The Cost of Integration Is Slowing Down First Party Data Progress
The vision of reaching millions of consumers wherever they are on the internet relies on an intricate net of connections that makes hundreds of disparate technology systems interoperable. To date, this interoperability has been built around the use of third-party cookies and data. As cookie deprecation forces the market to adopt first-party data as the primary currency, the need for interoperability is greater than at any point in ad tech's past.
The current infrastructure is not built to support the capabilities needed to handle massive amounts of first-party data in a privacy compliant way. Further complicating things is a lack of dedicated engineering resources to build and maintain the necessary connections.
A New Tech Layer
The constant evolution of digital media and advertising technology leaves advertisers, agencies and publishers constantly integrating new technologies or updating old solutions to adjust to the times. Privacy changes and signal loss have led to a new layer of platforms to maintain the infrastructure needed to buy and sell digital ads.
Customer data platforms (CDPs) and clean rooms are now critical tools for every brand and agency. In many cases, the CDP serves as the centralized platform that brands and publishers use to know their customers, build deeper profiles, and pull out the insights that allow them to communicate with customers on a deeper level.
These platforms need server-to-server connections to remain effective and transfer data in a privacy-safe way once cookies disappear. These kinds of connections should breed deeper connections between companies and teams, provided the different organizations can work together.
Downward Pressure
The big issue is one of sheer numbers. To remain relevant in the post-cookie, first-party-data-forward landscape, brands, and agencies need more and different technology solutions than what they deploy today, and all of those require the same server-to-server connections just described above.
Is the advertiser going to build these connections themselves? Probably not. That puts the pressure on the CDPs to build and maintain the connections that their clients need.
CDPs right now may maintain 300 (or more) connections with different platforms, tools, and data companies. A brand may need to string together between 30 and 40 of those connections to architect a solution that meets the requirements of its marketing and advertising strategies. Once cookie deprecation fully arrives, brands will likely need even more integrations. Each brand will have its own stack, which means that CDPs need to make additional server-to-server connections to address each brand client.
While everyone knows that these connections are critical, tech companies only have so many engineering hours they are willing to devote to integrations. Larger platforms have long lines of companies looking to integrate. Demand from big-spending advertisers can fast-track integration, but for the most part this is a long, slow process. Big companies will build these integrations, but it doesn't make sense for them to divert engineering resources to these integrations and away from core functionality and innovation.
Slowed Progress
The resource challenge has created a logjam, which is slowing down the industry's progress in preparing for life after cookies. Some technology companies have already made an effort to solve this issue on a smaller scale. Peer39's Contextual Data Marketplace helps smaller, unconventional data companies more easily integrate into DSPs, whereas those companies would likely endure long wait times within the leading DSPs' integration queues.
Yet the long lines for integrations with most platforms mean that the ecosystem hasn't yet migrated to the infrastructure necessary to support first-party data as a currency.
If engineers devote their time to an infinite number of integrations, then they aren't building new products or pushing things forward to help advertisers deliver in the new era. Progress is slowed and an industry that prides itself on innovation relies heavily on a handful of solutions, rather than exploring the cutting edge.
Integrations need to accelerate in 2023 in order to meet the coming cookie deprecation deadline. The faster and easier it is for digital media platforms to connect and get up and running, the better it is for the entire ecosystem.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Bob Walczak is the CEO of MadTech.