The Coming Advertising Tsunami of 2018, Pt. 1
Are B2B publishers about to get slammed by internet forces beyond our control? If you follow the breadcrumbs of recent news reports and announcements, it looks like there is a tsunami coming that will affect everyone’s online advertising sales.
The underlying story is well documented: Online advertising fraud is rampant to the tune of $6-7 billion per year. Ad blockers threaten publishers’ ability to deliver ads, though ad block usage seems to have leveled off at 26% of desktop users. Some estimates put that about ten points lower for B2B, about 15%. Mobile ad blocking continues to grow apace with 94% of mobile ad blocking occurring in the Asia Pacific region. If that trend ever moves to North America it could be devastating to an ad-dependent industry. Debates and disputes about ad viewability have become a major issue. How much of each ad is seen and for how long?
Added to this massive uncertainty is the dominance of the Facebook-Google “Duopoly.” You have probably read the statistic that these two big data monopolies earn nearly 100% of all new advertising revenue. It’s not that other sellers, hopefully you, cannot increase your ad sales. It is just that statistically they are vacuuming up so much ad money you might as well be standing still. All these issues are precursors to profound industry developments.
Coming in 2018
- Procter & Gamble, the biggest advertiser in the world, is threatening to withhold most or all of its $2.4 billion annual spend in 2018 until the industry polices waste better. Other giant advertisers who share P&G’s position include Unilever, Johnson & Johnson, and Bank of America.
- Google announced that Chrome, the dominant web browser with 60% of mobile and desktop internet delivery, will begin ad “filtering.” This will prevent display of “ads from appearing on websites that are deemed to provide a bad advertising experience for users,” according to the Wall Street Journal.
- In May the European Commission is instituting a law known as General Data Protection Regulation (GDPR). The law requires “unambiguous” consent before a brand uses a consumer’s data. The goal is to protect Europeans from advertisers using their personal data in unknown and unlimited ways. Violations can incur fines of €20 million.
- This month, Apple began limiting advertising data tracking on its updated Safari 11 web browser, called Intelligent Tracking Prevention (ITP). According to The Verge, this “imposes a strict 24-hour time limit on those tracking tools’ lifespans,” effectively eliminating the ability of advertisers to take advantage of retargeting ads based on lengthy Safari viewing histories.
- A Universal ID for ad tracking may be unveiled. Michael Stoeckel reported that MediaMath, Acxiom/LiveRamp “and a few other prominent, non-Google/non-Facebook, ad technology players . . . (announced) their intention to create of a ‘Coalition for Open IDs.’” They are looking at the possibility of a Universal ID to follow someone’s identity across all devices. This is essentially about marshalling their not-inconsiderable resources to compete with the Duopoly.
- Amazon is coming. The company that wants to own everything will start to use their data to sell ad targeting. They are bragging that they know more than FB or Google about you and me. I doubt that will affect B2B directly; but remember they enter every market by lowering prices even if they take a loss, so this is no rising tide.
Moment of Truth?
This month Ad Week described the current online advertising environment as facing its “ultimate moment of truth.” Marc Pritchard, chief brand officer of P&G, said the industry must come up with “the next generation of digital ads,” as quoted by Ad Age.
Who will be affected first? As usual our branded consumer media brethren take it on the chin. If P&G pulls billions of dollars of ads, chances are you weren’t seeing any of that anyway. The behemoths battling for data supremacy are focused on selling consumer goods. However, you can be sure Google, Facebook, and Amazon have deep troves of data on business readers’ purchases, which they won’t be shy about using against you.
B2B publishers have it easier with our wider diversity of content and advertising products, and a shrinking reliance on traffic-driven banner ads. Whereas exchange-based programmatic advertising places almost all ads on the internet by sheer numbers, it is still looked at as remainder-filler by B2B. (I consider websites such as BI and Forbes, which do rely on the exchanges, as general business media.) Also minimizing the pain is the fact only a minority of B2B online publications sell by CPM. When you fill your site with ads placed by the month, you are on a different playing field.
Big data is the enemy of branded media, of course, because the big data purveyors promote that topic-targeted websites are irrelevant to reaching buyers. So the entry of Universal ID and Amazon, added to the Google/Facebook Duopoly, is unwelcome news. The slice of your largest advertisers’ ad budget pie that they spend directly with you, i.e. outside of that spent on the programmatic exchanges, will almost certainly be reduced.
The Apple announcement will lessen the data tracking that works against publishers, but Safari only has about 15% of the browser market. And it will be balanced by the fact you also will have diminished ability to collect data there.
Part 2 will focus on actions you can take to anticipate the ad changes that will affect you. I will also reveal the first agency-driven requirements affecting a B2B publisher. Such advertising programs are probably coming your way soon, too.
Andy Kowl is a journalist and entrepreneurial publisher with more than 30 years developing, marketing andgrowing publishing companies. He is senior vice president of publishing strategy for ePublishing Inc., the leading enterprise publishing system (EPS) provider which manages content, audience data, workflow, newsletters and e-commerce for more than 600 B2B publications. He helps publishers increasereader engagement and response by integrating behavioral data with contextual content, and shows them direct ways to monetize the results. Andy’s background in B2B includes publishing, editing and/or owning magazines and informationproducts covering specialty retail, horse breeding, real estate, credit unions, Wall Street compliance and wireless technology. He organized dozens of publishers to form the 'B2B Audience Network,' now part of ePublishing, to fill excess ad inventory.