Digital Advertising: changes, challenges and ways forward

EFSA gave a presentation to the Digital Marketing conference on 23-24 November. While doing my research, I came across some USA based research on the changes seen recently in the digital marketing environment, which I thought I should share. When Apple offered its customers greater privacy control earlier this year in response to public pressure from the USA and Europe, it upended mobile advertising. According to a survey in the USA by data science company Proxima, 40% of respondents said the iOS privacy policy change negatively impacted their business. Although some commentators have prophesied the end of digital advertising as we know it, Apple’s privacy rules are only one aspect of the ongoing digital advertising evolution. Apple’s App Tracking Transparency (ATT) policy kicked things off in spring of 2021, while the unexpected entrance of new ad platforms, including Netflix and Uber, offers more choice to the advertiser. Consumer brands, especially direct-to-consumer (DTC), continue to rely on digital advertising and there are a growing number of ways to use it better.

The chaos of the past year has left advertisers with an ever-changing field of imperfect options and the need continuously to revise their approach. As changes driven by privacy concerns weakened the ability to target consumers, particularly on Facebook, 46% of consumer marketing leaders surveyed by Proxima said “difficulty targeting” and “limited budget” were their top 2 challenges to marketing effectiveness. About 40% specifically said changes to iOS’ privacy policies had a negative impact on their business. The impact has been disproportionately felt by smaller startups. Among those surveyed, 70% of large companies expect to exceed 2022 revenue goals, but only 52% of SMEs reported similar levels of optimism. The SMEs in the survey were also 20% more likely to report that changes brought by iOS’ privacy policies have had a negative impact on their business. The Proxima report points out that it is important for consumer startups to sift the opportunities from the doom and gloom headlines. For example, the number of users on Facebook, reached 1.93bn daily active users in Q3 2022; TikTok is more popular than ever, which is great for brands that want to experiment with a growing platform, and Instagram’s 2bn monthly active users means that that platform still presents a huge opportunity for brand building and engagement.