January 2023.
The initiative includes the launch of the Green Initiative working group, the industry’s first sustainability-focused working group open to all Tech Lab members globally, that will be focused on delivering a standardised framework for measuring and reducing carbon emissions from digital advertising.
The new initiative will be governed by the IAB Tech Lab in collaboration with Ad Net Zero and Scope3 with a focus on initial implementations by the end of 2023.
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