Season 3, Episode 14: Where is the growth in digital advertising? (with Ari Paparo)
May 22, 2024
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Ari Paparo, a prominent entrepreneur in digital advertising, discusses the decline of the open web, benefits of closed-loop advertising systems, the future of third-party cookies, and Netflix's move into advertising. They explore challenges in digital advertising, the impact of major players like Facebook and Google, and Amazon's partnerships. Insights into the evolution of Google's focus on digital advertising and the changing landscape of online advertising.
The shift from open web to closed-loop advertising systems is reshaping digital advertising dynamics.
Netflix's move to develop its advertising platform signals a trend towards in-house solutions for tailored advertising approaches.
The future of third-party cookies in Chrome remains uncertain, posing challenges for Google in meeting regulatory requirements.
Deep dives
Google's Acquisition of DoubleClick: Sell and Buy Side Perspective
At the time of Google's acquisition of DoubleClick, the focus was primarily on optimizing sell side opportunities and leveraging the ad exchange for demand and optimization. The buy side was initially overlooked, but with the rise of DSPs like MediaMath and Invite Media, there was a shift towards realizing the buy side's significance. Google's subsequent acquisitions and growth positioned the buy side as a more influential engine for the company.
Netflix's Transition to a Proprietary Ad Platform
Netflix's decision to develop its own advertising platform, transitioning from exclusive partnerships to an in-house solution, was anticipated with the hiring of ad tech experts. The move aims to innovate with custom ad formats and enhance control over ad serving capabilities, aligning with Netflix's desire for tailored advertising approaches.
Future Predictions for Third-Party Cookies and Chrome
The future of third-party cookies and Chrome remains uncertain, with delays in deprecation raising fundamental concerns like the need for independent stewardship of cookies within the browser. Google faces challenges in meeting regulatory requirements, potentially leading to a reset in their roadmap or a shift away from cookies faster than anticipated.
Netflix's Expanded Partnership with Trade Desk and Google
Netflix's openness to collaborating with the Trade Desk and Google for ad buys on their platform signals a broader strategic move towards interoperability and increased accessibility for advertisers. Enabling third-party ad buying on Netflix opens up new advertising opportunities and promotes a more diversified ecosystem.
Anticipated Changes in the Digital Advertising Landscape
As Netflix ventures into developing its own advertising platform and fostering collaborative partnerships, the digital advertising landscape is poised for transformation. The evolving dynamics between media giants and ad tech platforms herald a shift towards innovation, enhanced control, and strategic expansion in the ad tech space.
My guest on this week’s episode of the Mobile Dev Memo podcast is Ari Paparo, a prominent entrepreneur and thought leader within the digital advertising ecosystem. The impetus of our conversation is a newsletter that he published several weeks ago for Marketecture in which he asked, Did it have to be this way?. From that piece:
"After reading this, you’re forgiven for thinking that the web is dead. Not dead yet, but certainly in decline. Media companies have pivoted to CTV. The NY Times makes more money from games than news. The advertisers are finding more of their customers on retail sites through Commerce Media. When you zoom out, these are all parts of the same story, but it could have maybe been different."
Ari and I discuss the history of and future prospects for the open web, including:
The benefits of closed-loop advertising systems over the open web;
Whether a fractured and stratified ecosystem of closed-loop walled gardens is a best-case scenario for digital advertising;
The notion of the “open internet”;
How the digital advertising ecosystem evolved differently than Ari would have expected at the time of Google’s acquisition of DoubleClick;
Netflix’s announcement that it will develop its own advertising platform;
What Ari predicts for the future of third-party cookies in Chrome.
Thanks to the sponsors of this week’s episode of the Mobile Dev Memo podcast: