New York – March 14, 2024 – Today, IAB released its annual report, “State of Data 2024: How the Digital Ad Industry is Adapting to the Privacy-by-Design Ecosystem.”

The study, conducted by IAB in partnership with BWG Strategy, surveyed over 500 advertising and data experts at brands, agencies, and publishers. It reveals the substantial operational and financial adjustments being undertaken by the digital ecosystem as it moves towards a privacy-by design architecture.

“The meaningful investments being made are proof positive of the industry’s commitment to a privacy-first orientation,” said David Cohen, Chief Executive Officer, IAB. “Executives are taking notice and funding the right initiatives for the next stage of industry growth”.

Key findings from the study include:

Nearly all (95%) advertising and data decision-makers at brands, agencies, and publishers expect continued signal loss and/or privacy legislation in 2024 and beyond.

The industry is investing in hiring new subject matter experts (SMEs), updating training for their staff, creating dedicated teams, expanding their legal expertise, leveraging new technology, and increasing first-party data efforts.

82% of the respondents said the makeup and structure of their organizations have been impacted by legislation and signal loss. Nearly 80% are training or planning to train their staff directly in data/privacy-related topics, while half of companies are creating or planning to create dedicated teams/departments (49%) and hiring or planning to hire external SMEs (48%).

Respondents believe the new paradigm will challenge targeting, personalization, and measurement. 

More than half expect it to be harder to track conversions overall (55%), post-view conversions (52%), attribute campaign/channel performance (55%), measure ROI (55%), make optimizations (50%), and measure frequency (50%) and reach (47%). Nearly nine-in-ten ad buyers report shifts in personalization tactics, ad spend, and their mix of first, second, and third-party data. Over three-in-four cite selection changes in media channels and KPIs, along with more seller-direct deals.

To improve data quality, brands, agencies, and publishers are turning to first-party data and data-enrichment tools. 

The study found that 71% of brands, agencies, and publishers are currently or planning to grow their first-party datasets, nearly twice the rate of just two years ago (41%).

“To tackle data quality challenges, it’s crucial for brands, agencies, and publishers to continue to adopt innovative analytical methods including artificial intelligence (AI), machine learning, and media mix modeling that are less dependent on tracking signals and third-party cookies,” said Angelina Eng, VP Measurement, Addressability & Data Center, IAB.

The shift to privacy-by-design is transforming media planning and buying. 

Ad spend that taps first-party data and engages audiences at scale are being prioritized. Nearly nine-in-ten ad buyers report a shift in message personalization strategies (89%), ad investment costs (87%), and over three-in-four cite selection changes in media channels (81%) and KPIs (79%), along with more seller-direct deals.

Ad buyers are shifting budgets to Connected TV, retail media, search, and social networks which rely less on cookies, provide access to valuable first-party data and precise targeting, and contain embedded measurement.

Overhauling and reinventing data processes is a costly sea change that will hurt small and medium-sized publishers and favor giants.

Large companies are investing more in identity anonymization training (79%) than small companies (64%). They are also investing more in training in privacy-preserving technologies (62%) — which can cost over $2 million annually — than small companies (44%). Signal loss is already pushing advertising budgets toward closed ecosystems at a moment when independent publishers can least afford to lose revenue.

“The industry’s embrace of privacy-by-design is the right thing for the industry and consumers alike,” Eng continued. “But if small independent publishers aren’t protected, the vibrant, independent open web that consumers love is at serious risk.”

The study, State of Data 2024: How the Digital Ad Industry is Adapting to the Privacy-by-Design Ecosystem can be downloaded here.

About IAB
The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.

About BWG Strategy
Established in 2013, BWG Strategy is a primary research firm with an unwavering commitment to data quality. Our journey began with hosting live in-person events featuring industry thought leaders in New York City. These events have established BWG as a trusted thought partner to the buyside community.​ As BWG’s reputation for investment-grade insights grew, so did the strong client following. Today, BWG’s research is leveraged by 300+ investment firms managing over $6T in assets. BWG supports multi-strategy funds, private equity and venture capital investors, as well as corporate decision makers in finding answers to their most challenging questions.​ BWG Custom Research, the firm’s fastest growing segment, delivers meticulously tailored custom research projects to help clients in their research and decision making. BWG Custom Research team is proud to serve a diverse client portfolio that spans the top private equity and management consulting firms, and Fortune 500 corporations. BWG Custom Research offers solutions for a wide array of use cases, including product marketing, mergers and acquisitions, customer and competitor studies and thought leadership. This dynamic evolution underscores BWG Strategy’s commitment to providing innovative, tailored research solutions that empower its clients to excel in an ever-changing business landscape.

