Who Wants to Play in Google’s Privacy Sandbox?

Who Wants to Play in Google’s Privacy Sandbox?

Google

On March 31, Google shared an update on a number of consumer privacy initiatives under way as part of its Sandbox initiative. And advertisers are not completely onboard.

What Google Announced

Before we get to Google’s March 31 announcement, let’s set the stage with a bit of context. Back in January 2020, Google upended the advertising world by saying that the company was planning to phase out support for third-party cookie tracking on Chrome. Cookies are online trackers that websites place on people’s web browsers when they visit sites. Without them,  businesses have a harder time serving targeted ads based on people’s interests, and it is more difficult to track the effectiveness of ads. But privacy advocates have long contested that cookie tracking increases the risk for people being tracked when they don’t want to be tracked. So, Google has been developing ways that make it possible for advertisers to create targeted ads without tracking people across the Web via cookies.

Google set a timetable for phasing out third-party cookies: at some point in 2023. This acts as a deadline for Google to provide advertisers an alternative to third-party cookie tracking. And Google is under a lot of pressure to do so given all the money the company makes from advertising.

Since then, Google has been slowly announcing the development of alternatives to cookie tracking, all being developed in the Privacy Sandbox. This is an initiative that aims to create technologies that both protect people’s privacy online and give companies and developers tools to build digital businesses. The Privacy Sandbox reduces cross-site and cross-app tracking while helping to keep online content and services free for all.

On March 31, Google said that it is making progress in rolling out some alternatives to the use of third-party cookies to serve up advertising on the Google Chrome browser. They include, most notably, the launch of tests for Topics.

What Is Topics?

Topics is a technology will track people on Chrome and assign them a set of advertising categories (such as travel or fitness) based on the sites they visit. When a person goes to a site with ads, Google will share three of those topics with advertisers on the site. This will allow the advertiser to show them to show a relevant ad.

That is the theory, at least. No one knows how the reality will pan out.

Topics sounds like cookie tracking, but it isn’t. It’s actually a software platform that publishers and ad tech providers will plug into in order to help target ads when people visit their sites through the Chrome browser. After Topics is enabled, the technology will track people on Chrome and assign them a set of advertising categories (such as travel or fitness) based on the sites they visit. When a person goes to a site with ads, Google will share three of those topics with advertisers on the site, which will allow the advertise to show them to show a relevant ad.

Topics are kept for only three weeks and old topics are deleted. Topics are selected entirely on a user’s device without involving any external servers, including Google servers.

In its March 31 announcement, Google said Chrome users will be able to opt out of the tests of Topics through their settings. In Europe, consumers have to opt in to enable the tests. As Google noted, participants “will be able to see and manage the interests associated with them, or turn off the trials altogether.”

So far, the ad tech industry has raised questions about how Google is proceeding with Topics. For instance:

  • There is worry that the need to opt into Topics in Europe will be a roadblock.
  • Others have complained that Google is attempting to use consumer privacy to exert its own influence over the ad tech industry.
  • There remains an open question as to whether Topics will even work.

Advertisers and technology firms raised objections when Google launched the predecessor to Topics, an open source program known as FLoC. FLoC was supposed to make it possible for businesses to group people based on their common browsing behavior instead of using third-party cookies. But FLoC caught plenty of flak from consumer privacy advocates who believed Google was overplaying its hand, as well as advertisers and agencies who accused Google of strong-arming them into playing by Google’s own rules. As one executive put it, FLoC was “a half baked idea.” It is an open question as to whether Topics will be an improvement.

What Advertisers Should Do

  • Work with your advertising agency to understand what’s happening and how you may be affected. That’s exactly what our clients are doing with True Interactive. That’s what we’re here for.
  • If you are succeeding with Google Ads, stay the course. Google is enduring an imperfect transition right now toward a privacy-world. But Google Ads? They’re not going away. Far from it – Google Ads are alive and well based on our experiences helping clients succeed with them.
  • Do invest in ways to leverage your own (first-party) customer data to create personalized ads as Google continues its assault on third-party cookies. We can help you do that.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which, as noted above, give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by Markus Spiske on Unsplash

Google’s Android Privacy Sandbox: Advertiser Q&A

Google’s Android Privacy Sandbox: Advertiser Q&A

Google

Google recently announced that the company will enact a new consumer privacy measure that will affect users of Android devices. Let’s take a closer look at what Google announced and why the news matters to advertisers.

