When you turn ten, you look ahead: The Improve Digital Lab #TheNext10 Industry Predictions
With Improve Digital’s 10-year anniversary, rather than looking back, we’d like to look forward. In preparation for our main Improve Digital Summit, 28 and 29 March, we brought together our clients, key industry experts and thought leaders, in Europe for a roundtable: The Improve Digital Lab #TheNext10. During the afternoon, all chipped in at what they believe are the opportunities and challenges for the programmatic advertising industry the coming 10 years, according to several hot topics.
GDPR: it takes three to tango
Kicking off with the elephant in the room, Marc Roos, COO at Improve Digital, lead a short GDPR workshop. Will GDPR be the end of data use, cookies, and programmatic trading as we know it? “The question of will you be compliant on time is one we get asked a lot, but that isn’t the question to ask. The most important aspect is to focus on collaboration. When it comes to GDPR: it takes three to tango. The DSP’s, the SSP’s and the advertisers all have to work together, sharing their policies on data to make this work successfully.”
While collaboration is key, concerns are the main driver of the discussion. With so much ambiguity surrounding the regulations, it seems to not be eaten, you must be only faster than the others when the lion is chasing you. “It doesn’t take a lot, to cause a lot of problems.” Bert-Jan ten Kate, CEO of Massarius shared. “The more you wait, the more will be clear, and the regulations are easiest to implement.”
While often big companies such as Google and Facebook are scolded, it’s important to learn from their challenges Roos points out, especially regarding GDPR. Since an important factor of GDPR is user consent, and these companies are platforms heavily reliable on consumers, the Facebook’s and Google’s of the world are a good example to look at how they will communicate to their users about the GDPR changes with storytelling and UX.
Through collaboration, we can learn from each other, and align on what data we ask permission on. This way, we streamline the process of consent and data need. What can we do realistically? Map your responsibilities, and take them, working together with your partners in the programmatic value chain to align this responsibility. GDPR can be an opportunity, but it will be tricky.
Bullshit bingo: header bidding, business models and First Price Auction Bidding
While GDPR has people asking whether it will end the programmatic industry as we know it, header bidding has the programmatic rethinking its trading methods, as well as the classic divide between demand side and supply side.
“The definition of the Supply Side Platform is changing. They are not solely technology platforms anymore.” Sebastiaan Moesman, CEO at Improve Digital, claims. Elmostapha Bel Jebbar, Product Director at Sublime Skinz, adds: “With the programmatic advertising industry consolidating, all big SSP’s will be connected to the same demand. This will eventually evolve in four or five big players remaining. I predict, that in five to ten years, the SSP business model as we know it, doesn’t exist anymore.” Bastiaan Spaans, SVP of Commercial at Improve Digital comments: “Your needs, whether that be infrastructure or demand, shape your business model, and hence the development of your place in the programmatic advertising industry.”
Then onto First Price Auction Bidding. While advantages such as paying a true price for inventory are named, the critical question of whether FPAB is effective is also asked. It’s argued that First Price Auction will not result in a revenue increase at this moment, unless it is combined with Second Price Bidding in the header. However, First Price Auction Bidding also is the first step to the simplification the programmatic industry needs. The industry needs to be taught how to use the first price bidding principle instead of continuing second price strategies, it needs to be educated. “First Price Auction Bidding can help move revenue into programmatic advertising where it hasn’t been before,” Moesman argues. “It’s not about the cheapest impressions, but about the quality of these impressions.”
Does it all boil down to transparency?
Technologies and trading methods move fast in the programmatic advertising industry. They give us the potential to improve, to simplify and to grow. But, as Sjoerd van Meijden, Director Sales and Business Development for Mannenmedia, points out: “Before we do anything regarding future technology, such as AI and voice, we need to be transparent as an industry.”
And for this, the roundtable argues, reporting needs to be cleaned up. How can we let brands know their KPI’s are met, and what they’ve spent exactly, if we cannot get this out of the big black reporting box? The programmatic advertising industry keeps getting surprised by its own vendors, and is held back to grow to the potential it has.
Discussing the next ten years for an industry that celebrates its tenth birthday is tricky. With such fast moving technology, it’s essential to “re-evaluate your strategy every two years and be prepared to be flexible,” Bert-Jan ten Kate points out. Only then does this give you the agility to move with the fluxes of the programmatic advertising industry. The Improve Digital Lab #TheNext10 has fired up a lot of the discussions, that are to be continued during the Improve Digital Summit in Venice. Want to read more insights? Have a look at industry predictions of Andrew Buckman, MD EMEA of Sublime Skinz or at the summary videos of the event.