Adtech’s future – AI, first-party data & privacy

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Gil Sperling | Co-founder | CEO | Flow | mail me |


Adtech organisations sit at the very edge of innovation and the evolution of marketing. Artificial intelligence (AI), machine learning, the rise of data alongside the demise of the third-party cookie, have reimagined contextual messaging, creativity, and campaigns at scale.

Over the past year, the deal volume among adtech and martech companies saw an increase of 82% year-on-year despite concerns that the sector wouldn’t cope with the changes in third-party cookies and the introduction of privacy-focused targeting solutions. This is largely due to the industry’s ability to embrace emergent technologies as well as its access to and understanding of data.

1st-party data strategy

First-party data is one of the most significant trends emerging and it’s driving both a shift in marketing spend as well as innovation in the sector. Under the spotlight because of regulatory changes, data sourcing, usage and protection are becoming increasingly important. However, for companies embracing this change, there is also a powerful opportunity to thrive.

Companies with a 1st-party data strategy can also easily embed data privacy into their approaches and strategies to ensure sustainability and translate complexity into innovation.

It’s an exciting time because of this massive paradigm shift. We’re living on the edge of change and it’s healthy. Truly innovative companies aren’t stagnant, and those that are not stagnant, are creating a new narrative. If companies respect this change and interrogate how they can work with the data – especially with regards to keeping it clean, private and secure – then the future is better for everyone. It is the maturation of adtech, particularly in light of the demise of third-party cookies and the irresponsible collection of data.

Consumer consent and privacy have become extremely important in the Information Era and adtech companies need tailored, contextual audiences, enhanced first-party data collection, and finding novel ways of using these touchpoints to discover new ways of connecting with markets and customers.

When it comes to the retail sector, first-party data stands as a cornerstone of understanding customer behaviours, preferences, and patterns. Unlike third-party data, which can often be less reliable and less directly relevant, first-party data is collected directly from customers and it holds immense value for retailers as it offers authentic insights into customer demographics, purchase history, browsing behaviour, and engagement levels.

The shift in retail spend

The trend towards a cleaner internet, and cleaner sourcing of data, is aligned with the shift in retail spend.

Retail media is a great example of how 1st party data can be used and is, to use a great analogy, eating into Meta’s lunch in 2024. Budgets are moving away from Meta towards companies that have access to large quantities of first-party data, such as retailers. What’s also important to note is agencies and other media buyers aren’t under threat, as evidenced by the growth statistics, they’re still purchasing media, but the publishers have changed. Media can now be bought from anyone with 1st-party data, it could now be from an insurer, from a retail giant – the market is open.

– Dan Levy, Co-founder and CEO at Flow

This trend is reflected in the automotive and property industries that have access to vast quantities of user data across key metrics such as user behaviours and preferences. This data offers highly targeted advertising options to real estate agents, developers, vehicle manufacturers and retailers within the motoring sector – all of which can be used to enhance decision-making and planning.

Of course, the data trend doesn’t stand in isolation. AI and machine learning are the gold standard in trends redefining the scale and scope of adtech today and in the future. AI, particularly generative AI (GenAI) has seeped into every industry and the change it’s introducing is as significant as the mobile phone – the ways in which adtech and marketing organisations leverage data and technology is about to fundamentally change, if it hasn’t already.

As much as AI and machine learning are massive trends, these technologies have been at the core of Facebook targeting, and Google data analysis and learning for years. These companies already have more data than anyone and can train their models better than most other companies can. Using AI for targeting isn’t new.

In conclusion

What is new is GenAI and how this is used within your organisation to create content that is personalised at scale.

GenAI is not only transforming how ads are created and served, but also making them more effective by tailoring them to specific audiences. However, the technology is only as good as the foundation it’s built on. We leverage GenAI for our enterprise customer base, enabling companies to adjust and personalise content based on real-time data such as user behaviour or demographics.

Deftly weaving data science and creativity together, adtech partners are connecting the digital dots. It’s the blend of skills, expertise, and technology that is creating the next generation of adtech. This is the best way to stay ahead of, and benefit from, the changing shape of the industry.


 



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