2023 has been a year of big changes for marketers. Artificial Intelligence tools like ChatGPT have transformed how many of us do our jobs, third-party cookies are on the cusp of being retired, and consumers have become more privacy-conscious than ever before. Despite the enormity of these changes, in many ways they’ve just set the scene for the big things to come in 2024. To understand what’s going on, we’ll briefly review MarTech trends in 2023, and then dive into the top MarTech trends in 2024.
Table of Contents:
- 2023 has set the stage for some major changes in 2024
- Top Martech trends in 2024
- #1 Regulators will continue to aggressively expand user privacy protections
- #2 MarTech will scramble to adopt cookieless solutions or find themselves left behind
- #3 Digital advertising will be swamped with Alternative IDs
- #4 The advertising industry will be defined by innovation and disruption
- #5 The rise of the content fortress and first-party data
- #6 The battle of the adblockers
- MarTech will change in 2024, but more for advertisers than users
2023 has set the stage for some major changes in 2024
While 2023 was an important year for marketers, it wasn’t as transformative as some believed it would be. Consumer concerns over privacy have continued to grow, but efforts to actually address it have been gradual. For example, in 2023, Google pushed back the date it will finally retire third-party cookies for the second time. Now, the first phase is set to come in Q1 2024, when 1% of Chrome users will no longer use third-party cookies, with the remaining users slated to go cookie-free in the second half of 2024. This will mark the beginning of advertising without cookies.
The intention behind the delay was to provide marketers with more time to test, provide feedback, and adopt Privacy Sandbox-based solutions at scale prior to the initial third-party cookie phase-out. Tracking cookies are a foundational aspect of most modern marketing, and they provide advertisers with simple ways to connect with users and understand their preferences. By retiring them, Google is eliminating a key source of privacy concerns, but they’re also removing an essential advertising tool. Considering the impact it would have on the MarTech industry and market, they needed to develop an alternative. This took the form of the Privacy Sandbox, which is a collection of tools and proposals designed to create a privacy-friendly environment for advertisers to connect with customers.
This delay transformed 2023 into a year when some players, like us at RTB House, used the time to fine-tune our Privacy Sandbox-based solution, and others simply took their foot off the gas, or worse—did nothing at all in the shortsighted belief that Google would never follow through. Whatever different organizations have opted to do, the fact is that 2024 is going to be defined by a fundamental shift in the way marketing works.
With that context established, let’s take a dive into the top MarTech trends in 2024.
Top Martech trends in 2024
Given the 62% market share enjoyed by Google Chrome, any decision the browser’s development team makes will impact the entire online ecosystem. Chrome is retiring third-party cookies, meaning that every major MarTech trend in 2024 will either be related to that decision or a direct reaction to it.
#1 Regulators will continue to aggressively expand user privacy protections
Our first trend is a longstanding one. Regulators, particularly European ones, will continue to actively push new legislation to protect user privacy and safety, as well as increase the enforcement of existing laws crucial for online advertising, namely the GDPR and the ePrivacy Directive.
Among key new EU regulations that will influence the marketing industry are:
- The Digital Markets Act.
- The Digital Services Act.
Generally, EU regulations focus on protecting user data and expanding transparency about how that data is used. These types of acts have already caused companies to adjust how new products, like AI, have been rolled out in the EU. For example, Google had to alter the user control and transparency options on Bard to facilitate its roll-out in the EU.
Most importantly, European regulations tend to spawn similar rules in other jurisdictions as part of the “Brussels Effect.” Firstly, the European market is a large one, so it is often easier for companies and other markets to simply adopt the European approach to facilitate cross-border trade. Secondly, the regulations have extraterritorial reach since companies from such markets as the U.S. have to comply with them because they offer products to European customers.
This will put increasing pressure on marketing companies to adapt to new norms, no matter how disruptive it is to established business models.
#2 MarTech will scramble to adopt cookieless solutions or find themselves left behind
Another trend will be a sudden scramble by many MarTech players (mostly publishers and tech vendors) to adopt cookieless solutions at the last minute. Even though Google Chrome and the Privacy Sandbox team have done everything to give the market time to prepare, many chose to stick their head in the sand and, as a result, are already behind.
Just how unprepared is the advertising industry? Well, despite 85% of consumers preferring marketers to rely on first-party data, 81% of companies are still entirely reliant on third-party cookies in 2023.
In real terms, this means that we will see a lot of grumbling from unprepared Demand and Supply Side Platforms, as well as some publishers and advertisers, who may struggle to adapt to the changes in time. It also means that advertisers may find themselves working with new DSPs who found workable Privacy Sandbox-based (or other scalable, privacy-enhancing) solutions instead of familiar ones who didn’t. This is by no means a bad thing and may result in advertisers finding new partners who outperform their existing ones.
#3 Digital advertising will be swamped with Alternative IDs
As part of this process, we will likely see a rise in the number of cross-site alternative IDs appearing. Unfortunately, these generally attempt to replicate the mechanics of third-party cookies, which is why they constitute a straightforward approach that may be seen as a way for the industry to operate as it always has.