IAB Media Contacts
Brittany Tibaldi / Michael Vaughan
347-487-6794 / 813-210-1706
btibaldi@kcsa.com/mvaughan@kcsa.com

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In past years, IAB’s State of Data report highlighted the digital advertising industry’s lack of preparedness for data privacy changes and signal loss, which have significantly altered addressability, measurement, and digital advertising overall. This year’s study, our seventh annual State of Data, now finds the industry fully recognizing the permanence of these challenges, leading to substantial organizational changes including hiring experts, training staff, forming specialized teams, enhancing legal and technological capabilities, and revising advertising strategies.

Key takeaways include:

• The industry has now fully acknowledged the privacy-by-design ecosystem: 95% of data and advertising decision-makers at brands, agencies, and publishers expect continued legislation and signal loss in 2024 and beyond.
• Brands, agencies, and publishers are making significant organizational changes to adapt: Over 80% say the makeup and structure of their organizations have been impacted by legislation and signal loss.
• The market is facing sweeping declines in accessible, high-quality data: About three-in-four advertising and data leaders expect the ability to collect and leverage integral consumer data, including browsing history, PII, and location to be continually reduced while 60% expect the same with demo, user preferences, and behavior.
• Legislation and signal loss have profoundly impacted media planning and buying: Nearly nine-in-ten ad buyers report shifts in personalization tactics, ad spend, and their mix of first, second, and third-party data. Over three-in-four cite selection changes in media channels and KPIs, along with more seller-direct deals. 

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In past years, IAB’s State of Data report highlighted the digital advertising industry's lack of preparedness for data privacy changes and signal loss, which have significantly altered addressability, measurement, and digital advertising overall. This year’s study, our seventh annual State of Data, now finds the industry fully . . .

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In January, IAB proudly unveiled the final version of these guidelines, a testament to collaborative expertise and industry-wide consensus. This comprehensive framework is not just a set of standards but a roadmap to enhanced transparency and consistency in retail media measurement.

To further support the implementation of these guidelines, the IAB, in partnership with Boston Consulting Group (BCG), introduces the “Retail Media Measurement Guidelines Explainer.” This playbook is more than a companion document; it’s an actionable guide tailored for retailers, brands, agencies, and technology partners. It translates the complex standards into practical steps, offering key strategies and best practices to navigate the nuances of retail media measurement effectively.

This coordinated release of the guidelines and the playbook marks a milestone in our commitment to driving clarity, performance, and growth in the retail media landscape. We invite stakeholders to leverage these resources and join us in shaping the future of retail media.

Download the IAB/MRC Retail Media Measurement Guidelines

Download the BCG & IAB Retail Media Measurement Guidelines Explainer

2023 IAB Connected Commerce Summit: Retail Reimagined Highlights

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In January, IAB proudly unveiled he final version of these guidelines, a testament to collaborative expertise and industry-wide consensus. This comprehensive framework is not just a set of standards but a roadmap to enhanced transparency and consistency in retail media measurement.

To further support the implementation of these guidelines, the IAB, in partnership with Boston Consulting Group (BCG), introduces the “Retail Media Measurement Guidelines Executive Playbook.” This playbook is more than a companion document; it’s an actionable guide tailored for retailers, brands, agencies, and technology partners. It translates the complex standards into practical steps, offering key strategies and best practices to navigate the nuances of retail media measurement effectively.

This coordinated release of the guidelines and the playbook marks a milestone in our commitment to driving clarity, performance, and growth in the retail media landscape. We invite stakeholders to leverage these resources and join us in shaping the future of retail media.

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In the retail industry’s evolving landscape, the emergence of in-store opportunities within Retail Media Networks (RMNs) is a pivotal development. With most retail transactions still occurring physically, there is a growing recognition of the potential in bridging digital advertising with in-person shopping experiences. Retailers and Consumer Packaged Goods (CPG) companies are innovating in brick-and-mortar spaces to create a more engaging and interconnected shopping journey.

