The Roaring Twenties Take Two

Wall Street loves ad tech (for now) and the talent crunch continues, while UID hits a snag and Shopify looms as the next big ad player.

It’s a complicated ad world we live in. Let’s break it down.

Ad Tech Parties Like It’s Always Going to be 2021

These are heady days for ad tech, as each week seems to bring a new acquisition, funding round, or IPO announcement (the latest being Samba TV).

Digiday did a nice job capturing the current frothiness, while asking the obvious question — how can this last, given all of our cookiepocolypse hand-wringing?

“According to an index from investment bank LUMA Partners, there are now 23 publicly-listed ad tech companies with much of them disclosing their quarterly earnings in recent weeks.

However, as stocks list on the New York Stock Exchange and Nasdaq, there are also mounting public concerns around privacy that lurk beneath the surface.

Major platform providers Apple and Google are turning off the data hose that helped ad tech prosper in its nascent days as a response to laws such as the General Data Protection Regulations and the California Consumer Privacy Act.”

Math Capital’s Eric Franchi summed up the contradiction in a recent tweet thread — everyone’s business fundamentals are supposedly threatened, yet everyone’s hiring:

The talent crunch in ad tech is insane. #1 issue for companies of every size. Via LinkedIn: The Trade Desk: 548 job openings IAS: 180 job openings Pubmatic: 152 job openings Criteo: 326 job openings Applovin: 758 job openings Roku: 711 job openings Liveramp: 320 job openings

What’s at play? The way Franchi sees it:

  • Digital and eCommerce are exploding, so everyone’s doing well regardless of changes (S4 CEO Sir Martin Sorrell predicted that digital advertising will grow right alongside GDP next year, per Adweek)
  • Cookie alternatives are working
  • Google’s cookie delay has made everyone put off their hard decisions
  • Retail media and transactional media (laid out nicely here in Troy Young’s People vs. Algorithms Substack)

Or maybe it’s a bit of everything. However, speaking of cookie alternatives…

Identity Crisis

Unified 2.0, The Trade Desk-backed ad identity initiative, may have a big problem. As of now, it doesn’t work in Europe, reported AdExchanger.

The details are complicated here, but essentially, for UID 2.0 to work under the EU’s General Data Protection Act, it needs a third party to act as data administrator. You may recall that when GDPR was introduced, the law attempted to make it clear which parties involved in an ad transaction would be responsible for customer data. Typically brands and publishers were considered “data controllers” and ad tech/martech companies were considered “data processors.”

This is relatively doable on a small scale, but it appears no one is keen to sign up as the data processor for a global data initiative involving hundreds of partners — because that processor would technically be responsible for violations, fines and the like.

So right now, even testing of UID 2.0 is grounded in Europe, which is not going to inspire confidence in what now looks to be a precarious consortium.

Shop on

Who stands poised to win regardless of whether cookies, UID 2.0, or any other industry-wide identifiers go away? Anybody with loads of first-party data of course, such as Facebook, Google, and…Shopify?

Given the explosion of retail media, it’s no surprise that the company that has a window into shopping customers and behavior across the web would try and cash that intent-rich check. And while Shopify is being quiet about any such move, retail experts told Business Insider that it feels inevitable.

“Given the amount of data Shopify has internally and the pullback of the attribution coming from social platforms, it makes perfect sense for Shopify to launch their own ad platform,” said Troy Osinoff, cofounder of the agency Juice, which helps launch companies as well as grow brands with paid and organic marketing. “Shopify is perfectly positioned for this play.”

Yes but… one has to wonder whether regulators will view Shopify as the ultimate second party, not a company that has gathered any sort of consent from consumers, most of whom don’t know what Shopify is.

Of course, when have ad tech companies ever shown voluntary restraint when an easy new revenue stream is on the table?

Anyway, Happy Thanksgiving, and enjoy the boom times while you can. And keep buying stuff (it should be here by Christmas of 2022). We’ll see you next time.


November 12, 2021

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