Post Cookie World: The Important Adtech Trends of 2023

On the one hand, gaming, streaming, and wearables are gold mines for advertisers. On the other hand, one of their most effective tools is about to disappear. And how are we preparing for the great comeback of contextual advertising? Main trends in the world of digital advertising and marketing, which is undergoing nothing less than a revolution

Guy Ronen

For those looking for a concise definition of what is currently happening in the digital advertising and marketing market, “the end of the world as we knew it” is not a bad option. Targeted advertising, which is based on age, gender, marital status, socioeconomic background, tastes, and browsing habits, is becoming less and less relevant – and the peak is still ahead of us. What alternatives do advertisers and publishers face? Here are some trends that are expected to stand out in the industry in 2023.

The swan song of cookies

It is difficult to overstate the magnitude of this event, which is largely changing the digital marketing practices of the past decade: the reliance on third-party data is a disappearing world. Whether due to regulatory constraints or due to public opinion, which is increasingly inclined to preserve privacy online, organizations will no longer be able to advertise in a targeted manner in the leading media. They will be forced to ask explicit permission from users for the type of information that can be collected and stored, and develop the “data muscle” on their own.

Apple’s Safari browser and Mozilla’s Firefox already do not support third-party cookies, and in 2023 Google’s Chrome is expected to play the swan song of cookies. Another dramatic push in this direction was Apple’s decision to change the tracking policy on iOS, so that every app is required to actively obtain users’ permission. Not surprisingly, 76% of them chose to prohibit the tracking of their browsing habits and personal data. Android, meanwhile, takes a more passive approach, where users can proactively request to opt out of monitoring, but the app is not required to ask for their approval in advance.

What can be done anyway? Apple offers advertisers access to SKAdNetwork, a tool that monitors activity in the app and shares the aggregated information without revealing details about a specific user or device. Google, for its part, launched FLoC (Federated Learning of Cohorts), a technology that brings together groups of users with common interests. This product was not well received, to say the least, and in January 2022 it was replaced by Topics, which relies on interests based on browsing in the past three weeks. It is still unclear how much this product will “catch up”, and whether regulators will see it as a sufficient response.

There is no doubt that cookieless solutions and data utilization capabilities in organizations are going to be among the largest investments of the period.

The comeback of context

The death of cookies will be the big comeback of contextual context as a leading tool, with Adtech tools that will perfect the ability to match content to relevant advertising. The Washington Post and the New York Times already rely on advanced technologies of this type, and it seems that other large publishers will soon join them.

The contextual advertising market is expected to grow to $ 335 billion by 2026. This includes machine learning (ML)-based engines that monitor metadata and can adjust viewing, listening or purchasing recommendations. The introduction of advertising on streaming platforms such as Netflix and Disney is expected to increase the need.

Another trend that is expected to grow is ads that lead directly to the product purchase page (Shoppable ads), whether from streaming platforms, social media, instant messaging programs and of course gaming – the gaming advertising market is estimated at $7.6 billion in 2022 and is expected to grow to $17.6 billion by the end of the decade. Here, it is particularly interesting to follow the development of retail media – the transformation of large e-commerce platforms such as Amazon, Walmart and Target into advertising channels in their own right.

Along with all of this, native advertising, which does not depend on collecting information about the user, is also expected to grow, as long as it is identified and does not disguise itself as editorial content.

AI, AR and IoT

Artificial intelligence applications surround us from all sides, and they are increasingly entering the world of digital marketing – especially in the era of post-cookies. Unique tools, which identify behavioral patterns and provide a corresponding forecast, are now able to optimize a campaign on a specific platform within seconds, with concrete recommendations for improving performance.

Another area that is gaining momentum in advertising is IoT products, wearables and smart equipment. Not only are they expanding the scope beyond the PC and smartphone, they also help brands collect first-party data on users, their preferences and needs, including on young users and targeted market segments. The Adtech market estimates that the IoT field, which is still in its infancy in these contexts, has great potential to be the next big thing.

The field of virtual reality (AR), in which overall investment is expected to grow by 30% in the next two years, is also expected to deepen its hold on the digital advertising market and make it more attractive and interactive. The innovation of recent times is the ability to do so not only in dedicated applications, but also from within browsers.

Advertisers’ Achilles’ heel

Traffic fraud is increasingly taking its place at the top of global organized crime. From the advertisers’ perspective, it reduces the desired clicks and dramatically increases the cost of the entire campaign. The challenge of identifying in real time who is a real surfer and who is a bot is enormous, and it is shared by advertisers and publishers. It is clear that AI technologies will also be integrated here, alongside advanced cyber protection practices.

Another weak point is Ad blockers. As far as is known, about 43% of all surfers use them, which significantly reduces CTR. The Acceptable Ads Committee (AAC) is working on a standard for ads, with an emphasis on native and identifiable advertising that will not be filtered through common ad blockers. This may be the solution to one of the most painful problems in the world of digital advertising, and there is no doubt that the issue will continue to accompany us well into 2023.