The focus is now on building pervasive, omnichannel experiences that merge digital advancements with the physical retail environment. Personalized advertising, utilizing technologies like digital signage, in-store analytics, and mobile marketing, is central to this approach. These tools aim to capture customer attention and foster engagement, making every in-store interaction both memorable and impactful.

IAB is launching a DOOH and In-Store Retail Media working group on February 7, with the objective of developing a playbook that will enable and educate retailers, agencies, and brands on the DOOH and In-Store opportunity in retail media from activation to measurement. The playbook will focus on the following areas:

1. Balancing trade and media planning and strategy in-store.
2. Defining measurement metrics and advanced modeling methodologies.
3. Providing an in-depth view of technologies, use cases, and frameworks.

First meeting will be on February 7 – join the working group!

Learn more about IAB’s Connected Commerce Initiative and check out our Introduction to Retail Media course.

Download Quantifying Retail Media In-Store Success: Measurement & Innovation

Download

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Challenging Self-Assessment: The Bias of In-House Measurement and Certification

The practice of self-measurement, prevalent among various industry players from large tech companies to media publishers, inherently introduces bias. This self-certification, lacking independent audits, can pollute the ecosystem with metrics that may not be impartial.

This issue intensifies when publishers and agencies certify solutions without advocating for third-party accreditation, effectively grading their own homework. Such practices can embed bias and diminish the transparency and equity crucial for the digital advertising marketplace.

The False Assurance of Unverified Compliance

The industry is further compromised by ad tech and measurement companies that claim adherence to measurement standards without undergoing the rigors of independent accreditation. This situation demands that stakeholders, including advertisers, agencies, and publishers, approach these claims with a healthy dose of skepticism and demand accredited substantiation.

Assessing Investments Versus Accreditation Commitment

The argument that the accreditation process is prohibitively costly and complex is often contradicted by the substantial investments that companies are willing to make in research and marketing. This contrast raises the question of whether such companies are truly committed to transparency or if they are avoiding accreditation for fear of revealing deficiencies in their procedures and quality controls.

The IAB Tech Lab’s Compliance Programs offer a feasible starting point towards accreditation, providing a structured yet flexible framework for companies to align with industry standards. This preliminary certification paves the way for the more comprehensive Media Rating Council (MRC) accreditation process.

Accreditation, particularly under the MRC purview, is a robust indication that a service has not only passed an audit but has also gained approval from an audit committee and the MRC Board of Directors. Maintaining this status requires passing annual audits, which serve to uphold the high standards of quality and reliability in audience measurement.

Acknowledging the non-profit status of organizations like IAB Tech Lab and MRC is crucial. They are dedicated to preserving the standards and guidelines of digital advertising, not to generating profit, ensuring that the costs of accreditation support a more reliable advertising environment.

Advocacy for Verified Measurement Standards

The digital advertising sector must demand more than simple assertions of compliance; third-party accreditation or, at minimum, independent certification, must be recognized as an essential criterion. The absence of this is a significant concern that should prompt further investigation and caution.

The industry’s move toward regularized third-party accreditation is a step toward ensuring that all partners can substantiate the impartiality and accuracy of their data. This transparency is the cornerstone upon which trust is built in the digital advertising realm.

At this juncture, the industry must embed third-party accreditation into its core practices. The hesitancy to pursue accreditation because of its perceived expense or difficulty is no longer tenable. Adherence to data privacy laws, especially in the context of preventing unauthorized fingerprinting or stitching of personal user data without consent, underscores the criticality of this effort. The collective endeavor of advertisers, agencies, and publishers to insist on unbiased, accredited measurement practices will be pivotal in creating an ecosystem where trust, transparency, and respect for user privacy are the standard.

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The impact of privacy regulations and continued data signal loss in this evolving environment cannot be overstated. As stricter privacy laws and technological advancements like Apple’s App Tracking Transparency framework continue to reshape the data landscape, businesses face the challenge of operating with reduced access to consumer data. This shift requires a fundamental rethinking of data-driven strategies, with a focus on developing more resilient and innovative approaches to data collection and analysis. Companies are compelled to pivot towards more privacy-conscious methods. These changes, while challenging, also present opportunities for growth and innovation in data processing and consumer engagement strategies. As the landscape evolves, adapting to these changes will be crucial for businesses seeking to remain competitive and maintain consumer trust in an increasingly privacy-focused world.

