ExchangeWire founder Ciaran O’Kane is feeling bullish. His company provides news and analysis on media, marketing and commerce, with a specific focus on data and technology.
It also holds events. In the past 12 months it held conferences in London, Singapore, Madrid and Tokyo. All were packed out.
“There’s a huge change going on in the industry and a thirst for knowledge,” O’Kane tells Inside Marketing, the industry podcast hosted by Dentsu Ireland’s chief strategy officer Dave Winterlich.
“People want to be ahead of the curve. They don’t just want to take Google or Amazon’s word for it, they want to know what’s going on in their space.”
What’s going on right now is a massive adjustment to the loss of third-party cookies. It is transforming the landscape in programmatic advertising, the use of software to buy digital advertising.
Long heralded, the demise of third-party cookies has finally arrived – and not a minute too soon, suggests Winterlich, pointing out that their misuse too often resulted in poor user experience and invasion of privacy.
“A lot of the industry over-indexed on Chrome and now the carpet has been pulled out from underneath them,” says O’Kane.
“Google has decided it wants to do the privacy thing, which I think is the correct thing to do, but the industry is slightly ill-prepared for what’s coming next. There is going to be a scramble to get into a Privacy Sandbox but to be brutally honest nobody knows anything about them.”
A Google initiative to reduce cross-site and cross-app tracking, while keeping online content and services free, Privacy Sandbox APIs (application programme interfaces) reorient browsers, allowing them to act on the user’s behalf – on their device – to protect their identifying information. “The reality is, nobody knows how it’s going to work,” says O’Kane.
Given that ad tech powers the global advertising industry, that’s a challenge.
All change
“What we are going to see this year is a complete sea change,” he says, likening it to Hemmingway’s characterisation of bankruptcy. “It’s like privacy comes slowly, and then very quickly, and before you know what’s going on its ‘oh shit, I don’t have a strategy’. So the industry needs to find new ways – and they will,” he says.
It will certainly force planners to up their game. “Planning became quite lazy in the sense that they didn’t have to worry about context, which was mental to a degree,” says Winterlich.
In future, more emphasis will be placed on ‘attention’, the emergent frontier featuring start-ups such as Lumen Research, an ‘attention economy’ technology company.
O’Kane is a partner in First Party Capital, an ad-tech venture fund that has invested in Lumen. It’s one of the new breed of firms working to connect attention to outcomes, thereby offering a “post-privacy signal that media buyers can lean into,” says O’Kane.
“It’s a move away from your traditional Google-esque metrics such as click-through rates and all the rest of it, and more towards engagement, particularly in mid to upper funnel stuff. I think that’s a good outcome for the industry, something that’s not seen as an encroachment on your personal privacy.”
“It improves not just performance but also the user experience and it makes creative important again. It’s not that it wasn’t important before, but we kind of ignored creative for maybe 15 years,” says O’Kane.
Private marketplaces are also a feature of the new landscape. These are invitation-only exchanges that allow premium publishers to make their inventory and audience available. The next 12 months will also see a rise in curation, ad tech that brings PMPs together to build specific campaigns for agencies.
That’s good news all round. “With curation there will be a flight to quality, to top-tier publishers,” says O’Kane.
It also addresses the sustainability issues around programmatic advertising – the fact that algorithms dragging advertisers to low-quality listicles were a significant cause of carbon emissions.
As companies look more closely at Scope 3 emissions throughout their value chain, the need to build bespoke campaigns activated across trusted media will grow. Already “money is moving from the open marketplace to curation,” he says.
What will be less impactful to the industry, despite the hype, is artificial intelligence, he reckons. The lion’s share of its value will be captured by big tech companies such as Microsoft, Google, Meta and Amazon, he says, “because basically it just enables their products to run better”.
Chipmakers and cloud companies stand to gain too. “For the rest of us it will be more of an enabler than transformational. You will use it just like you use Microsoft Word or Google Sheets, a day-to-day thing that improves efficiencies,” he says.
Evolution not revolution
“AI is computational power to be able to do things. It won’t have any creative thinking. It’s derivative,” he says.
“What is most interesting around this is that planners, who have been almost kind of overlooked for a decade, will regain more power within the agency. Their planning capabilities will be more important than ever.”
AI will assist them, freeing them to focus on strategy. “That is what agencies need to lean into. A lot of agencies over-indexed on the programmatic side, but I think there is going to be a renaissance in the planner buyer solution,” says O’Kane.
He is upbeat too about retail media, as long as no one thinks they can “out-Amazon, Amazon”, a fool’s errand. “When it comes to first-party data, it is second to none in terms of sales. They’re a machine,” says O’Kane.
“Retail media works for Amazon at scale. What you have in the rest of the pot is a bunch of retailers like Tescos and Sainsbury’s, Carrefour in France and a few others that are running effectively walled gardens. They are looking at trade budgets and the advertising that consumer-packaged goods spend and saying, ‘Okay, how can we get them to spend more money on our digital channels?’.” But as yet, few have the scale to pursue it.
In the meantime, one thing O’Kane has no appetite for is negativity.
“I’m sick of it. I am done with it. I just cannot talk about the death of this, and the death of that. It’s not death, its evolution. Nothing dies right? It just evolves. That’s ad tech,” he says.
He’s also done with whinging about the overweening power of giants such as Meta, Google and Amazon.
“In 2025 the advertising industry will be worth €1 trillion. That’s an insane amount of money. Maybe Meta and Google and Amazon will take half of that, but that still leaves €500 billion, again, a crazy amount of money,” he says.
“Ad tech powers a lot of that infrastructure for advertising, and everything is going digital anyway. So I don’t understand why people keep talking about the death of this and that. It’s failure porn,” he says.
“Ad tech doesn’t really change. It’s just that every so often there’s a massive collapse and then it rebuilds itself. Likewise, right now privacy is a huge opportunity to rebuild the entire ecosystem. I don’t think there has ever been a more exciting time to work in the industry.”