Year in Review — the News, Trends and Technology that Shaped the Digital Ad Ecosystem in 2021
This was the year that everything we knew about digital advertising was supposedly upended.
The very fuel by which business gets done — digital identifiers — is undergoing massive changes, creating ongoing uncertainty. And as the year closes, that remains true. Yet advertisers continue to pour money online, and consumers continue to shift more of their working, shopping and leisure time to the web.
How those two things connect — or don’t — is likely to be the story of 2022 as well. But for now, let’s take a look back at the defining news of 2021 in the world of data and identity.
Diet starts in two years
We all talked incessantly about the impending cookiepocolypse — but like many other events planned for 2021 — it got rescheduled. Specifically, Google announced in June that it was delaying the depreciation of cookies until 2023, causing shockwaves in the industry. Some were happy to have the extra time to prepare, while others were screaming ‘let’s rip the band-aid off already!’ There were so many ramifications — but perhaps most interesting is that Google’s move was driven by UK regulators who were concerned about the impact of the loss of cookies on the ad ecosystem. Which was ironic, given that many saw Google’s initial decision to make cookies go away was to appease regulators. The fact that the UK has led Google to make such significant changes is impressive — particularly in light of the lack of comparable action from the US — despite a barrage of lawsuits, fines and FTC charges. However…
Regulation without actual regulation
One of the noteworthy trends over this past year has been how Google and Facebook have been willing to make dramatic changes to how their golden goose businesses work (or make it look like they are) without being forced to do so by regulators. Facebook, under unrelenting scrutiny over its role in spreading misinformation and hate, pledged last August that it will eventually stop targeting people using their incredibly specific user information.
That followed Google’s ongoing initiative to shift toward employing broader groups to target ads — i.e. cohorts — all in the name of these company’s newfound love of privacy.
As part of Google’s very public embrace of a new web, the company continued to have an open dialogue with the industry and regulators over how ad tracking will work long term via its Privacy Sandbox initiative.
Over at Facebook, no single official or lawmaker had as big an impact on the company’s perception, and future behavior, as whistleblower Frances Haugen. Not only did the former Facebook executive have senators thinking more seriously about the prospects of regulating algorithms, but you can almost draw a line from her testimony to the Meta name change.
Elsewhere, as these two ad titans reflected…
There was nothing theoretical or ‘down the road’ about Apple’s decision to reign in mobile IDs and force apps to get permission from consumers to collect and share tracking information. The iPhone maker flipped the switch, and the entire app marketing ecosystem took a punch. The impact was so severe that Facebook and Snap had to provide investors with warnings. Needless to say, attribution may never be the same. Meanwhile…
UID, U UP?
One of the biggest/most hyped reactions to Google and Apple’s moves to pull back identity data was the development of dozens of cookie alternatives, including of course The Trade Desk-led UID 2.0. This past year saw much public support of the initiative, from the likes of IPG and Omnicom. But in terms of actual ad transactions (i.e. impact on the market), it’s been awfully quiet, outside of a few tests. At the same time…
Paying More for Retail (Media)
Nearly every retailer (CVS, Walgreens, Kroger) with a web presence suddenly realized they are sitting on piles of log-in data that can be used to inform advertising — and turned into found money. As the pandemic drove even more online shopping, brands hoarding first party data or looking for more of it needed somewhere else to go — and the result was a perfect ad spending storm. Retail Media surged by 47 percent this year, and shows no signs of slowing. Also on the rise….
I Want My CTV
A similar confluence of events this year (more streaming, more ad-supported options, linear declines, more data/targeting money) led to a booming, albeit crowded, connected TV market. GroupM pegs ad-supported CTV as a $16 billion market globally in 2021, and some of these dollars seem to be coming from budgets that once went toward cookie-centric media. Given this lucrative potential, naturally we are seeing lots of interest in acquisitions and partnerships in this arena. Speaking of M&A…
More Money, No Problems!
A few short years ago, Wall Street and VCs seemed to sour on ad tech. This year, despite all the change and targeting gloom and doom, this industry saw an astonishing amount of funding and dealmaking. TripleLift sold to Vista Equity Partners for $1.4 billion, VideoAmp raised $275 million, GumGum raised $75 million, Criteo bought IPONWeb for $380 million, and even Xandr finally found a buyer in Microsoft. Nobody seems very worried about cookies or identifiers here — especially in the context of The Trade Desk $40 billion plus market cap. The industry, at least in terms of capital, is firing on all cylinders.
And on that note — happy new year to all.