Here is a list of top 10 trends I see unfolding in 2024:

1. Transitioning Beyond Third-Party Cookies
   We’re witnessing a pivotal transition beyond third-party cookies, moving towards privacy-by-design targeting methods like contextual and cohort-based approaches. This shift, notably marked by Google’s Privacy Sandbox set to start phasing out cookies in January 2024, is further intensified by ongoing data signal loss by Apple and evolving data privacy regulations. This is more than a mere shift; it’s a reinvention of audience targeting and measurement that demands a deeper engagement with technologies that marry privacy with targeting accuracy. This transition has been a long time coming, and the industry has been -or should have been- preparing for these changes for the past three years, underscoring the need for adaptability and foresight in the evolving landscape of digital advertising.
2. AI: A New Era in Measurement and Attribution
   Artificial intelligence is taking center stage in measurement and attribution, filling the void left by the decline of traditional data signals. The use of synthetic data, blending ad tech and martech solutions, is set to revolutionize our understanding of consumer behavior and campaign effectiveness.
3. The Challenge of Cross-Channel Measurement
   Achieving a unified view of customer journeys will continue to be a challenge, yet we’ll see significant strides in this area. Despite evolving privacy regulations and technological shifts, innovations in cross-channel measurement tools will provide new insights into consumer behaviors across platforms.
4. The Rise of Attention Metrics
   As the digital advertising industry transitions away from cookie-based metrics, the focus will increasingly shift towards attention metrics. This shift is underscored by initiatives from IAB and MRC to develop a set of measurement guidelines for attention. Such efforts are expected to lead to a more uniform and consistent approach across the industry.
5. The Strategic Use of First-Party Data
   With the decline of third-party cookies, first-party data is gaining unprecedented importance in 2024. Companies will, however, need to strike a delicate balance between leveraging this data for targeted advertising and adhering to stringent privacy regulations.
6. The Evolution of Data Clean Rooms
   Data clean rooms are poised to grow in sophistication and importance within digital advertising strategies. Looking forward, we anticipate significant advancements, expanding their capabilities in multi-touch attribution, media mix modeling, consumer journey analysis, prediction forecasting, and more. Data clean rooms will remain pivotal in addressing the need for comprehensive data analysis while navigating privacy concerns.
7. Programmatic Advertising Evolves
   Programmatic platforms will be in a constant state of adaptation as they navigate the evolving landscape influenced by the Privacy Sandbox and Apple iOS. This dynamic environment will drive a transformation towards more controlled advertising environments, such as private marketplaces, preferred deals, automated guarantees, and a resurgence of direct buys. This shift will prioritize user experience and content quality, moving away from broad-reaching, automated approaches of the past.
8. Retail Media Networks and Data-Driven Success
   Retail Media Networks (RMNs) are set for significant growth, driven by the adoption of standardized measurement guidelines. Those that prioritize data-driven strategies and foster internal collaboration will likely emerge as the leaders in this space.
9. The New Talent Landscape
   There’s a growing demand for professionals skilled in privacy management and AI. Companies that invest in attracting and developing such talent, offering the right tools and opportunities for growth, will be better positioned in this evolving landscape.
10. Increasing Ad Spend in Streaming Audio, Podcasting, and Gaming
    Anticipate a notable surge in ad spending in streaming audio, podcasts, and gaming as these platforms gain prominence in digital advertising. Advertisers recognize the value of engaging highly-targeted audiences in these immersive mediums. Streaming audio facilitates personalized brand connections, podcasts offer unique storytelling opportunities, and the gaming industry provides interactive ad experiences.

Final Thought
As the advertising and marketing landscape undergoes profound transformation, success hinges on adaptability, technological investment, and the unwavering commitment to consumer privacy and responsible data management, heralding a future ripe with innovation and growth. This evolution is shaped by the impact of stringent privacy regulations and the continuous loss of traditional data signals. Businesses are challenged to innovate and develop resilient strategies that respect privacy while still delivering insightful data analysis. This shift towards privacy-conscious methods, leveraging first-party data, and exploring AI for insights, is not just a response to regulatory changes, but also an opportunity for growth. Embracing these changes and adapting to the new privacy-centric landscape will be crucial for companies aiming to maintain consumer trust and stay competitive in a digital world where privacy is paramount.

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