How ad tech will continue to innovate amid growing challenges

By Adform

The digital advertising forecast for 2023 has a few givens but is largely packed with uncertainties due to industry-wide transformation.

Economic evaluations for the year ahead are putting pressure on budgets during a time when the digital advertising industry is navigating new regulations and technologies that affect its bottom lines. And, as always, trust is increasingly critical for ad tech to prove its value to both advertisers and publishers. As players in the space push for more innovation and transparency from vendors, consolidation is also impacting the sector.

In this new Q&A, Dr. Jochen Schlosser, Chief Technology Officer at Adform, spoke with the Custom in-house agency at Digiday Media about how ad tech will respond to questions around privacy, identity, sustainability and transparency in 2023.

How will the expected general economic downturn affect the sector? Is there an argument that ad tech will innovate out of the adversity?

Jochen Schlosser: With this economic crisis, we see budgets going down at the same time that inflation is rising. Advertisers are much more cost-conscious, and the focus is on ROI — tracking, measurement and actual proof of the impact of their investments. So the money that usually goes into innovation is less available now than in previous years. When economic forces shift back, we will see a massive push toward innovation again because the window for new identity solutions is getting shorter.

However, some companies, the highly profitable companies, have an opportunity to innovate and stay ahead of the curve right now with the aim to grow market share while others are slowing down.

How will sustainability affect innovation in ad tech?

Jochen Schlosser: In advertising, sustainability has been sneaking into the governance discussion for a few years already. There are some vital questions that CMOs need to answer. How can I control where I spend my money? How can I ensure that it goes toward a publisher that is considered “good” in terms of transparency, ethics and sustainability?

More companies are looking into sustainability and want to choose a vendor with a record of trust with sustainability or even offering opportunities to optimize spend toward sustainable publishers. Are they using green energy? How do they source their partners? Carbon neutrality and ethical standards of companies are becoming business-critical for brands.

Most ad tech companies that I speak with have sustainability policies in place already. As an industry, we connect billions of dollars of demand with trillions of opportunities to show ads on publisher properties. If either side starts to ask for more sustainable transactions, ad tech and programmatic is the way it happens. We will be innovating around products to trade using sustainability as a criterion, as advertisers will need simple solutions to activate and run sustainable ads.

Is the ‘death of the cookie’ still an issue, or are marketers finding alternative solutions?

Jochen Schlosser: Cookies will die — we know that for sure — but the timing is still a bit unclear. As long as people don’t have trust in this “end date,” it will continue to be …read more

Source:: Digiday