The driving engine of the e-commerce boom has been the shift to digital advertising. The underlying technology has revolutionized the industry and is the foundation of the Big Tech behemoths like Amazon, Google and Facebook. Martijn van den Bemd of Adcore joins Mike to explore opportunities for Canadian investors going forward.
The digital revolution has transformed the advertising industry beyond recognition, and advertising is the driving engine of the boom in e-commerce. Right after this week’s show at 10:05am pacific time, Adcore CEO Omri Brill and GM Martijn van den Bemd present the latest innovations and highlights, and discuss the future of e-commerce. And most importantly, show how investors can benefit in the short and long term. CLICK HERE to register and watch.
Many people from different sectors have been approaching me lately and raising concerns about the recent privacy changes led by Apple and Google.
To sum it up in one word: “PANIC”, and in two words: “DON’T PANIC”. As always with change, there will be those who are impacted more and those who will be impacted less. As long as your business is prepared for the change, you should be fine.
For those of you not in our industry, Apple’s iOS 14.5, announced by Apple on its virtual WWDC in June 2020, presented a new App Tracking Transparency (ATT) policy requiring developers to ask for permission when they collect certain information (known as IDFA) from other companies’ apps and websites for advertising purposes.
This means advertisers will no longer be able to deliver personalized ads and track the effectiveness of their ad campaigns without users’ consent.
Google has taken it one step further, announcing on Jan 27, 2021 that they will stop measuring IDFA altogether.
These changes come in the midst of the precedents set by recent online privacy legislation like California’s CCPA and Europe’s GDPR, probably as an attempt to prevent additional government regulation.
For the average person, the end of the pixel tracking era may sound like the end of user data based marketing, but if you read between the lines, the implications for advertisers are limited for specific industries and probably for a limited time, until new methods of data collection and analysis will be widely implemented.
Who will be the winners and losers from this tectonic change:
- We expect Facebook Ad campaigns’ performance to decline, at least temporarily, due to the limited effectiveness of personalized advertising and the limited reporting of results moving forward. That being said, Facebook is making several changes to comply with iOS 14, so we expect numbers to bounce back in the near future.
- As a result, we expect advertisers to allocate more budgets towards Google, which seems to have suffered less from these changes, thanks to its ability to collect user data in other ways and to the wide reach of its own networks: Android, YouTube, Google Search, Analytics, Google Play and more.
Thanks to a more diversified ad network and less reliance on mobile ad revenue, Google isn’t as directly impacted by the new iOS policies and might even earn from Facebook’s loss.
- While Google Search ad campaigns’ performance will probably not be affected, we expect interest-based targeting campaigns (Display, Discovery, YouTube) will experience a decline in performance due to the data lost. These types of campaigns are usually associated more with upper-funnel marketing, such as branding and awareness activities.
- Industries that rely heavily on IDFA, such as Gaming, gambling, and other App-related industries, will be impacted the most, especially those who target iOS apps and users.
Despite the present somewhat gloomy outlook for digital marketers, the future still seems bright:
- Initial data post the iOS 14 release indicates that over 70% of users are accepting data sharing. These stats are also supported by a study showing that 83% of consumers are willing to share their data if it means they’ll get a more personalized experience.
- The major online media networks have already taken actions to better ensure their users’ data privacy, allowing them to collect data and hopefully avoid any future issues from a user privacy perspective or further government regulation.
- We believe that privacy related legislation will not continue to be a major concern since public’s concerns around privacy are declining, according to GWI.
As for Adcore and our clients, we see these changes as a growth opportunity for our business. Our technologies are geared towards e-commerce and by such revolve more around Google Search and Shopping, which probably will not be affected significantly. If any, Adcore’s fast reaction to this change provides us and our clients with a competitive advantage.
Omri Brill, CEO of Adcore is a computer scientist, industrial engineer and leader in the digital advertising sphere. Adcore trades on the TSX under the symbol ADCO.