SANTA BARBARA — The marketing industry has been thrown in to turmoil by a collection of digital privacy scandals and regulatory responses that have changed the nature of ad targeting.
But it will recover as one which executes similar opportunities on a different basis.
That is according to one of the arch deal makers responsible for stewarding billions of dollars in ad-tech M&A activity in the last few years.
In this video interview with Beet.TV, LUMA Partners founder and CEO Terry Kawaja describes the impact of the “tech-lash”, the GDPR and CCPA legislation providing a response, and how ad-tech is refocusing from indiscriminate targeting to truly understanding real users.
“That has basically put us in a world now of a lot of uncertainty,” Kawaja says. “We really don’t know what’s going to happen. What shape is the regulation going to take and what restrictions will that put on marketers?
“If the cookie’s gone, what replacement identity opportunities and platforms will there be and what technology will that necessarily need to utilise? And can you even scale it if it’s only based on first party data?”
Kawaja notes that GDPR, Europe’s regulation limiting use of citizens’ data to a strict opt-in basis, prompted a big dip in ad-tech deals. But he says deals picked up again once people figured out how to negotiate the new rules.
Alongside all that, the rise in subscription content is causing some ad buyers to fret that good inventory may be drying up.
But Kawaja remains optimistic.
“I think there is no question that consumers do, when provided the facts around the implicit trade-off they have between free content and utility versus seeing ads, that they will in fact opt in for that,” Kawaja says.
“We’ve seen it with GDPR. The consents are (showing) low single-digit-opt out, and so I think the net (result) of all of this focus will be to change the implicit value trade-off to an explicit one where consumers understand the premise and opt in.”
This video is from a series leading up to, and covering, the Xandr Relevance Conference in Santa Barbara. This Beet.TV series is sponsored by Xandr. Please visit this page to find more videos from the series.