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Online advertising: the cards are being reshuffled

The online advertising industry is in a state of upheaval, but even experts do not know exactly which direction the development is taking. At d3con, the German trade fair for programmatic advertising, it became clear that the market and the resulting data streams are likely to become even more confusing than they are today.

The adtech industry can currently not complain about acute financial concerns, as Daniel Knapp, Chief Economist of the advertising organization IAB Europe, explained. Despite the Corona crisis in 2020, the digital advertising market in Europe grew by 6.3 percent to 69.4 billion euros. According to the count, digital advertising now makes up 56.5 percent of the advertising pie.

But this cake is being shared among more and more industries. Instead of advertising in the media, many advertisers are now starting to put their budgets directly into trading platforms such as Amazon. According to estimates by IAB Europe, this business will increase from sales of 7.6 billion euros to 24.8 billion euros by 2025.

There are also more and more advertising spaces that are used programmatically – which today essentially means that advertising is delivered according to the users’ individualized interest profiles. The conversion of audio advertising, especially by Spotify, is showing the first results: The turnover for the targeted advertising increased from 30 to 65 million euros. With the targeted billions in sales by the streaming provider, this is of course only a first step.

While video advertising is no longer achieving great growth rates, there is much hope in SmartTVs, the advertising of which poured 12 billion euros into the coffers around the world. This value is expected to triple by 2025. Sales drivers for many forms of advertising include new companies that have invested billions on the stock exchanges but have so far only been unable to generate sufficient sales. These are currently expanding large marketing budgets.

While many participants at the conference were relieved that Google had not implemented the schedule to remove third-party cookies. But the pressure to say goodbye to the established cookie-based structures is coming from many quarters. For example, Knapp drew attention to the prohibition of so-called surveillance advertising discussed in the course of the Digital Service Act, which could have enormous effects on the industry. Although there are many reasons against such a ban, the legitimate criticisms can no longer be ignored. The industry must show that privacy and personalized advertising are not antagonisms.

But at the moment this is not really the case. In several panel discussions, participants complained that the needs of the users are absolutely subordinate to the interests of exploitation. For example, Thomas Bindl from the European Society for Data Protection suggested that the cookie banners should no longer appear reflexively on every website. Instead, in the interests of data minimization, operators should limit themselves to only obtaining consent to data processing when a customer relationship has actually been established – not with every first click from Google.

However, the development is currently heading in a different direction. The Washington Post recently reportedthat Apple’s tracking blocks are now largely thwarted by techniques such as browser fingerprinting.

Many advertising service providers concentrate on preserving the current business model as far as possible by integrating as many different identity solutions as possible. At the same time, the publishers are always trying to enrich their user data. At the same time, new alliances are constantly emerging in order to be able to exchange targeting data between individual companies.

Robert Blanck from Axel Springer National Media complained about a blind spot among advertising customers. They are often no longer willing to pay for advertising if the clicks cannot be fully evaluated in their targeting tools. “These are users who are still relevant,” emphasized the publishing house marketer. Therefore, the media are forced to diversify their business in order not to be dependent on the advertising channel, which ignores a large part of the audience.

The result is a restructuring of the media groups, which now want to create a counterweight to the US digital companies. On the one hand, Gruner + Jahr and RTL are working on a joint, integrated media group that will combine both moving content and magazines in one offer. On the other hand, Axel Springer is trying to expand to more and more areas of the value chain, something through the start of “BILD TV”.

The strategy of consolidation serves several goals at the same time. On the one hand, the integrated offers should be more attractive for paying subscribers. Bernd Hellermann, who helped organize the transformation of Gruner + Jahr, brought up a possible cross-publisher “Germany subscription” in the discussion.

At the same time, an overarching media platform can make advertisers an offer that does not match that of Facebook or Google in terms of quantity, but is at least no longer inferior in principle.

If customers spend enough time on the platforms, the operators can use the first-party data to create marketable interest profiles without comparing them with the social media groups or advertising networks. Second, users who register on such a platform can also be directly addressed again, which drives up advertising prices. Thirdly, the sheer size of such offers helps to monetize users who do not want to participate in the advertising data business. There are various options for this: Hellermann brought up direct marketing, for example, in which a media group enters into a partnership with a furniture manufacturer and markets products directly via its own platform.

For small media companies, as before, only modular solutions remain. The company ContentPass presented its offer at the D3Con, where readers could read content with a range of offers free of advertising and tracking for a low monthly price. With 65 rather unknown offers, the platform is still a long way from a “Germany subscription”.


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