The ad industry is making major investments in order to adapt to the new privacy-by-design ecosystem, according to an IAB survey of 500 advertising and data experts at brands, agencies and publishers.

The 2024 edition of the IAB’s annual “State of Data” report shows how the industry is addressing the new privacy-by-design ecosystem in which the deprecation of third-party cookies and other privacy-protective measures are expected to lead to significant signal loss. In particular, the new environment is expected to put obstacles in the way of targeting, personalization and measurement.

Where the focus is. More than half those surveyed anticipate challenges in tracking conversions, attributing conversions to campaign or channel performance, measuring ROI and optimizing campaigns; almost 50% expect to struggle to measure reach.

Against this background, some 90% are shifting their personalization tactics, their ad spend, and the balance of first- and third-party data in their ad strategy. Eighty percent are planning to train their staff on privacy-related issues, while many expect to create dedicated teams or employ external experts to work on these issues.

Brands, agencies, and publishers are planning to grow their first party data-sets at a rate almost double two years ago (71% vs. 41%).

Who stands to lose? The little guys, of course; the small-to-medium independent publishers that make up much of the fabric of the open internet. Larger publishers are much better placed to undertake the data and process overhauls and training that the new environment requires.

What’s more, signal loss means advertising budgets are already tilting toward the big walled gardens.

Dig deeper: Goodbye to cookies: Digital advertising’s leap in the dark

Why we care. The ad industry may have finally woken up to the fact that the future is going to be very little like the past. It has taken its time. More than a year ago, IAB CEO David Cohen described the deprecation of third-party identifiers as “the world’s biggest slow-motion train wreck.” The new IAB report does at least indicate that the ecosystem is squaring up to face reality.

Ninety-five percent of ad and data decision-makers expect continued signal loss and/or privacy legislation in 2024 and beyond. One wonders what the other 5% see around the corner. Yes, there are a number of factors that could push Chrome cookie deprecation back again, but that’s not going to recur forever. Will Privacy Sandbox protocols, alternative identifiers, first-party data and contextual advertising overcome the signal loss. One day — and probably sooner rather than later — we’ll find out.

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