Less BS, More Facts, Some Opinions
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The U.S. privacy landscape is on the edge of a new era.
Next year, companies ranging from brands and publishers to agencies and ad tech intermediaries will need to comply with new privacy laws in Colorado, Connecticut, Utah, Virginia and — of course — California, where the existing California Consumer Privacy Act will give way to the even more comprehensive California Privacy Rights Act, or CPRA.
“CPRA definitely raises the bar,” said Fiona Campbell-Webster, chief privacy officer at ad tech firm MediaMath.
The video below features interviews with privacy experts weighing in on how the CPRA ups the ante on companies’ privacy compliance requirements in the U.S., particularly with regard to targeted advertising. It also breaks down the Interactive Advertising Bureau’s effort with the Multi-State Privacy Agreement to simplify the contractual complications required to comply with all five state-level privacy laws taking effect in 2023 and assesses expectations for regulators to enforce the new laws of the land.
“If a company is sharing cookie data in order to track users or sharing information with vendors to track users across multiple websites that are not owned by the advertiser, that’s when the alarm bells go offer,” said Dominique Shelton Leipzig, a partner at the law firm Mayer Brown.
As 2022 comes to a close, a look back through the year reveals a most confusing time for the media agency world, holding differing fortunes as they try to get back to normalcy, whatever that is. The holding companies are feverishly trying to update their offerings and break down silos in an effort to become more nimble, while independents find their niches and exploit them to the best of their abilities.
A few irrefutable trends emerged over this past year that merit revisiting.
The continued rise of commerce media
Judging from the number of agencies and holding companies that launched dedicated e-commerce and/or retail media divisions, it’s safe to say that commerce media is the hottest growth factor media agencies enjoyed in 2022. Just last week UM updated its UM Shopper unit into a more broadly focused UM Commerce — a tacit recognition that the industry’s moved way past just looking to Amazon.
And why wouldn’t they? Commerce media is exploding and is expected to keep up hockey-stick growth for years to come. In the last year alone, so many more retailers opened up retail media network offerings, to the point where Acxiom’s CEO declared to Digiday that everything’s an ad network these days.
Figuring out the meh-taverse
It’s still too soon to call 2022 the year of the metaverse. But this year, media and creative agencies continued to invest time and money into developing virtual and augmented reality, experimenting with immersive content and exploring other decentralized technologies. Some of those efforts have led to more education and testing. Research reminds us that most consumers still have no clue what Web3 means. And that means while clients often are intrigued by how to establish a brand presence or engage people in the virtual world, they are not certain on the best way to play in the metaverse.
Gearing up for the Consumer Electronics Show in January, Dentsu built its first metaverse campus in partnership with Microsoft and productivity platform HeadOffice.Space. But sports and gaming are also major potential expansions in the metaverse, which already has applications from esports to AR and VR platforms. This year, Stagwell launched two different augmented reality apps with the Los Angeles Rams and Minnesota Twins for fans in the stadium and at home with live content and interactive games.
Finding the most flexible media options
The darkening economic clouds — don’t say recession since it’s not formally been declared — have led to many agencies to seek to place their clients’ dollars into media that have greater flexibility. In other words, places where an agency can easily shift, or pull back, spend. That continuing trend picked up in 2022, and the main beneficiaries have been digital media — from social to connected TV (more on that later) to digital out-of-home.
It meant that media agencies lessened their reliance on linear TV, which has stricter policies about moving or cancelling inventory orders. The message being sent by media agencies to television providers seems pretty clear: become more flexible or continue to lose more market share to digital alternatives.
Is there just too much CTV?
The rise in the amount of premium inventory that entered the connected TV marketplace should by all accounts have created a boom for video investment folks. Netflix and Disney+ launched ad-supported versions of their streaming options in fourth quarter, while Apple quietly started putting the pieces together for running ads on its Apple TV service.
But there remains too much confusion and potential fraud, with numerous SSPs and DSPs representing overlapping inventory. And to make matters worse, Netflix has already run into a makegood situation, giving advertisers back some ad dollars due to viewership shortfalls.
Nevertheless, audiences continue to, well, flow, to this relatively nascent version of TV. How an economic downturn will affect the number of subscribers to numerous streaming services remains to be seen.
Stemming the outgoing talent tide
Although the Great Resignation began earlier in the pandemic, the constant flow of people leaving the agency world for other opportunities (or just to do a whole lifestyle change) didn’t abate much in 2022. Agencies of all stripes rolled out training programs and other efforts to stave off deeper losses.
Ironically, the one thing working in agencies’ favor is that the tech world is laying off thousands of workers, making that jump from agency-land to those once-greener pastures far less alluring today.
Do repetitive ads make people tune out? Marketing platform System1 did an analysis testing the effectiveness of ads dating back to 2020, and it showed that the age of an ad made no difference to its performance. Impactful ads stayed impactful. By analyzing and ranking some 100 ads in the U.S. and the U.K., System1 tried to prove that ad “wear out” is more of a myth. — AS
More on the results:
“It’s really hard to have two major holding group agency CEOs get honored in one year. Sometimes, quite honestly, they don’t want to be nominated because they think they still have another five or 10 years left in their career. It’s possible that we wanted to nominate [inductee Omnicom CEO] John Wren a few years ago and for whatever reason, he was like, ‘I’m not ready to be considered for that.’ That has happened. We’ve been talking about [inductee] Antonio Lucio for a couple of years, and he really wanted to wait to be considered until he was no longer a global CMO.”
— Former Facebook executive and new Disney board member Carolyn Everson, who chaired the council of judges selecting the AAF’s inductees to its Advertising Hall of Fame. Besides Wren and Lucio, other inductees include Renetta McCann, Louis Carr, Cathie Black, Aaron Walton and Raul Alarcón, along with corporate inductee Unilever.
As TikTok gains influence with advertisers and users alike, some marketers and security experts say they welcome lawmakers’ efforts to limit the platform’s influence via government-owned devices.
Last week, lawmakers at the national and state level moved forward with legislation to ban government employees from using the app on government-owned devices and computer networks. In addition to the passage of a bill in the U.S. Senate, lawmakers in Alabama and Utah also banned TikTok on government devices, following moves by other states such as South Dakota, Texas and Maryland. Meanwhile, a new bi-partisan bill even went so far as proposing an outright ban on the app in the U.S.
A TikTok spokesperson did not immediately return a request for comment. However, the flurry of legislative action comes as top officials — including National Intelligence Director Avril Haines and FBI Director Chris Wray — raise new concerns about how the Chinese government could use the app to spy on Americans by collecting data or influence users with content. Many of the issues stem back to TikTok’s parent company, China-based ByteDance, which some have said has deep connections with the Chinese Communist Party. Although federal legislation still has a ways to go before becoming law, some say the action is long overdue despite its rapid growth as a marketing platform.
Concerns about TikTok aren’t entirely new. In 2020, then-president Donald Trump signed an executive order to ban the app unless it was sold to a U.S.-based company. However, despite reports of potential buyers, the order also faced legal challenges and never went into effect. Since then, the concerns have become more of a bipartisan issue. Last year, U.S. President Joe Biden revoked Trump’s order but still directed the U.S. Dept. Of Commerce to review apps designed and developed in China. (In June, TikTok announced it would move all U.S. data to Oracle’s cloud platform.)
Members of Congress have also raised concerns including Democratic U.S. Senator Mark Warner, who even suggested that taking action when Trump suggested it might have been easier than two years later. Last week, Federal Communications Commission Commissioner Brendan Carr praised Republican Senator Marco Rubio’s bi-partisan bill to ban TikTok entirely.
“There is now widespread consensus in the U.S. that TikTok presents an unacceptable risk both to our national security and to the safety and privacy of millions of Americans,” Carr said in a statement. “That is why a broad cross-section of national security experts have gone public in recent weeks to express their concerns with TikTok’s unchecked operations in the U.S. The question is no longer whether TikTok’s ongoing operations will come to an end, but when.”
Despite TikTok’s rapidly growing appeal with advertisers, some marketers say it’s smart for U.S. officials to take action on issues of national security. Among those supportive of banning TikTok on government devices is Kevin Renwick, media director at the creative and media agency Mekanism, who explained that there should be limitations to people watching content on government-issued devices.
“I think that TikTok has been busted enough doing things they shouldn’t be doing,” Renwick said. “I can’t even imagine the stuff that hasn’t really been seen yet in the larger ecosystem, especially with everything going on geo-politically.”
Marketers should expand their vision of brand safety beyond media placement, said Mea Cole Tefka, a former head of content and creative who’s worked with companies such as Facebook, Mondelez and the New York-based agency Huge. Despite TikTok’s capabilities around creativity, community-building and its ease of use, she said advertisers should also be concerned about the accessibility of TikTok’s platform data overall.
