State of Affairs
The Gartner 2021 Magic Quadrant for Ad Tech captures the advertising technology industry at a crossroads. For roughly two decades, digital advertising has grown in scale and sophistication, becoming reliant on personal data for effective targeting and personalization. Now, growing consumer demands for privacy—and the actions undertaken by firms and governments to respond— have prompted a change in that trajectory.
The strength of all vendors across the Ability to Execute dimension illustrates the industry’s present state. Demand-side platforms continue to differentiate through product functionality, supported channels and formats, inventory, and other variables. But all of the vendors in this study are mature, full-featured ad buying platforms.
The Completeness of Vision dimension shows a wider range of performance, reflecting ad tech’s untrodden path into a cookieless, privacy-oriented future. Leaders Google and Amazon provide direct access to behavioral signals and conversion endpoints, offering cookieless solutions that are partially insured by the scale of their on-platform audiences. The Trade Desk, though lacking these advantages, has led the creation and advocacy of an interoperable open source identity framework in UID 2.0 that allows users to set ad targeting preferences, tied to a hashed email address. Other leading constituents such as Adobe are taking the middle road by supporting a myriad of different identifiers, while relying on extensive data integrations, predictive modeling and expertise to stitch together proprietary contextual targeting solutions.
Prioritize Privacy and Safety
The extent to which these solutions will transform today’s advertising ecosystem remains to be seen, but the trend is clear: greater organizational lift for—at best—equivalent outcomes. As privacy regulations evolve and third-party cookies start to sunset, marketers will have reduced abilities to track ad exposure and conversion across devices, therefore impacting measurement and attribution. The solutions proposed to address these problems, such as first-party audience building and probabilistic conversion modeling, are complex and lack universal standards. Therefore, digital advertising will likely become more time- and resource-intensive, or regress to a less addressable state. With ad effectiveness unlikely to improve in the near team, some organizations may ask whether the added effort is worthwhile.
As advertising technology moves to an increasingly privacy-centered environment, marketers must adopt an aggressive approach to data privacy and brand safety. Google’s postponement of third-party cookies deprecation in Chrome to late 2023 has provided the industry and marketing leaders with additional time to test and evaluate alternative solutions. Marketers must also avoid approaching issues myopically, as shifts in regulation can impact a particular channel or platform, forcing marketers to revise media plans and outcomes. In the last year alone, multinational firms advertising to consumers in China now have to abide by China’s newly enacted Personal Information Protection Law. Meanwhile, Apple’s roll out of its App Tracking Transparency Framework, designed to restrict on IDFA tracking has already dramatically reduced marketers’ ability to target on social platforms like Facebook and Snapchat, illustrating consumer demand for privacy is indeed top-of-mind. California voters also passed the California Privacy Rights Act, an expansion of 2018’s California Consumer Privacy Act, inspired by Europe’s 2016 General Data Protection Regulation. Marketers must commit to data privacy and avoid technologies and partners that replace tracking and targeting capabilities with ambiguous alternatives.