The cookie is on its farewell tour as subscription- and ad-supported media battle it out. Data privacy laws are cropping up everywhere, but a federal law has yet to move forward.
“We are at a critical inflection point in our digital evolution,” IAB CEO David Cohen told attendees at the 1,200-person-strong Annual Leadership Meeting in Marco Island, Florida, on Monday. “[It’s] a time I think we’ll look back on as ‘the in-between years.’”
Some of the changes advertising and media are navigating are painful. Digital media is doing layoffs, data is being pulled out of programmatic, and TV companies are building still-unprofitable streaming businesses while their linear business declines.
“The Privacy Sandbox and deprecation of third-party cookies will be a tremendous story this year. It will change fundamentally things we have done across every dimension of the business,” Cohen told AdExchanger after his speech on Monday.
He talked to AdExchanger about where the IAB is focusing its attention on the year ahead.
AdExchanger: Do you have any hindsight moments over the past four years while the industry had been waiting for the end of the cookie to happen?
DAVID COHEN: We are an industry that doesn’t move until it has to move.
There is a focus on quarterly business results and delivering to the Street. And now it’s four years later, and we still have people sitting on the sidelines.
Whether it happens at the time it’s currently destined to or gets pushed slightly (which won’t be Google’s decision; it will be the CMA’s decision), I believe it’s going to happen.
There’s a flip view that everyone is procrastinating because it’s painful, in that there is no way to get to the same level or better without cookies. That if we can’t get to parity in the four years everyone has been waiting, we’re really screwed.
There needs to be an understanding and acknowledgement that what got us here is going to change – and is changing. Privacy-preserving technologies, privacy-first orientation: There will be trade-offs. We may not be able to do exactly what we did for the past 25 years, and that’s OK.
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Everyone is looking for the silver bullet. I think that’s naïve. Is it contextual? Is it UID2? Is it seller-defined audiences? The initial indication is that there will be a CPM impact for publishers, and there might be some performance impact. But this is the world we live in, and we have to adapt.
One way buyers might adapt is by moving budget out of digital to TV. Without sports, [linear] television is really in a hurt locker. [Marketers] are trying to find ways to take money out of television and put it somewhere else. There are not many other options out there: Digital is 76% of the market today, and it will be 100% of the market before I retire.
You used to lead investment at an agency. Where would you be shifting budgets between channels?
The truth of the matter is that, in TV, there is $60 billion that needs to either find another home or stay in TV. I don’t think we can accommodate $60 billion in the options we currently have today. We are limited by scale and ease of transaction.
I would be putting more into ad-supported streaming. Amazon moving into that space opens up a bunch of inventory that we didn’t have access to before.
I would also be putting more money into commerce (retail media networks). Being able to close the loop is invaluable, and you can’t do that everywhere.
I am super excited by digital out-of-home and the opportunities there, with another screen powered by tech [and] data.
What does success look like to you in Washington, D.C. in the next 24 months?
Someone asked me what I want my legacy to be. I would love us to get a national privacy law done in the next two to three years. I think that’s realistic.
Along the way, we will have 25 to 30 states that will have laws in the next two years. We have 14, and we will have another 20 in the not-so-distant future.
The other thing we have to try to avoid is that subcategories, like kids and health care and AI, are also happening at the state level. That kind of patchwork would be really complicated, and we don’t want that to happen.
What about the FTC? What would you want to see out of them in the next 24 months?
Education is the best way to a good outcome. If we open up folks’ eyes to the good things going on in the rest of the industry – and that their quest to punish Meta and Google will invariably punish the rest of the industry and creators – I think they will listen to that.
I think they are on a crusade that is pointed in the wrong direction, and we are going to continue to try to educate them as much as we can.
This interview has been edited and condensed.