“There’s an ethical question as to how that data is being used and what are the consequences of engaging,” said Tefka, who now works independently as a consultant building online communities for brands. “The known censorship and propaganda of the [Chinese Communist Party] been compartmentalized by global brands of the business opportunities there, but with TikTok, the waters are very muddy and the lack of transparency needs to be a primary concern.”
In addition to worries about whether TikTok is collecting U.S. user data, government officials also raised concerns about TikTok’s algorithm and how artificial intelligence is used to recommend videos.
The potential for AI to influence people whether they know it or not is one reason to ban government officials from using platforms TikTok, said Vince Lynch, co-founder and CEO of the AI startup IV.AI. According to Lynch, tech companies that deploy AI should also be required to be more transparent about their intentions for using AI — such as disclosing why and how people are targeted with content — and also be required to train employees how to build ethical data models.
“It’s a real thing because AI influences humans,” Lynch said. “It doesn’t matter if it’s Chinese or not. The same could be said for Meta or for Twitter.”
Lawmakers need to also consider threats posed beyond TikTok, according to Zach Edwards, a data privacy researcher at Human, a cybersecurity firm that works with marketers. He mentioned the example of Pushwoosh, a Russian software platform that was reportedly disguised as a U.S.-based company and whose code has been used by many mobile apps including some used by U.S. government organizations.
“Most Americans are protected by minimal data privacy laws and so from that perspective alone,” Edwards said. “Companies targeting U.S. consumers with products who have deep ties to foreign governments should be looked at skeptically by many people, and potentially avoided.”
Despite the concerns, the number of brands using TikTok continues to grow, according to app analytics company AppsFlyer. In November, U.S. brands and publishers saw a 206% year-over-year increase in actions — which includes likes, shares and comments — while video views for brands and publishers grew by 166% and total followers grew by 427%, according to AppsFlyer, which did not share specific numbers.
TikTok’s popularity with users also continues to grow. AppsFlyer said more than 119 million U.S. users visited TikTok in October, a 12% increase from October 2021. And despite its appeal with younger users, the fastest growing groups are older than the average TikTok user. According to AppsFlyer, total users over 65 grew 27% while users between 35 and 44 grew 23%.
Lynette Owens, vice president of global consumer education at the cybersecurity firm Trend Micro, said legal action can help bring about change but doesn’t entirely ensure user safety. According to Owens, people need improved digital literacy and transparency related to how platforms like TikTok work and what data they collect.
“Many may choose not to [use the platforms] if they are not comfortable with the amount of privacy and data that we give up in order to use them,” Owens said. “A great analogy here is that of putting the ingredients, calories, and other nutritional information on food packaging and seeing people change their eating habits once armed with this information.”
OnStar is spending upwards of 90% of its ad budget on digital addressable media. The 25-year-old in-vehicle safety and security system company is hoping the strategy will allow it to more effectively target customers and better inform its 2023 marketing strategy.
“We know who many of our consumers are, and we want to make sure that we’re hitting our reach and frequency targets to them as precisely as possible,” said Laura Thornton, head of marketing for the digital business team at General Motors, OnStar’s parent company.
Over the past year, OnStar has ramped up its addressable media efforts in streaming, audio, social media and connected television. The latter of which has become a trend across the industry, especially as third-party cookies are disappearing from the digital advertising ecosystem. (Read more on that here and here.) To create its targeted audiences, OnStar leverages a combination of first-party data along with proprietary media targeting tools.
A big portion of the company’s spend this year was dedicated to streaming audio, including a branded podcast and in-stream podcast advertising. Last year, OnStar’s addressable media spend accounted for about 60% of its budget. This year, that figure was 90%, a significant increase. (Thornton did not disclose specifics.)
“The reality is all of us as marketers are trying to learn what the right mix of addressable spend is,” Thornton said. “We said, ‘Listen, let’s make this the year that we go all in on addressable and see how it plays out for us, and then for 2023, let that inform our plan a bit better.’”
So far this year, OnStar has shelled out more than $3.3 million dollars on advertising, compared to spending just over $3.5 million in 2021, according to Pathmatics. Meanwhile, Kantar reports that the vehicle security company spent more than $2.8 million on advertising from January to June this year. Within that same time period last year, OnStar spent more than $31 million on advertising, a significant difference from this year’s spend. (Kantar does not track social media spending as Pathmatics does.)