What did Google announce?

Google said the company will limit the sharing of data on smartphones running its Android software. According to a blog post, “Specifically, these solutions will limit sharing of user data with third parties and operate without cross-app identifiers, including advertising ID. We’re also exploring technologies that reduce the potential for covert data collection, including safer ways for apps to integrate with advertising SDKs.”

What does Google’s announcement mean?

The announcement means that Google will make it harder for advertisers to track user behavior as they use Android devices to browse different sites. Advertisers know whether users clicked on an ad or bought a product when they browse the web because of the Advertising ID tracking feature. Google will eliminate identifiers used in advertising on Android for everyone, and this includes Google, too. By the way, Google has already allowed users to opt out of personalized ads by removing the tracking identifier.

Didn’t Apple just launch something similar to what Google is doing?

Indeed, in 2021, Apple launched a privacy control known as Application Tracking Transparency (ATT). This requires apps to get the user’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers. This move, done with little advance notice, curtailed the ability for advertisers and ad platforms such as Facebook to target digital ads across the web. Facebook in particular has struggled to figure out how to come up with an effective antidote to ATT. The company recently suffered a momentous drop in its market capitalization partly because of its difficulties adapting to life post-ATT.

Won’t Google’s Android Privacy Sandbox Hurt Google?

Not likely. Google has a huge advertising business to protect. The company is not going to simply remove ad targeting without coming up with another way to track user behavior. In fact, Google is developing alternative tools in its Privacy Sandbox to help businesses serve up targeted content in a more privacy-conscious way. They include:

  • Fledge, for remarketing new ads.
  • Attribution reports, for telling advertisers which ads work without compromising consumer privacy.

Google will probably have even more control over data than it ever has. And it will protect the first-party data it collects through Google Search, the Google Knowledge Panel, and YouTube.

When will the Android Privacy Sandbox Take Effect?

Not for at least two years. Google makes so much money from advertising that the company is going to work very closely and slowly with advertisers to introduce a privacy control without rocking the boat. Google told The New York Times, ​​“We realize that other platforms have taken a different approach to ads privacy, bluntly restricting existing technologies used by developers and advertisers. We believe that — without first providing a privacy-preserving alternative path — such approaches can be ineffective and lead to worse outcomes for user privacy and developer businesses.” And just in case you didn’t get the point, Google’s post hyperlinked to an article about Application Tracking Transparency.

Why is Google even doing this at all? Why not keep things the way they are?

Google is getting out in front of regulators and responding to public sentiment. The Big Tech companies are under increased scrutiny for the amount of data they collect about people, and Google probably more so than others because of how popular Google Search is. Legislators around the world are leaning on Big Tech to become more privacy conscious. Google is making changes on its own terms before those changes are dictated to Google.

What should advertisers do?

  • Do your homework. Stay on top of developments by following Google’s public blog posts.
  • Work with your advertising agency to understand what’s happening and how you may be affected. That’s exactly what our clients are doing with True Interactive. That’s what we’re here for.
  • If you are succeeding with Google Ads, stay the course. Google is enduring an imperfect transition right now toward a privacy-world, but as noted, Google is going to protect its turf.
  • Do invest in ways to leverage your own (first-party) customer data to create personalized ads. That’s because it’s clear that between Apple and Google, third-party data tracking is going to become less effective. We can help you do that.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by Kai Wenzel on Unsplash

True Interactive Named a 2022 Google Premier Partner

True Interactive Named a 2022 Google Premier Partner

Google

You might have noticed that we blog about Google a lot. There are good reasons for that, starting with Google’s enormous influence on the advertising industry. Not only is Google the largest platform for online advertising in the world, but the company also shapes the direction of the industry. We also discuss Google because we work closely with the company. We’re a partner. We advocate on behalf of our clients to maximize the value of their ad spend on Google, and doing that gives us deep knowledge of Google – which we share with our readers on our blog.

