by Matt King
The Pumpt team is here to help emerging ad industry leaders stay on top of innovation, evolution, and growth in a rapidly changing ecosystem. In addition to sharing regular deep dives and career tips on our blog, we highlight notable stories from the worlds of digital media and online advertising each week. Here’s roundup #1 in our weekly series. Come back to the blog for more.
1. Social media giants are combating ad blockers
Background: Over the past year, a growing number of Internet users in the US and around the world have installed ad blocking software on their desktop computers, causing concern amongst online publishers, digital advertisers, and media agencies.
What’s new: In a recent company blog post, Facebook said that it will be reconfiguring the way that ads are loaded onto the desktop version of its site, making it harder for ad blockers to detect and defuse the modules.
Why it’s important: While Facebook’s announcement isn’t surprising—the vast majority of its revenue comes from advertising—the move presents a more aggressive strategy than companies like Google and Microsoft, which instead opted to pay popular ad blocking programs like AdBlock Plus to “whitelist” (or unblock) their ads.
2. There are over 98 different personal data points that Facebook uses to target ads for each user.
Background: As Facebook continues to develop and improve its in-feed advertising solution, many users have become familiar with the experience of encountering an ad that feels almost spookily accurate to them—whether regarding an upcoming birthday, recent vacation, or personal web browsing history.
What’s new: As part of a recent update to the social network’s ad preference settings, reporters identified over 98 different personal data points that Facebook uses to track, target, and deliver ads to users, including “Square footage of home,” “Users in long-distance relationships,” and “Types of vacations user tends to go on” (full list is available here).
Why it’s important: The revelation further stokes ongoing debates around Facebook’s hyper-targeted ads, which can be seen as convenient or creepy, depending on the context; this debate is being closely watched by other social and digital media companies who are looking to rival Facebook’s advertising offerings in the coming years.
3. VICE Media founder Shane Smith predicts extensive media consolidation in 2017 and beyond
Background: This year is shaping up to be an anxious one for many in the digital media industry: Facebook’s latest News Feed changes have lowered the amount of referral traffic going to publisher sites, speculation has circled about BuzzFeed’s slashed revenue forecasts, and funding for new digital media ventures has apparently dried up.
What’s new: While speaking at the Edinburgh International Television Festival, Vice co-founder and chief executive Shane Smith predicted that 2017 will bring massive consolidation—a.k.a. “a bloodbath”—to the digital media industry, with old-media companies like Viacom and Time Warner looking for ways to compensate for dwindling TV audiences, and new-media startups striving to secure new rounds of funding.
Why it’s important: If Smith’s prediction is valid, the industry may see a winner-take-all scenario play out, whereby a handful of well-positioned digital media companies—such as VICE—who offer a compelling story to investors and audiences will become more powerful and begin directly competing with existing cable behemoths.
4. Chinese investors purchase contextual advertising platform Media.net for $900 million USD in one of the largest ad-tech deals to date.
Background: Although the number of advertising technology companies has ballooned in recent years—from roughly 150 companies in 2011 to over 3,500 in 2016—the industry hasn’t seen a new initial public offering (IPO) since mid-2014, and many leading ad-tech startups are looking at acquisitions by larger companies as the most feasible “exit” strategy.
What’s new: In mid-2016, a consortium of Chinese investors acquired contextual advertising platform Media.net for $900 million USD, marking one of the largest ad-tech deals to date, and continuing a year-long trend of Chinese investment into the industry.
Why it’s important: Industry experts are predicting that Chinese interest in ad-tech is only beginning as overseas investors rapidly look for new places to invest their cash; there also exists a near-term arbitrage opportunity between the national markets, allowing public Chinese companies to realize an immediate profit on paper by incorporating undervalued US assets onto their balance sheet.
5. Dentsu Aegis CEO says that, “Eventually, everything will become programmatic,” after buying a programmatic technology firm.
Background: The term “programmatic” has become an oft-used phrase in ad-tech circles; it can describe a range of automated decision-making processes that determine how an ad unit is delivered on a webpage, but essentially “programmatic” refers to the development of machine-driven ad buying versus traditional human ad buyers and salespeople, claiming greater efficiency and performance for marketers.
What’s new: Global media group Dentsu Aegis purchased programmatic technology firm Accordant last week, and in a press interview, the group’s CEO Jerry Buhlmann said that he envisions the company becoming 100 percent programmatic by 2020.
Why it’s important: Interest in programmatic-related services will likely ramp up significantly in the coming year as Buhlmann’s prediction is in line with data from eMarketer, which reported that more than two-thirds of US digital display ad spending is already programmatic.
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