Media Trends For 2022: Consolidation, Commerce And First-Party Data

Comic: Two years ...

Mergers and acquisitions, the industry’s slow-motion pivot away from third-party data and the expansion of commerce-based business dominated the headlines for media and sell-side ad tech in 2021.

What does the industry predict for 2022? More of the same as these trends continue to play out in the year ahead.

First-party first

In 2022 and beyond, platforms with dedicated opted-in audiences will be well positioned to monetize their first-party data sets. And publishers who have been slow to pivot to first-party data will scramble to meet Google’s latest deadline for discontinuing third-party cookies in Chrome at the end of 2023.

“Those who advertise in cookieless environments early can reap the competitive advantage of access to new audiences, more inventory and more scaled advertising results,” said Konrad Feldman, co-founder and CEO of Quantcast.

The same holds true for publishers, who can use their first-party data sets to create ads with more dynamic messaging for different subsections of their audience.

Ziff Davis uses its first-party customer data for modeling to ensure it’s reaching the right customers and pairing them with the right ads, said Kim Oscarson, director of email marketing for Ziff Media Group. “Prospects are seeing ads with prospect messaging, existing customers are seeing ads with language that speaks to them and lapsed customers are seeing language that tries to win them back.”

But with the deprecation of third-party data still about two years away, third-party-data-based business will continue as usual until the rug is pulled out from under them.

“As long as there is a product you can sell at a price that makes sense, and people want to buy it, then go ahead,” said Carl Leskinen, CEO of Burt Intelligence. “It’s business as usual until the lights go out.”

Content worth signing up for

Gaining first-party data should be easier for publishers. Consumers are opting into multiple subscription-based services, making the opportunity ripe for first-party data gathering, Leskinen said. “Anyone who’s not thinking about how they could create a subscription business out of their products should probably start,” he said.

On-demand formats like podcasts and CTV are ascendent for a reason. Publishers must meet changing audience demands, like spinning up a podcast or video content, to ensure they’re offering the best product possible.

“We’ve all shifted our behaviors over the last 18 months to not be in such a scheduled environment,” said Kevin Hartbarger, investment partnership lead, DTC, for Publicis Health Media, making it important for traditional media platforms to find opportunity in video or audio on-demand content.

The continuing influence of ecommerce

Ecommerce’s influence is so strong that it will become harder to distinguish between publishers and retailers in the coming years.

“More traditional publishers are trying to implement the ecommerce way of tracking user behavior,” said DanAds CTO Johan Liljelund. “When we look two years ahead, what type of publishers will we have? Companies like Walmart that have the most customer data will want to capture more of the supply chain, and they will take over a lot of the advertising industry.”

Marketers are also borrowing from media companies. “The line between the buy side and the sell side has been blurring for years,” Burt Intelligence’s Leskinen said. “It’s going to be hard to distinguish a marketer from a publisher. Both of them have Instagram accounts that they create content for. Best Buy is running Samsung ads on their webpage. Every company is becoming a media company.”

Consolidation and IPOs

High-profile mergers and acquisitions shook up the digital media sphere in 2021.

A few examples include Dotdash’s $2.7 billion purchase of Meredith’s National Media Group, Axel Springer buying Politico for $1 billion, BuzzFeed’s acquisition of Complex before going public, Group Nine and Vox Media coming together, and Future plc adding Mozo, Marie Claire US and Dennis Publishing to its portfolio.

Comic: Oh what fun

Will the consolidation trend continue into 2022? All signs point to yes. Several digital media giants, including Forbes, Vox Media and Reddit, are targeting IPOs for the near future. Acquisitions present an appealing option for boosting the valuation of a company ahead of a public offering. Consolidation also tends to create more profitable publishing platforms that have money to invest in improving their content and the ad-buying experience.

“This [consolidation] will contribute to fixing a structural issue, which has been ignored the last decade or so: Quality digital advertising cannot exist without quality media environments,” said audience and monetization consultant Alessandro De Zanche. Quality media environments prioritize “top-quality content and user experience, which require media owners to be self-sustainable in order to afford the investment,” he added.

Acquisitions ahead

As publishers seek to maximize profitability, they may put pressure on the middlemen in the advertising supply chain or consider buying or building their own bespoke solution. Publishers with the means could develop their own in-house ad-serving technology or acquire outside ad tech companies.

Building up in-house tech stacks allows publishers to monetize user data without relying on outside service providers to link KPIs with specific user IDs via third-party cookies. That way of doing things will soon be obsolete, anyway.

“The desire to remove middlemen and the advertising ecosystem tax is at the forefront of creating efficiencies,” said Acxiom CEO Chad Engelgau, with the caveat that it must be done in a privacy-compliant way.

The Washington Post’s Zeus Technology has proven successful, with adoption across a wider network of publishers.

However, publishers historically have had more success developing their own tailor-made, in-house technology rather than acquiring outside companies.

For example, after AT&T acquired Xandr in 2016, its content arm, WarnerMedia, never closely linked with Xandr, and Xandr was ultimately sold to Microsoft. News Corp sold Unruly after dipping its toes in ad tech, and Meredith sold off Time Inc.’s ad tech ambitions along with Viant. The businesses survived – just not wedded to a content business.

However, when media brands team up together, they can address more audience niches and reach a scale that makes advertisers take note.

“A strong future for media brands lies in two scenarios,” De Zanche said. One is having huge reach in a given country. The other requirement for success, according to De Zanche, is strong execution: “consistency of standards, formats, practices, data, processes, and ease of doing business.”

Here’s to bigger, better, bottom-line-focused media companies in 2022.

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