From artificial intelligence to an ongoing M&A blitz to the Russian Methbot fraud ring, 2016 was certainly a newsworthy year for those in digital marketing. As we prepare for whatever new technologies or trends will come our way in 2017, let’s take a moment to reflect on the top programmatic headlines that defined the space in 2016.
The End of Header Bidding? Google Opens Up Dynamic Allocation to Outside Demand
Header bidding dominated programmatic headlines in early 2016, as more than half of publishers jumped on the bandwagon for an alternative to Google’s DoubleClick, according to a Digiday and Technorati report. Header bidding was the publishers’ way to get around Google’s seemingly biased setup. Then in April, Google answered the call and announced a change to its DoubleClick for Publishers ad server called DFP First Look. Recognizing the threat to its business model, Google was forced to change its bidding process by bringing in real-time bids of a publisher’s outside exchange partners to its dynamic allocation product. Despite the launch of First Look, the demand for a more open ad tech ecosystem continues to be strong enough that the battle between header bidding and Google is expected to wage on well into 2017.
Facebook Is Shutting Down Its Desktop-Based Ad Retargeting Exchange
The availability of Facebook’s display ad inventory via FBX in 2012 was expected to have a significant impact on the ad ecosystem. With Facebook controlling 25% of ad inventory at the time, according to comScore, it’s massive high-quality inventory pool bolstered the legitimacy of the real-time bidding (RTB) market. However, when Facebook shut down FBX permanently in 2016, it highlighted the significance of the shift in consumer social usage to mobile devices. It also signaled the strength of Facebook’s more developed built-in ad platforms, such as Dynamic Ads and Custom Audiences. Thus raising its walls even higher, Facebook has turned its attention to producing results from within its own platform.
ANA’s K2 Report: Evidence of ‘Pervasive’ Agency Rebate Collection
In June, the Association of National Advertisers (ANA) shocked the industry with a controversial report claiming that media agencies in the U.S. have been keeping rebates and kickbacks from media suppliers to shift business their way — with the ANA labeling the deception as “pervasive” among agencies. Backlash from the agency sector immediately called out the ANA’s blanket allegation as unfair and unverifiable since the ANA refused to share the identities of the companies in the report. Regardless, the programmatic headlines it made opened the door for clients and agencies in conference rooms across the U.S. to have more meaningful conversations on what success looks like for both sides of the relationship moving forward. In 2017, we can expect to see stronger client-agency partnerships as they begin to understand the possible results and limitations of an ad campaign from each other’s perspective.
Dentsu to Buy Majority Stake in Data Marketing Firm Merkle
Continuing the digital M&A trend started in 2015, the market saw significant consolidation last year as some of the world’s largest holding companies sought to round out their capabilities and add new digital revenue streams to their core business services. In a flurry of acquisition activity among programmatic headlines, Dentsu Aegis doubled down in the fall with its purchase of data marketing firm Merkle in August and trading desk Accordant in September. Despite the fact that we can expect to see more strategic partnerships emerge in 2017, the recent grab for digital firms begs the question, who’s left? And what’s the cost of losing one of the firm’s key differentiators — their independence?
Finally, An Ad Tech IPO! The Trade Desk Has Filed Documents to Go Public
A rising tide will raise all ships. That was the hope, at least, when The Trade Desk announced its plans for an initial public offering (IPO) in August. Like many successful IPOs, The Trade Desk brings a highly sustainable business model — in 2015, the company generated $113.8 million in revenue, up 155.5% year-on-year. According to Forbes, after The Trade Desk’s shares jumped more than 55% on its first morning as a public company, the industry has been cautiously optimistic that this could raise the bar for ad tech IPOs and encourage other firms to follow.
Adobe’s Acquisition of TubeMogul: An Ad Tech Consolidation Tipping Point
Keeping with the market consolidation theme of previous months, Adobe announced its plan to acquire video demand-side platform TubeMogul in November. The related programmatic headlines came on the heels of the Salesforce plan to acquire data management platform Krux in an effort to expand the company’s marketing and ad tech footprint. Acquisitions like these signify a unique shift happening in the marketplace, from segment- and demographic-based buying to more modern people-based marketing. Technology companies also want to compete from end to end, so buyers are looking to strategic partnerships like these to bridge the gap with fully-integrated solutions.
Russian ‘Methbot’ Fraud Steals $180 Million in Online Ads
Just days before closing out 2016, cybersecurity firm White Ops broke the news of a massive $1 billion-plus Russian botnet fraud ring, dubbed Methbot. According to White Ops, Methbot is a very advanced fraud operation on a scale no one’s seen before, stealing between $3 and $5 million a day from the online ad industry. In an attempt to coordinate an industrywide effort to stop Methbot, White Ops went public with over 4,110 compromised IP addresses, which advertisers and technology companies could subsequently block from their campaigns. Learn more about Goodway’s anti-fraud efforts to shut out Methbot here.
Alas, it was hard for us to narrow this list of programmatic headlines to just the top seven, as there were a vast number of lessons, products and insights shared in 2016. What are your most memorable moments from last year? Share with us through our social sites: Twitter, Facebook or LinkedIn.
Regardless of how 2016 netted out – as the good, the bad or the ugly year – it’s time to look ahead to 2017! Contact us to talk more about your campaign plans for the future and how we can help.
As an agency veteran, Megan has been fascinated by the efficiency and effectiveness of the programmatic revolution since Day 1. Creating and managing her first in-house trading desk early in her career was a source of inspiration that drives her to this day as a research manager at Goodway Group. She brings a unique and fresh share-first approach to programmatic media and digital strategy as part of her role to grow the knowledge base across Goodway and the entire digital media industry. If after nearly ten years in media she still claims her passion for programmatic, it’s clear she is doing something right.