And I’m proud to say that our partnership has been recognized by Google. Google just informed us that True Interactive has been recognized as a 2022 Premier Partner and for being in the top 3 percent of the company’s partners. (Being included the top 3 percent depends on a number of factors such as client growth, client retention, product diversification, and annual ads spend.)

What does being a Premier Partner do for us? Our clients? The marketplace at large? Well, we enjoy a number of benefits that will make us a stronger advocate for our client, such as:

  • Product betas: ongoing access to the most current product betas through quarterly, summarized reports.
  • Insights briefings: the latest insights from Google each month to stay ahead of changing consumer behaviors and industry trends.
  • Advanced Google Ads support: 24-hour advanced ads support to help us quickly and efficiently resolve clients’ issues.
  • Executive experiences: invite-only industry events, such as roundtable discussions with Google leaders, sessions with other Premier Partners, and opportunities to hear from industry thought leaders.

And more!

All this means we’ll not only be a stronger client advocate, but also a better thought leader. The knowledge we’ll accumulate through our closer partnership with Google will certainly enrich the ideas we share with the marketplace.

We are honored to be Premier Partner. Thank you to our Google, our clients, and to the incredibly talented team at True Interactive that turns insights from Google into a better experience for our clients.

Contact True Interactive

We help our clients succeed with online advertising. Learn more about our services here and our work here. And contact us to learn how we can help you.

How Google Is Growing Its E-Commerce Advertising Business

How Google Is Growing Its E-Commerce Advertising Business

Google

We all know e-commerce has exploded over the past 24 months. Google knows all too well. The surge in e-commerce was a boon to rival Amazon in terms of search traffic and revenue gained. But as we’ve reported, Google has also been working hard to fight back by becoming a stronger e-commerce player.  And it looks like Google is gaining ground, as a newly published report from Morgan Stanley suggests.

Morgan Stanley says that in November 2021, 57 percent of shoppers first went to Google platforms (including Search and YouTube) to research a new product, up from 54% in May 2021. In addition, the number of Amazon Prime subscribers turning to Google for initial searches increased to 56 percent from 51 percent in the same period.

This is good news for Google, whose core advertising business has been losing market share to Amazon Advertising. Google needs to keep eyeballs on Google in order to attract and keep advertisers. And people searching with intent to buy are incredibly valuable. Morgan Stanley predicts that Google will achieve 37 percent year-over-year e-comm/retail ad spend for fiscal 2021.

It’s interesting to note that according to online selling platform Jungle Scout, 74 percent of U.S. consumers begin their product searches on the Amazon.com site in 2021. It’s impossible to do an apples-to-apples comparison with Morgan Stanley’s numbers because Morgan Stanley counts YouTube searches, and Jungle Scout does not. This is a significant difference because YouTube is the second-most popular search site in the world next to Google Search.

That said, the numbers matter.

Morgan Stanley listed several examples of how Google has developed more e-commerce related features in 2021 alone:

Google e-commeerce

These examples stand out for us:

  • Making online searching and shopping more visually appealing by emulating the product display features you see on Amazon. For certain items such as apparel, Google will return search results with a product results that page that resembles a visual store, not a list of links and text descriptions.
  • Soon introducing a new way to search visually, with the ability to ask questions about what you see. According to a Google blog post, “With this new capability, you can tap on the Lens icon when you’re looking at a picture of a shirt, and ask Google to find you the same pattern — but on another article of clothing, like socks. This helps when you’re looking for something that might be difficult to describe accurately with words alone. You could type ‘white floral Victorian socks,’ but you might not find the exact pattern you’re looking for. By combining images and text into a single query, we’re making it easier to search visually and express your questions in more natural ways.”
  • Including in search a feature, “Things to know,” that will make it easier to explore and understand new topics. For example, if a person searches for “acrylic painting,” Google understands how people typically explore this topic, and shows the aspects people are likely to look at first though “Things to know.” Google says it can identify more than 350 topics related to acrylic painting in this example.

These advances are typically fueled by artificial intelligence applications such as multitask uniform model, an algorithm designed to provide answers to complex queries by concurrently assessing information across multi-language text, images, video and audio.

The next milestone: Google’s parent Alphabet reports fiscal 2021 earnings on February 1. Let’s see how well Google’s ad revenues look.

