DMEXCO 2019 industry analysis: “Where are the advertisers?”

Impending regulation has pre-occupied Adtech

DMEXCO 2019 was a lot smaller than in previous years. Up until now it felt like the conference was expanding, but this year most of ad-tech could fit into hall six with plenty of space to move around (but still no seats).

The second thing you notice is that everyone seems preoccupied. The fever of deal-making seemed to be missing. There was no big announcements. No big partnerships. By the end of Day 1 conversation at beer time was referencing more mentions of ICO and CMA than would ever have been previously uttered in these halls. Recurring talk about the time being consumed by regulatory enquiries back home seemed profuse.

A lot of identity talk is amounting to very little

I also learned that the ad-tech industry has its head in the sand over the future of browser based identity and tracking. The topic of the conference was heavy on highlighting issues but very light on any material solutions. Which I think is where the problem lies. The browsers (including Google) have made it clear that tracking, as we know it in programmatic advertising terms, will be a thing of the past.

There is a real need to move the discussion on from finding ways of duping the browsers on cross domain tracking, to instead discussing how programmatic advertising will operate in a cookie-less world and how its effectiveness will be evaluated. Matt Brittin (Google) hinted at some of their thinking on micro-segmentation on stage with Emily Henderson.

It’s a pity that others aren’t having similar discussions.

This year’s DMEXCO opened as Apple announced details of its streaming platform, Apple Arcade – joining the likes of Google Stadia and Microsoft xCloud in the gaming arena. For marketers gaming has long been considered a niche audience – but the interest and investment from these digital giants dispels this myth. Gaming is mainstream and deserves the same attention from brands as other marketing channels.

In a discussion on this topic at the event, Twitch CRO Walter Jacobs presented a possible explanation: most marketing decision-makers don’t have gaming as a personal passion point. And I completely agree. But whether or not C-level marketers are gamers, deprioritising investment in gaming cuts brands off from a huge portion of their audience.

Marketers must now employ GenZ gamers and game viewers who understand the enormity and culture of gaming and its players, in order to capitalise on the huge opportunity to engage with an industry that’s larger than video and music combined – with 2.5 billion gamers worldwide.

DMEXCO 2019 has been underpinned by discussions around trust. And rightly so. It’s one of the biggest challenges for today’s marketers and advertisers. Consumers are savvier – and more sceptical – than ever before, faced with waves of personalised ads, some of which cross the line between helpful and hindrance.

In her keynote, Salesforce CMO Stephanie Buscemi quoted their recent Consumer Trust study: 54% of consumers believe companies don’t operate with their customers’ best interests in mind. That’s a marketer’s worst nightmare. And part of our role at the IAA UK is to ensure standards across the industry are conducive to gaining and retaining consumer trust.

To champion authenticity and transparency, and help brands foster deep relationships with customers that go beyond sales. After all, when consumers trust what companies are telling them or showing them, and the content they’re served is relevant and appropriate, their engagement is high and brands will reap the rewards.

In the early days DMEXCO was a niche gathering; an event celebrating the vibrant and relatively insular world of German ad tech. Word spread, more mainstream US ad tech noticed and the event grew as quickly and as erratically as digital advertising itself. In the last few years (I vote 2016), it peaked in ostentatious glory.

Wild parties, majestic stands and, above all, a sense that unchecked innovation was here to stay. Deals were being done. Advertisers wanted to be at the bleeding edge, VCs sensed plenty of safe bets, bankers saw consolidation amidst the chaos and recruiters knew two years was a good innings.

DMEXCO 2019 struck a more sober tone. The halls were quieter. Was it the 120 euro entry fee, as someone suggested? Perhaps a factor, but I doubt it. Talk has turned to the serious business of the task ahead. The health of the humble cookie – the thing that has been so instrumental in bringing us all to Cologne over the years, is deteriorating quickly. The ICO’s investigation and the more dramatic proclamations of privacy ultras dominated the agenda. You get the sense we’re at a fork in the road.

We need to rethink our business quickly, to devise a user-first and privacy-first world that supports a free information economy, or face a very uncertain future. For all the adblockers under a different guise, I’d suggest the right answer is going to be harder to find. That comes down to identity, the new battleground. As one ad tech CEO said “identity (the loss of it via the cookie) is the worst thing that ever happened to publishers”.

