4 Things Advertisers Must Consider To Be Successful In 2022

Sergii Denysenko, CEO at MGID.

While many pandemic headaches have stubbornly lingered into 2022, advertising has fared better than anticipated. Digital ad spending in the U.S. is predicted to reach $239.89 billion this year, a 13.6% increase from 2021.

Despite this encouraging outlook, one factor is reasonably certain: The rest of the year for digital advertising won’t be issue-free. Advertisers striving to forge a path toward prosperity and success this year should consider four key areas:

M&A Growth In The Ad Tech Market

The ad tech sector has witnessed a phenomenal increase in M&A activity. Last year alone, there were 90 mergers and acquisitions, compared to 30 the previous year. While we have continued to see more deals in ad tech this year overall, M&A activity in the sector declined 25% in the first quarter of 2022 compared to the previous one, and there could even be an outflow of investors’ money from the market closer to the end of the year.

One reason for this is the rapid approach to the demise of third-party cookies. While big tech platforms like Google and Facebook are still the main sources of audience generation for publishers, it’s likely we’ll see increased partnerships between publishers and independent tech companies building their own walled gardens, reducing their over-reliance on tech giants.

This year, we’ve already seen Media.Monks partner with California data company 4 Mile Analytics and Hasura raise $100 million. In addition, Magnite has bought Nth Party, a startup specializing in secure audience data-sharing and analysis. These partnerships signal a shift toward smaller, more strategic deals where mergers serve to reinforce performance in specific geographical regions or complement each other’s products. Publishers should keep a close watch and consider if this is a path they should take.

First-Party Data

The path to the cookieless world remains bumpy, and it’s increasingly looking like it will involve multiple solutions rather than one outright replacement, with first-party data-based solutions high on the list—even labeled by some as vital for survival.

Despite the extra breathing space afforded by Google’s delay of third-party cookie deprecation, advertisers and publishers alike have felt growing pressure to find fast alternatives for multiple reasons. One is that Google’s new cookie replacement, Topics, may not provide granular enough insights for effective ad targeting, as well as possible complications caused by Apple’s ongoing privacy changes. Both issues have put their viability as a single fix in doubt, driving the urge to pinpoint other options ahead of the 2023 deadline.

But there is also the growth of wider privacy regulations to consider. Last year saw no less than 23 states propose privacy legislation, many of which included some kind of consent provision for personal data processing, signaling that even without a federal law and regardless of any delays from Google, harnessing owned or consented data will be critical.

For the rest of 2022 and beyond, maximizing access to crucial audience data will mean both increasing stores of owned data and forging closer relationships with publishers to ensure deals can run on a steady supply of first-party insight, as well as IDs based on first-party data. In fact, a mixed approach is already on the cards for many advertisers: 60% are now focused on drawing more insights from their own data, and equally as many expect enhancing it with data from other sources will be important.

Contextual Advertising

Valuable as first-party data may be, there is a rising awareness that it has limitations. From Gartner to Nielsen, major forces acknowledge that framing ad operations entirely around owned data comes with challenges—the biggest is that access depends on consumer willingness to volunteer information. In short, it brings high-quality and compliant insight, but not always at scale.

Consequently, alternatives that look beyond finding new ways to preserve the one-to-one advertising model have begun attracting more attention, including context-based ads—ads that are relevant to a webpage’s content. The cause of context has also been bolstered by the development of platforms harnessing artificial intelligence (AI) to provide precise targeting. Therefore, context-based advertising is an increasingly attractive option as it performs alongside targeting-focused AI, dropping the need for consumer-provided information.

Taking advantage of the capabilities that contextual innovations afford is key for advertisers to ensure they can maintain ad effectiveness when both first-party data signals and consent are lacking.

E-Commerce

The real blockbuster moment for e-commerce growth was, of course, 2020—with sales soaring by 25.7% to over $4 trillion. Although this trajectory slowed through 2021, the continual climb in sales means there is still huge scope for retail platforms to take advantage of high online spending and to expand their businesses, which can bring more opportunities for advertisers.

Much like publishers, retail platforms are the gatekeepers of valuable data about the audiences they serve. Where Amazon has unsurprisingly been among the first to capitalize on this advantage, the past 12 months have also witnessed steps from smaller players to bundle their media and data from purchases, loyalty cards and interactions into attractive packages for agencies, including leading U.K. supermarkets.

As the third-party cookie clock ticks on, these offerings will become more important to plug gaps in consumer insight—meaning the wise move for advertisers is to take action on leveraging them and extending their reach across digital retail channels sooner rather than later.

Gazing into a crystal ball isn’t an exact science, and that’s especially true in the digital ad space. Rosy predictions for the rest of the year don’t guarantee a smoother ride than last year, but by considering consolidation, maximizing first-party data, taking advantage of contextual capabilities and exploring the benefits of e-commerce, advertisers can keep themselves on the right track.


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