However, although cross-site identifiers replicate the functionality of third-party cookies, they also replicate the ability to identify a single user across many different websites, which, in the eyes of users, browsers, and regulators, constitutes a serious privacy issue. Moreover, they’re not nearly as scalable as third-party cookies, as users have to log in on each site to be identified/re-identified. Thus, we don’t consider them a long-term sustainable method of targeting.
So what’s the alternative? There is no silver bullet, but by using a combination of approaches, it will be possible for advertisers to effectively deliver tailored content to users. This will include a solid mix of first-party data from single domains, Privacy Sandbox-based solutions, and contextual targeting.
DSPs who have built specific tools, like our ContextAI, Seller-Defined Audiences, or Privacy Sandbox-based approaches, will be able to provide more robust future-proof services to advertisers than those reliant on Alternative-IDs.
An interesting area of innovation is likely to be Generative Pre-trained Transform (GPT) products and Large Language Models (LLMs). Most consumers will be familiar with ChatGPT, but newer, more specialized models are already being developed by many companies. For example, in November 2023, RTB House announced the introduction of ContentGPT, which is the next iteration of its Context AI offering. This tool will be able to better understand content on the Open Web and optimize results for RTB House clients.
#4 The advertising industry will be defined by innovation and disruption
After the third-party cookies phaseout begins, there will be a test-and-learn stage for all market participants to verify the utility of their cookieless solutions. They’ll refine them on the fly while providing feedback on required improvements to the Privacy Sandbox team. Market participants will have a number of different cookieless models in place. Since many organizations will see their business models as under threat, there will be a lot of chaos and high emotions across the entire MarTech ecosystem. That chaos should decrease over time, but it’s difficult to say which solutions will be widely adopted by the industry in the end and, most importantly, which will survive the intense regulatory scrutiny that is likely to follow.
We can say some things with confidence. For example, the shift towards first-party data (more on this next!) will benefit companies with the ability to capitalize on diverse data sources. This is something that RTB House has already identified as a key opportunity and that our own Deep Learning algorithms will be able to leverage effectively.
#5 The rise of the content fortress and first-party data
Part of this change will be the increased value of first-party data. This is data which is collected by the publisher or marketer about its own user. As third-party cookies are retired, marketers will increasingly rely on first-party data, which will make it more valuable to the whole advertising ecosystem.
While it will initially be challenging for small publishers to take advantage of this, the big players are already preparing to protect their own content fiefdoms, known as Walled Gardens. The obvious example here is Meta, which controls Facebook and Instagram, and is trying their best to supplant X (formerly Twitter) with Threads. Its reach is fairly massive, with 70% of internet users regularly logging into at least one of Meta’s platforms.
This huge concentration of users and content represents valuable first-party data that Meta can leverage to help advertisers reach people on its platforms. As third-party data becomes unviable, Meta and others will seek to maximize the benefit of their content fortresses and work hard to keep users locked inside their ecosystems.
In addition to this, we are witnessing the rise of Retail Media Networks. These are another type of closed ecosystem, where a marketplace or retailer, for example Amazon, sells advertising space to third-party brands.
On the other side, both small and larger publishers on the Open Web also have an opportunity to thrive with first-party-based privacy-oriented solutions, such as the Privacy Sandbox, publisher first-party identifiers, and Seller-Defined Audiences, providing ways for them to use their own data to satisfy various advertisers’ use cases.
#6 The battle of the adblockers
Speaking of content fortresses, what about the other big one: YouTube? In the last quarter of 2023, there was significant controversy surrounding the platform’s aggressive attempts to stamp out adblockers. Specifically, viewers who were determined to use the technology found themselves unable to access their favorite YouTube videos without either unblocking ads or paying for YouTube Premium.
This move makes some sense. YouTube has to pay the bills somehow, and adblockers were making it harder for content creators to make money on the platform. However, it has upset a vocal subset of the community, who argue that ads on YouTube have become too annoying. This is a very visceral example of the damaging effects of ad fatigue.
Unfortunately, it looks like YouTube was just the first step. As part of the update to Manifest V3, Chrome add-ons (which include adblockers) that rely on Manifest V2 will no longer be supported. This means that many adblock providers will need to find creative ways to replicate the features of V2, and adblockers may be unable to compete with new advertising techniques.
In general, Google’s efforts are reasonable. Ads are fundamental to the open web and enable publishers to offer their content free of paywalls. However, this battle is symbolic of the larger struggle between user privacy and advertising efforts.
MarTech will change in 2024, but more for advertisers than users
One important takeaway here is that users generally won’t notice much difference in their ads. There are robust methods to continue to provide personalized content, and they will still see ads relevant to their interests. Most of the big MarTech trends are focused on what’s going on underneath the hood and the way that those ads are able to reach a specific user.
One exception here will be an increased focus on privacy in messaging from brands. They will want users to be aware that their privacy concerns are being addressed, and this will hopefully reduce the risk of more people turning to ad blockers.
The key for most advertisers will be to avoid sticking their heads in the sand and work to adapt to 2024’s MarTech trends today. That’s where RTB House can help. We have been actively involved in efforts to build privacy-friendly cookieless alternatives from the beginning and have already implemented them into many of our offerings.
If you want to learn more about how you can go cookieless today and kick off the New Year with a bang, contact us.