What Advertisers Should Do

  • Capitalize on Google’s advertising tools that are designed to be more visually appealing. For instance, Google recently rolled out Discovery ads, which are image-rich ads designed for a more “laid back” search experience (more about that here). Google is clearly doubling down on the visual web, and advertisers should expect more visually appealing ad products as it attempts to become a stronger e-commerce player.
  • Make use of more tools that make it easier to connect online searching and shopping. Google isn’t the only company figuring out search and commerce. Instagram is another, as we discussed in a blog post recently. And there are many more apps doing the same thing.
  • Do a gut-check with your organic search team. How well are they aligning content with visual search, for example? How will Google’s “Things to know” feature affect the depth and breadth of content that you provide on your website, Google My Business listing, and elsewhere?
  • Keep your eyes open and your budgets flexible. The online advertising space is getting more competitive and interesting for retailers. We have been blogging about the rise of Amazon Advertingfor some time – as well as the growth of advertising services from retailers such as Macy’sWalmart, and Walgreens. They’re all using their first-party customer data to build online advertising platforms. Depending on your target audiences, they may provide very competitive alternative to Google – an example being Macy’s for fashion-conscious shoppers or Walmart for advertisers whose audience aligns with Walmart’s multi-channel customer. (And we can help you succeed on all these platforms.)

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Image source: https://pixabay.com/photos/eye-google-detail-macro-face-1686932/

Why Google Launched Topics, and What Advertisers Should Do

Why Google Launched Topics, and What Advertisers Should Do

Google

Google’s FLoC didn’t float. Will Topics fly?

On January 25, Google said it is killing FLoC (Federated Learning of Cohorts), which was Google’s alternative to targeting consumers with cookies based on third-party ads on Google’s Chrome browser. Instead, Google is introducing a new alternative, Topics. Topics is the latest twist in Google’s attempt to gain a competitive edge through consumer privacy.

Understanding the news requires a bit of a refresher on Google’s journey with privacy. So, here goes:

  • January 2020: Google said it would phase out support for third-party cookies on Google Chrome, which is the most popular browser in the world. Advertisers rely on third-party cookies to track user behavior across the web in order to serve up personalized ads. Google said it wanted to make the web more private. Google said it would work with advertisers to create alternatives to third-party cookies through its Privacy Sandbox Google later delayed its plans to 2023 in the face of pressure from U.K. regulators.
  • January 2021: Google announced it was developing an open-source program that would ease the pain of businesses eventually losing access to third-party cookies. This open-source program was known as FLoC. FLoC was supposed to make it possible for businesses to group people based on their common browsing behavior instead of using third-party cookies.
  • March 2021: Google doubled down on its campaign against cookies. Google said that once third-party cookies were phased out of Chrome browsers, Google would not build alternative identifiers to track individuals as they browse across the web, nor would Google use them in its products. Examples of those alternative identifiers include Unified ID and LiveRamp IdentityLink. Instead, Google pushed advertisers to – you guessed it — adopt FLoC.

But FLoC caught plenty of flak from consumer privacy advocates who believed Google was overplaying its hand, as well as advertisers and agencies who accused Google of strong-arming them into playing by Google’s own rules. Now, Google is returning with an alternative the company hopes will be more acceptable: Topics.

Topics will track people on Chrome and assign them a set of advertising categories (such as travel or fitness) based on the sites they visit. When a person goes to a site with ads, Google will share three of those topics with advertisers on the site, which will allow the advertise to show them to show a relevant ad.

 

In a blog post, Google said, “Topics are kept for only three weeks and old topics are deleted. Topics are selected entirely on your device without involving any external servers, including Google servers. When you visit a participating site, Topics picks just three topics, one topic from each of the past three weeks, to share with the site and its advertising partners. Topics enables browsers to give you meaningful transparency and control over this data, and in Chrome, we’re building user controls that let you see the topics, remove any you don’t like or disable the feature completely.”

Topics

Google will launch a developer trial of Topics in Chrome that includes user controls, and enables website developers and the ads industry to try it out. The final design of the user controls and the other various technical aspects of how Topics works will be decided based on feedback and what Google learns in the trial.