There’s some truth in that when you think how it commoditised context. We’re not going to turn the clock back on that overnight though. In 2019, as browsers are turning the internet’s lights off, we need to find a way to turn them back on whilst protecting the rights of the consumer, our most important constituent.

Of course, not all ad tech is reliant on the cookie and some actively campaign against it, however we can be certain that future DMEXCOs will be a lot smaller if we don’t unite to find a robust, privacy-first alternative. And, aside from a few last displays of cocky exuberance and excess, for the most part the down-to-business attitude as ad tech faces its first existential threat had the air of a quiet, mature confidence.

Listening in to the industry buzz at this year’s DMEXCO, one thread of conversation stood out from the noise: marketers are working under the cloud of the ‘cookie-pocalypse’. The industry is facing the challenges thrown up by a breaking measurement ecosystem, and finding a solution is priority number one.

With cookies becoming less effective in tracking audiences and walled gardens preventing measurement in some areas, marketers must find a way to future-proof their approach to measurement and become ‘anti-fragile’ – emerging in a potentially cookie-less world not just resilient, but stronger and more effective.

DMEXCO 2019 has become the meet up of adtech and adtech alone. Where are the advertisers? The CMOs? They are largely absent this year and this means that whilst DMEXCO still has its place as a must for networking, companies need to go into it with eyes open, knowing that they are investing in an event in which it is more fun and games, rather than deals and business.

This was my first visit to the annual digital marketing jamboree in Cologne and whilst I arrived feeling positive about the industry I was disappointed that the debate around trust and transparency didn’t seem to have moved on. A lot of vendors want us to talk about brand suitability rather than brand safety.

However, the recent GroupM research that revealed that more than 80% of the world’s advertising fraud originates in China, valuing the risk of global fraudulent advertising at $22.4 billion, shows that there is still a fundamental issue with opaqueness in this industry.

What was clear at DMEXCO – particularly given this year’s motto of “trust in you” – is that the ad tech industry has made great progress on trust, yet there is still room to get better. The topic might seem played out, but it’s evident programmatic is where all media wants to go, and we still have work to do to make that happen.

If DMEXCO demonstrated one thing, it reaffirmed technology leaders’ efforts to build an ecosystem rooted in consumer trust, with wider industry collaboration and a standard measure for transparency vital to the industry’s success.

Fortunately, increased data privacy regulations, along with a reduced dependency on cookies – another hot topic this year – can only guide the industry down a more transparent path; one that promotes openness and honesty, and fights fraud and mistrust.

If last year’s Dmexco saw the explosion of connected TV (CTV) and an introduction to its capabilities, this year’s event saw the conversation evolve towards how it can be best utilised. As digital video continues to gain momentum – now absorbing two-thirds of all online budget – there was a lot of talk among media companies about aligning both the buy and sell side of their business models to capitalise on video’s growth.

What was particularly interesting to see was the number of SSPs promoting their own OTT formats, pivoting towards CTV in order to diversify their offering and differentiate from competitors. However, what wasn’t clear – particularly on the buy side – was how they plan to adapt technically to the advertising requirements of this space. OTT is a different beast, and SSPs must be careful to adapt their custom features if they are to survive.

The bets on trust being one of the hottest talking points at DMEXCO this year weren’t wrong, as its motto ‘trust in you’ set the tone. It’s been an issue in marketing land for some time now but you know it’s a problem when it’s seeping into consumer perception.

Adobe recently finds 93% of UK consumers are worried brands are abusing their data. But, it’s not news to the industry experts. Salesforce CMO, Stephanie Buscemi, highlighted in her presentation The Trust Revolution in Marketing that customers are in the middle of a crisis and technology is at the heart.

What DMEXCO 2019 did bring to light was that the industry is trying to put its best foot forward to act on it, but of course there are obstacles. Questions were raised over cookies and personalisation, what adtech providers should and shouldn’t do, and whether walled gardens are the solution.

This year’s event was certainly quieter than previous years. Whether execs were at the event talking about trust, or instead decided to put their time and money into fixing it, the industry needs to pull together so that marketers have more faith and consumers can be confident in sharing their data.