SQADPOD: 5 Game Changers Every Advertiser Should Know – August 2018
Industry news and insights podcast curated from the world of advertising and marketing trends.
Summer is winding down and the pumpkin-spice lattes are waiting in the wings. There’s just enough time to squeeze in one last beach day, a couple of more outdoor movie nights, and a pool party before it’s all over. But even as summer slows down, the industry news and trends are not. This month we’re discussing Google’s programmatic OOH plans, NBCU’s promotional streaming service, the consolidation of ad tech firms, Amazon’s eye on movie theaters, and California’s tough new online consumer protection law.
- Google is Headed Out-of-Home
- NBCU’s Roundabout Streaming Strategy
- The Rise and Re-Shuffle of Ad Tech
- Grab the Popcorn, Amazon Goes to the Movies
- California’s Version of GDPR
1. Google is Headed Out-of-Home
What do you do when you’ve conquered the digital advertising world and become the undisputed leader in online ads? Well, if you’re Google, you take your game on the road – literally. The potential value of out-of-home advertising (that’s your billboards, street signs, bus ads, etc.) seems to have caught the eye of the digital giant. It is reportedly looking to expand its programmatic technology onto physical billboards, and other OOH ad spaces, with the goal of targeting key demographics based on time and place data it collects through its Android operating system. Leveraging this digital data into the real world would give Google a leg up on their closest competitor, Facebook. Without the robust geolocation data of Google, Facebook does not have the flexibility to take their data off the screen. By aggregating and generalizing target demographic data from their mobile platform, Google will be able to offer advertisers more relevant ads to the people in the vicinity of a billboard at any given time. Imagine: a billboard in a New York City subway station during rush hour can be programmed to display an ad targeting men 25-54 with incomes of $85K+, and then change at midday to target women 35-55 who like yoga and fitness. In theory, the ads would rotate based on the demographic majority around the ad at any given time. While privacy policies will prevent Google from targeting based on individual web history, programmatic advertising based on mass data collection could be a game changer for the outdoor advertising industry.
2. NBCU’s Round About Streaming Strategy
Traditional television networks are continuing struggle to find a place in the over-the-top (OTT) market. Streaming services like Netflix, Hulu, and HBOGO are taking eyeballs away from traditional linear TV arena, and advertisers have been noticing. NBCUniversal (NBCU) made its attempt to enter the streaming world back in 2016 with the launch of their $3.99-per-month service, Seeso – we don’t blame you if you’ve never heard of it – shutting down after only two years. Now, NBCU has regrouped to introduce a new service with a totally different approach. The platform is called WatchBack and is planned to launch by the end of this year. This free service will not include any exclusive or original content but, instead, give viewers access to a limited numbers of episodes from NBCU’s channels including USA, Syfy, NBC, etc. Rather than diving into the already crowded OTT market, NBCU is using their app to lure viewers back into traditional television by teasing them with broadcast content. On top of this strategy, NBCU is also considering incentives and rewards for watching their programming. It is certainly a different strategy from other OTT and their original Seeso service – using streaming not as the end goal but as the bait, with the true agenda of bringing viewers back to traditional TV. We’ll have to see if this plan actually attracts viewers back to NBCU’s linear TV viewing format.
3. The Rise and Re-Shuffle of Ad Tech
Ad tech firms have experienced exponential growth in the past decade, fueled by the combination of innovative ideas and the generous streams of venture capital looking to cash in on the growth industry. With advancing technology, advertising has undergone a metamorphosis in the ways we create and deliver digital ads. Thanks to innovations from new start-ups, everything from programmatic advertising to header bidding has changed. But, the good times can’t last forever. In the past few years we have a seen a decrease in funding to ad tech firms, as competing against Facebook and Google prove to be a challenging battle. The duopoly’s control over the advertising industry continues to grow to squeeze out smaller ad tech firms – forcing smaller players to either consolidate or close their doors. In the past, ad tech startups have served as catalysts for technological innovation by constantly pushing the limits and reframing the strategies for effective targeting. As investors lose their appetite for smaller firms to take on Google and Facebook, funding dries up and fewer potential disruptors enter the scene. Last year, more than 90% of the $88 billion in online ad spending went to Facebook or Google, and the number of independent ad tech companies fell 21% to 185 as of the second quarter of 2018. The decrease in these startups could change the game as there may be fewer opportunities to transform the industry.
4. Grab the Popcorn, Amazon Goes to the Movies
It has become obvious that Amazon will not be constrained to the limits of the digital world. On top of the jaw-dropping acquisition of Whole Foods last summer, they are now reportedly in talks to buy up Landmark Theatres, which has 52 locations across the US. If they seal the deal, it would put Amazon in the center of an entertainment/advertising ecosystem that would not only benefit their own in-house content, but provide a one-stop-shop for major studios looking to advertise their films on the big screen and the small screen. Not only can Amazon advertise its own films in Landmark Theatres, but it can also offer advertising opportunities for other films on its website and apps – which can be targeted at consumers who watch movies. While the larger strategy of Amazon is not completely transparent, one thing is coming into clear focus: Amazon is looking to close the circle on consumer activity to have a hand in every part of the experience.
5. California’s Version of GDPR
The enactment of GDPR in the European Union sent shockwaves across the world, and now tech companies and advertisers are bracing for a new wave of regulations as California plans to implement its own version of GDPR by 2020. Dubbed the California Consumer Privacy Act (CCPA), it follows in a similar vein to the EU regulation. CCPA’s primary purpose is to protect user privacy, provide transparency as to what kind of information businesses are collecting from them, and give them the option to opt out of the sale of that information. While consumers and privacy advocates may applaud the effort, industry trade groups are gathering their arguments against it. The Association of National Advertisers has stated that the law “threatens the free flow of information and impacts U.S. consumers and businesses” and that it “creates a false sense of concern in the public about the use of largely innocuous marketing data.” No matter how you fall on the subject, there is little doubt that the CCPA will be a game changer once implemented. Just as auto manufacturing rules adopted by California have found their way across the country, you can bet we’re going to see other states embrace these restrictions, which will transform the future of consumer data collection.