2018: Ad Tech Year in Review

Advertising technology and the internet are joined at the hip—so when major regulatory changes are imposed on the internet, there are profound effects on the publishing industry and the ad tech vendors they work with.

Let’s examine how the changes in internet regulation in 2018 disrupted the advertising and publishing industries:

Net Neutrality
2018 started with the repeal of net neutrality in the United States. This was a series of regulations that “prevented broadband providers from blocking certain websites or charging for content.” This limited players like Verizon, Comcast, and AT&T from showing favoritism to any one website or publisher. The result of the repeal is that telecom operators that already control the distribution are now able to control the content as well, which could impact the publishing industry tremendously.

The ongoing consequences of the repeal of net neutrality are still being examined but, in hindsight, the ad tech industry had an even larger regulatory concern—The European Union’s General Data Protection Act, or GDPR. This is the policy that “protects the data privacy rights of any individual physically based within the geographic boundary of a European Union (EU) country who happens to be accessing the internet or apps via a computer, laptop, or smartphone.”

We were informed of the impending GDPR regulation a full four years ago yet it seemed the industry was generally unprepared to handle its implementation.

Despite GDPR being seen as an “obstacle” for ad tech, we lauded the goals of GDPR and we advised publishers outside of the EU that “it would make sense to not ignore GDPR…it could be a good idea to use GDPR compliance as an opportunity to authenticate your digital ecosystem and learn where your data may be exposed.”

Just weeks before the deadline, we wrote that GDPR tasked publishers with figuring out “how to use cookies for targeting, retargeting, and measurement that doesn’t run afoul of the new rules’’…and yet still be able to “execute a path to GDPR compliance that continues to monetize EU audiences and supports advertiser demands.”

After the deadline, we commented on the “storm before the calm”, how the initial outcome of compliance seemed limited to “the ungodly number of outlets sending you an email telling you how it is reacting to GDPR.”. We wrote about how some publishers chose to simply “block readers instead of dealing with the law”, or how some put up premium paywalls without ads or tracking capabilities to get around the regulations. We also noticed a “drop between 25 and 40 percent in European ad demand volume”, noting that ‘’Ad tech vendors have already seen inventory supply slow and are predicting steep drops in demand through their platforms. European sites have also had some U.S. publishers halt all programmatic ads.”

The ad demand and inventory situation thankfully stabilized. But later in the year, we pointed out that “according to GDPR, publishers cannot block content if they don’t receive consent to use the user’s data”, and how “this is a conundrum for publishers that have “free” content. Publishers rely on this data because it is the data attracts advertisers. For the majority of publishers, this is their most important revenue stream. It allows them to auction off ad space at a premium because the inventory comes with targeting information, generally considered to be the “holy grail” for advertisers.”

In August, we discussed how GDPR “was originally built to protect users and regulate the market dominance of Google, Facebook, and Amazon. But it appears, in the early stages, the law is actually going to benefit “Big Tech” more than anyone else. They will still be able to obtain or have access to first-party data that other publishers won’t be able to touch. They are allowed to use this first-party data and the network potential that the rest of the world simply doesn’t have.’’

But on a positive note, towards the end of the year, we also raised the possibility that GDPR could lead to a resurgence in contextual ads that “don’t rely on cookie-based data collection and targeting. It simply relies on the content a publisher produces and the context it is published in.” We offered up hope that this technique will pick up steam and alleviate the losses incurred from non-acceptance for GDPR consent and iOS 11’s removal of cookie tracking. Yes, GDPR dominated our thoughts in 2018.

A Year of Drastic Change
But so much more affected our industry this year. 2018 “really tested the business models of all publishers”. So much so, we dubbed it “The Year of Drastic Change” for ad tech and digital publishing. Here are some of the other changes that made ripples in our industry:

● Ads.txt
The Interactive Advertising Bureau (IAB) launched ads.txt (authorized digital sellers) to arbitrage inventory in the open marketplace and reduce domain spoofing.

● Facebook News Feed Algorithm Change
Facebook de-prioritized posts shared by businesses and media outlets in favor of content produced by users’ friends and family.

● Better Ad Standards
The Coalition for Better Ads set new global standards for online advertising by establishing the type of ads that fall below a set threshold of consumer acceptability.

● Google’s Ad Experience Report
Google started systematically auditing sites for invasive ads. Punishment included Chrome-blocking a publisher’s ads across their domain.

● HTTPS Adoption
Google Chrome basically forced publishers to upgrade from unencrypted websites, fundamentally doxing those that didn’t adopt HTTPS, by labeling them as “non-secure’’.

● Google Speed Update
Google decided to make fast page loads a new factor in search rankings for mobile sites with slower sites sinking lower in search results.

● Google’s Stealth Algorithm Update
A “broad core” algorithm update caught many “Your Money Your Life” publishers by surprise which resulted in lost traffic and revenue.

That was a lot to digest.

If you want more, the Marfeel blog has more details on all of the points raised and we look forward to continuing to be of service to online digital publishers in the coming new year.

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