Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Tale Of Two Internets
Apple’s and Google’s user privacy rules have caused distress among advertisers and might reshape the internet itself, The New York Times reports. Audience-targeting tech (i.e., site tags and third-party cookies) helped morph many ad tech and social media platforms into giants, atop a bustling $350 billion digital ad industry. But with rules tightening for government agencies around the world, not to mention for the apps and browsers where web users all congregate, everyone but the Silicon Valley leaders are worried. “The internet is answering a question that it’s been wrestling with for decades, which is: How is the internet going to pay for itself?,” said The Trade Desk CEO Jeff Green. IBM Watson Advertising chief Sheri Bachstein, in an AdExchanger interview quoted in the Times’ story, said companies that rely entirely on ad revenue are at risk due to privacy policies. Even if a particular policy change has no effect on your business, there is a sense now that the platforms will make impactful changes with little or no heads up, and with little regard often to impacted business categories if it’s a privacy-related policy. “The big tech companies have put a clock on us,” Bachstein said.
Four years ago, Google introduced Smart Display campaigns as a checkbox to let its DSP automatically generate new prospecting audiences across millions of sites and apps in its network. This week, Google folded standard Display campaigns into Smart Display. Read the blog post. The former standard campaigns targeted specific audience types, but did not necessarily look for potential customers in unrelated demographics, based on conversion data. Advertisers will still have the same manual audience-finding options from the former standard Display campaigns, but the default setting will be Smart Campaign’s audience extension. Facebook has also collapsed different ad-buying products together since Apple ATT launched. Even platform giants need more scale to reach a statistically significant number of conversions, which are used as the seed audience to create look-alike sets. Buying channels will consolidate within these platforms to create larger audiences with more optimization and prospecting. Privacy rules mean the end of endless experimentation and easy A/B testing in ad tech.
That Gave Me Quite A Freight
The freight shipping industry will exceed $100 billion in profit this year, up from $15 billion in 2020. But what’s good for the goose is not necessarily good for the gander. Marketers must prepare for a messy and difficult Q4 this year. In the US, wildfires, hurricanes, warehouse backlogs, gas prices and labor shortages have made fulfillment a migraine. But that’s nothing compared to problems in China, where factory output is way down and rates are up 20x from 18 months ago to get freight containers out of the country. The result will be fewer clothes, consumer electronics, gifts and doo-dads manufactured for the holidays, with prices up and ad budgets down. Brands are also nervous about pumping up manufacturing now, considering the heavy costs if ecommerce sales go down as economies reopen, or if there are economic backslides and consumer spending drops. “The fear is we’re ordering all this stuff for demand, and the demand is going to fizzle out before the product gets here,” RoxAnne Thomas, logistics manager at the Gerber Plumbing manufacturing company, tells Bloomberg.
But Wait, There’s More!
Making Science acquires Sweeft Digital. [release]
Lawmakers are leaning on Facebook to nix Instagram for kids. [BI]
Virtual reality is creating huge opportunities for brands. [The Drum]
The FTC orders health apps to notify consumers about privacy breaches. [MediaPost]
Google is adding more automation to its display ads. [Social Media Today]
Jellysmack taps Sean Atkins as president. [Variety]
DDB hires Mat Bisher as chief creative officer. [Ad Age]