Meanwhile, Google is feeling the heat from the rise of retailer-operated ad networks such as Amazon Advertising and Walmart Connect. These networks leverage their own first-party customer data to sell ad units. Advertisers, sensing the demise of targeting based on third-party cookies (from Google and Apple as well), are increasingly working with ad networks whose first-party data is beyond the reach of Google. And retailer-based networks give advertisers access to consumers who share the same interests and habits.

What Advertisers Should Do

  • Do your homework. Stay on top of Topics by following Google’s public blog posts and explainers (such as this one and this one).
  • Work with your advertising agency to understand what’s happening and how you may be affected. That’s exactly what our clients are doing with True Interactive. That’s what we’re here for.
  • If you are succeeding with Google Ads, stay the course. Google is enduring an imperfect transition right now toward a privacy-world. But Google Ads? They’re not going away. Far from it – Google Ads are alive and well based on our experiences helping clients succeed with them.
  • Do invest in ways to leverage your own (first-party) customer data to create personalized ads. We can help you do that.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which, as noted above, give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

2022 Advertising and Marketing Predictions

2022 Advertising and Marketing Predictions

Advertising

Welcome to a new, adventurous year of advertising and marketing. The traditional tech giants are going to continue to fight each other for dominance – while TikTok will tap into the burgeoning creator economy to challenge them all for a slice of the advertising pie. Retailers everywhere are creating ad networks, but Amazon and Walmart have already established strong leadership early on. For the most part, businesses will be spending more – more on TikTok, more on Amazon, more on Google, and probably more on Apple’s fledgling ad business. But will they spend more on Meta? Read on for our insights into the year ahead.

Retailer Media Networks Proliferate – and Meta Loses Ground

One of the big stories of 2021 was the proliferation of media businesses operated by retailers such as Amazon, Macy’s, Target, and Walmart. In 2022, we’ll see more of them. Retailers are under great pressure to squeeze more margin out of their core businesses as the industry endures uncertainty. The most well established networks – Amazon and Walmart – are thriving because they tap into the data they collect about their customers (first-party data) to sell targeted advertising on their sites. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site, too, as an antidote to Apple’s privacy controls. In addition, non-retailers with large troves of first-party data, such as TikTok, will expand the same way.

I also believe Meta’s ongoing push into immersive reality will lose momentum. Meta has made an even bigger push into immersive reality (e.g., virtual reality and augmented reality) as part of its attempt to become the builder of the metaverse. Meta also intends for immersive reality to help the company maintain a dominant hold on social media and to squeeze upstarts such as Roblox out of the market. But the horse is already out of the barn: there are just too many players such as Roblox and Snapchat developing immersive reality applications for Meta to play copycat and use its size as an an advantage. And Meta has faced so much public blowback over its size and reach that squeezing out smaller players makes Meta more of a target for anti-trust regulation. Meta will lose ground, and gaming platforms such as Roblox will ascend in power.

— Tim Colucci, vice president, digital marketing

TikTok Dominates

TikTok is the world’s most visited site in the Internet in 2021, toppling Google, according to Cloudfare. TikTok will become the leader in paid social. Videos and fast-breaking cultural trends are becoming more prominent factors across all social media marketing, and TikTok has mastered both. Oh, and TikTok has another big trump card to play: the site is a magnet for Gen Z and Millennials, who together comprise about 42 percent of the U.S. population. As a recent New York Times profile noted, advertisers “are present like never before, their authentic-seeming advertisements dropped in between dances, confessionals, comedy routines and makeovers.” But TikTok is just beginning to monetize all that interest from advertisers. TikTok will follow the example set by Amazon Advertising and roll out more ad units that capitalize on the customer data the company is collecting. And look to TikTok to become a social commerce giant. If you thought 2021 was the year of TikTok, you ain’t seen nothing yet.

— Bella Schneider, digital marketing manager

The Creator Economy Gets Real

The creator economy refers to a class of businesses comprising millions of independent content creators and influencers. We are reading more about them partly because apps such as TikTok have given them more power and influence. The creator economy will become even more powerful. That’s because collaboration networks are proliferating. These networks give creators an all-in-one platform to create communities and build influence. In addition, gaming sites such as Roblox and Twitch offer creators opportunities to monetize their work with potential partnerships with brands, and crypto currency sites such as Rally.io make it possible for creators to mint their own currency. The big social networks such as Meta are responding by making themselves more attractive to creators. More businesses will tap into niche networks to partner with emerging creators who are lesser-known but possess tremendous street cred. Big-name partnerships with stars will still thrive, but the social media icons will need to make room for the new kids in town.