An addressable media-led strategy like the one OnStar is using not only allows the company to access more information, but also allows for more targetable media within channels that can typically be difficult to target, including television and radio, according to David Mirsky, group director of media at MMI Agency.
“Taking this approach, a brand can be more efficient and, ideally, drive more sales with less waste of media impressions,” Mirsky said in an email.
Across the data-obsessed ad industry, addressable media has become increasingly more important with advertisers looking to better target customers. It’s a trend that experts expect to continue as targeting improves and costs decrease.
“As cookie data goes away, the importance of addressable media becomes even more crucial, to ensure that media dollars are reaching the right audiences,” Craig Kronenberger, founder and CEO of data and digital marketing firm Stripe Theory, said in an email to Digiday.
The learnings from this year’s strategy are what will inform OnStar’s marketing strategy next year, per Thornton. Heading into 2023, there are plans to expand the media mix, making space for linear television and other more traditional media channels while continuing to lean into addressability in digital, she added.
“Expect to see more from us. I can’t really share whether that’s more from a budget perspective or just more fun things, but we will be more present next year,” she said.
Publishers’ fourth quarter commerce plans usually kick off as early as August, but that doesn’t make holiday weeks any less stressful. Hours get longer, the number of stories published increases and inboxes get even more full of product pitches from eager publicists.
In this edition of Digiday’s Confessions series, in which we exchange anonymity for candor, a commerce writer talks about their experience writing gift guides and holiday shopping stories.
While the source initially wanted to move into the commerce space for a better salary — they were able to move up from $40,000 as an editorial assistant to $60,000 as a commerce writer — that shift came with an increase in responsibility.
“I do think the commerce job descriptions are a lot harder than edit’s. With money comes time. You have to work holidays, you have to meet goals, but you’re compensated more on commerce than you are on edit,” she said. For this piece, Digiday spoke to her amid the Black Friday shopping season.
This interview has been lightly edited and condensed for clarity.
Not so much on Thanksgiving, and that’s truthfully just because I have a great manager. I can imagine other teams do, but I don’t have to. I log on Thursday night after I’m done eating [though] because I want to make sure that everything is good to go for six o’clock in the morning on Black Friday. Friday I work all day [as well as] on Saturday and Sunday.
Those days are compensated and can roll into next year, so I’ll be taking a nice trip in January. And [my company] also gives us meal reimbursements for those days.
We each are assigned categories or topics [to cover] unless something [unexpected comes up] from a brand. We’re constantly updating those stories, changing things that are out of stock, replacing things, changing headlines, republishing [stories] and putting everything on social media to make sure people see it.
This time of year is 100% the most stressful time of year for everybody in the world because of the holidays, but as a commerce writer, it just doubles everything. It becomes very stagnant and everything starts to sound exactly [the same]. How many ways can a person say, “These are the best deals for Black Friday?”
When you’re working on so much content and such similar content at once, it gets confusing. A great example is I wrote the gift guide for Nordstrom, but I also am writing Nordstrom holiday deals for Black Friday. So it gets confusing. I mean, I’m human.
But the most stressful part about it is that you are working during the holidays and I think people forget that. I want to be able to sit down on Thanksgiving and not think about Glossier’s best deals, but it’s become truly impossible.
My personal quota is based on [number of] stories. I have to write seven stories a week.
But there’s two [goals we have to meet]. There’s a brand quota, which is the amount [of money] we have to make [as a brand] and I couldn’t tell you the exact number because it changes every day based on the economy. And then there’s a company quota, which is what [our parent company] wants to make in a four-month-long period [across all of its brands].
And we make it, we get it done. And if we don’t, it’s not like we’re getting fired or anything like that. But there’s always that conversation of why didn’t we do it? What can we do better?
My email is like a landing spot for all the brands and I’ll go through them. Honestly, I was writing a story yesterday and I went into my inbox and I picked the first three from the top of my inbox, which I know could be messed up to some people, but I don’t have a lot of time.
But also the good thing about being on the commerce team is that you have access to all of these different dashboards, where we can specifically see what people are buying and I go based on that. So I know [a makeup brand] sells really well on [our website] so I try to include it as much as I can without making anything look like overkill.
It could come down to me shopping on my own time on my Amazon app or [ideas could come from] my friends who saw something on TikTok. But people are so easily influenced so I could sit here and praise a Gucci lipstick, but people probably aren’t going to buy it if it’s not one that the girl on TikTok went viral raving about.