Adtech’s Changing Expectations Amidst Reduced Ad Spend

In this blog post we discuss changing expectations in the adtech ecosystem in the wake of growing economic uncertainty and reduced ad spend. The current climate has caused a demand shift fueled by an appetite for higher levels of transparency, cost-efficiency, and added value. To remain competitive in these uncertain times, digital advertisers are having to adjust. We discuss five key adjustments that adtechs must go through: eliminating inefficiencies, prioritizing quality data, combating fraud, embracing hybridization, and innovation through technology.

Introduction

With global ad spend down and the economy showing signs of precarity, the digital advertising industry is readying itself for a period of change.

Ad budgets are declining, inflation is rising, and the general feeling permeating marketing teams is one of measured caution.

The current climate has caused a demand shift. The ad ecosystem has been challenged with a new set of expectations - greater levels of transparency, quality, and efficiency.

But amidst great uncertainty lies opportunity for widespread industry innovation. So, what are these expectations and what’s set to change moving forward?

Key Adjustments in Adtech

• Inefficiencies must be eliminated: Supply chain redundancy is one of the biggest causes of inefficiency. It's primarily caused by auction duplication, reselling, and multi-integrations. Research suggests that 59% of publishers operate at least one direct supply path that consistently fails to effectively qualify demand side platform (DSP) bids.
• Data quality must come first: With third-party cookies in depreciation after mounting concerns over user privacy, privacy-first data practices have become a fundamental imperative. Adtechs need to start transitioning to third-party cookie alternatives sooner rather than later.
• Combating fraud must become a priority: With ad fraud becoming increasingly sophisticated, the issue is a pressing one. Deterministic and preventive action against ad fraud (such as the recent Vastflux attack) is needed to maintain trust and value in digital advertising.
• Embracing hybridization: Digital advertisers need to diversify their offerings. Hybridization through combining direct and programmatic selling is key. A survey found that 88% of publishers believe direct selling will become more important amidst cookie depreciation.
• Innovation through technology: With new technologies emerging, the possibilities for adtech are vast. Connected TV (CTV) campaigns are becoming increasingly popular, while in-game and audio advertising offer new ways to engage audiences.

Conclusion

In the wake of reduced ad spend and increased economic uncertainty, the adtech ecosystem is at a crossroads. By eliminating inefficiencies, improving data quality, combating fraud, embracing hybridization, and driving innovation through technology, adtech can evolve to meet new demands and thrive in the future. Do you agree? How do you think the adtech ecosystem will adapt to these new challenges and expectations?