— Mark Smith, co-founder

Tech Titans Roar

We hear a lot about the big technology firms facing increased scrutiny from Congress and legislators around the world. But to me the more intriguing story is how the tech titans keep trying to outmuscle each other for advertising revenue, an example being Apple enacting privacy controls to hurt Facebook’s ad business. 2022 will ratchet up the fight:

  • Apple will start leveraging and monetizing the data they are collecting (and not allowing others to collect) in the form of some type of advertising platform. This is the culmination of Apple’s stricter privacy controls.
  • Google will remove more visibility and targeting options in the name of advances in machine learning and automation, thus protecting its core ad business by taking more control of it.
  • An increasing number of platforms will emerge that use first-party data to target and track and savvy advertisers will take advantage of this and diversify their advertising spend
  • Amazon will grow with even more ad units for Amazon Advertising and marketing offerings such as livestreamed commerce for businesses of all size, especially smaller ones. Google and Meta will lose market share.

Unfortunately, we can count on CPCs to rise across all platforms as they attract more businesses competing for ad inventory and keywords. It’s going to be a more expensive 2022, but also a more interesting one with more ad units proliferating.

— Kurt Anagnostopoulos, co-founder

Google Ads Become More Powerful

Given the evolution of keyword matching (now AI-powered to serve ads based on the meaning of a search query), and the simplification of the ad product offerings (as Google deprecating Expanded Text Ads next summer), we will see Google Ads become leaner but more powerful. Advertisers will be forced to rely more and more on Google’s algorithm to drive results – all this, at the expense of reduced control advertisers have over campaign settings (ad content, keyword matching, targeting choices, etc.). I believe the biggest changes will continue to happen on Google’s back end as it seeks to make the algorithm (automated bidding strategies used in ad campaigns) smarter. Thus, we will see increased focus on cookie-less conversion tracking and an expansion of first-party data collection capabilities in Google Ads (i.e., scaling up enhanced conversions).

— Héctor Ariza, digital marketing and analytics manager

Social Media Ad Dollars Get Redistributed

Lush Cosmetics recently said it is quitting Facebook, Instagram, Snapchat, and TikTok over concerns that those platforms have a negative impact on teens’ mental health. (The company will remain active on LinkedIn, Pinterest, Twitter, and YouTube.) Lush said it will happily lose $13 million in sales because of the digital detox. It remains to be seen whether Lush will reactivate the accounts it quit (Lush quit some social sites in 2019 before returning), and of course a big question is whether more businesses will take such a drastic approach. I don’t think we’ll see more businesses take the Lush approach – social media is just too important – but they will shift some of their ad dollars away from Facebook and Instagram. In the past, businesses have remained loyal to Facebook (now known as Meta) because the site is critical to their advertising and marketing strategies. But the whistleblowing activities of ex-Meta employee Frances Haugen have raised the stakes. She asserted that Meta has kept internal research secret for two years that suggests its Instagram app makes body image issues worse for teenage girls. Businesses will monitor what their customers, investors, and employees say about Meta especially in this era of purpose-driven branding. Some will shift their advertising to Snapchat and TikTok while Meta takes the heat for brand safety issues. But this shift may be temporary. Meta will probably mollify brands with some updates to its products to create more brand safety, as it is already doing with its news feed to address concerns over lack of user control over their news feeds. In addition, Meta faces the ongoing threat of regulatory oversight. More accountability will come to Meta in 2022.

— Beth Bauch, director, digital marketing

Contact True Interactive

To succeed in the ever-changing world of online advertising, contact True Interactive. Read about some of our client work here.

Image source: https://pixabay.com/photos/year-2022-track-new-year-calendar-6786741/

 

Why Retailers Are Launching Ad Businesses

Why Retailers Are Launching Ad Businesses

Advertising

Best Buy recently announced the launch of Best Buy Ads, a new in-house media company. Best Buy Ads offer a range of ad units including paid search ads, onsite and offsite display ads, onsite and offsite video ads, social ads, and in-store ads. According to Best Buy, Best Buy Ads capitalizes on the fact that Best Buy interacts with its customers three billion times a year. From those interactions, Best Buy learns about the search and shopping habits of its customers. This makes it possible for the retailer to sell ad units that target a specific demographic: people with a strong interest in consumer technology.

Best Buy is the latest retailer to launch an ad business. Other examples include:

  • Walmart Connect, the leading ad business run by a brick-and-mortar retailer.

As with Best Buy, they offer services ranging from display to media buying. They all have one thing in common: they monetize their customer data.

Why an Ad Business Appeals to a Retailer Like Best Buy

An online advertising business is appealing to Best Buy for a number of reasons, including:

  • This is a proven model. The growth of Amazon Advertising (Amazon’s own in-house ad operation) speaks for itself. Amazon Advertising is so successful that Amazon is now challenging Google’s and Facebook’s dominance of online advertising. In light of this, we’ve witnessed a slew of retailers jumping into the ad business. For example, Walmart Connect (Walmart’s ad operation) has enjoyed strong growth.
  • Customer data is a competitive weapon. Retailers such as Best Buy collect a treasure trove of data about their customers, starting with their search and shopping preferences. This data gives each retailer an edge because they can promise advertisers access to a targeted audience with intent to buy. As noted, Best Buy targets consumers in the market for home electronics. By contrast, the recently launched ad platform from retailer Macy’s targets a fashion-conscious consumer. Walmart promises entrée to grocery shoppers and price-conscious consumers. Of course, retailers must know how to mine all this data and then develop attractive ad units. But the data provides a built-in advantage.
  • Retailers’ customer data is getting more attractive to advertisers. Businesses are looking for alternative ways to reach consumers amid the demise of third-party cookies, which are crucial for third-party ad targeting, and the advent of stricter consumer privacy controls on Apple’s iOS, which has also made it harder for businesses to target consumers with ads. With third-party ad targeting across the web threatened, platforms that give advertisers entree to shoppers within retailers’ walled gardens are more appealing. Basically, retailers are using their own customer data to do what Apple and Google won’t do for advertisers anymore.
  • e-Commerce is booming. Online ad businesses in particular are catching fire because of the e-commerce boom. According to S&P Global Market Intelligence, “The e-commerce industry is expected to hold on to pandemic-elevated sales into 2022, with big retailers including Amazon.com Inc. and Walmart Inc set to benefit as consumers stick to new, hybrid shopping patterns.” S&P Global Market Intelligence says U.S. e-commerce sales are on track to exceed $1 trillion for the first time in 2022. Businesses want to reach those shoppers, which creates a demand for online advertising. The surge in online commerce also means more people are using retailers’ sites to search and shop, which creates more valuable customer data that retailers’ ad businesses can monetize. This also means advertising.

What Advertisers Should Do

  • Consider retailer-based ad networks as a complement to your existing digital ad strategy, not as a replacement. If your strategy focuses on Facebook and Google, for instance, don’t move your ad dollars over to a retailer network. Remember that Facebook and Google also already offer proven advertising products that capitalize on their vast user base. For example, location-based digital advertising tools help strengthen Google’s advertising services at the local level.
  • Do, however, monitor the effectiveness of your advertising on Facebook and Google amid the demise of third-party cookies and the onset of Apple’s App Tracking Transparency, which includes more privacy controls that may make Facebook ads less effective (which remains to be seen).
  • Work with an agency partner that knows the terrain. For instance, at True Interactive, we complement our history of helping businesses advertising on Google and social media with expertise across retailer ad networks such as Amazon and Walmart.
  • Learn more about the ad products that might apply to you – and those products are evolving. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site – meaning advertising across the web, as well as via connected TV.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

For More Insight

Walgreens Doubles Down on Its Advertising Business,” Tim Colucci, May 19, 2021.

Amazon Unveils New Ad Units Across Its Ecosystem,” Kurt Anagnostopoulos, May 4, 2021.

Why Macy’s Launched an Advertising Platform,” Tim Colucci, March 3, 2021.

Walmart Asserts Its Leadership in Advertising,” Tim Colucci, February 8, 2021.