The great ad tech rebundling is here.
Well, it is if the smoke signals coming from the Riviera are anything to go on. Execs there can’t seem to stop talking about the issue it seems.
“We are seeing the signs of the current and near-future haves and have-nots, those on offense or defense, meeting by meeting here,” said Matt Prohaska, CEO and principal of Prohaska Consulting.
But first, here’s a quick primer on what the great unbundling of ad tech actually means, courtesy of Ratko Vidakovic, founder of ad tech consultancy AdProfs: when real-time bidding took off over a decade ago, it resulted in an unbundling of the traditional ad network. Ad tech companies focused on either the buy-side or the sell-side, and a bunch of new niches popped up like ad verification, brand safety, and contextual targeting providers. But now that companies are reaching limits on growth, they are branching outside of their traditionally narrow categories by encroaching on the markets of other ad tech players.
Back in Cannes: to hear some of the chatter from execs there, this ad tech re-bundling is about to be exacerbated by a turbulent economy. And they may have a point. Advertisers will probably tighten purse strings to weather the worst of this turbulence. If this happens CPMs tend to nosedive. The dip is a result of fewer media dollars being available to drive up prices — bad news for any take rate business that takes a cut of that price. Least of all ad tech vendors — of which there are still far too many worthless ones. That’s clear to anyone who regularly looks at sellers.jsons and ads.txt data. And ad tech vendors thought their business was hard before.
“When it comes to consolidation in ad tech, there have been a number of people that have seen the writing on the wall but have yet to get up close and personal with it,” said Ben Barokas, founder and CEO at Sourcepoint Technologies, a privacy tech firm that helps companies assess ad tech vendors. “However, we’ll be arriving at the wall very quickly and while there will be some that are able to jump over it, many others are going to be hitting it head-on.”
Whatever happens to the market, don’t call it a compression. If anything, the exact opposite is happening. It’s shrinking, to be sure. To survive, much less prosper, ad tech vendors have been redefining and expanding what they do — while carefully sizing up competitors. But tossing out the smaller fish is easier said than done. What’s the point in gobbling up all those businesses to create even larger, more self-contained ad tech businesses than there are now? It’s just going to create more silos — the thing that every advertiser tells an ad tech vendor they don’t want. In conversation after conversation between ad tech vendors this week, everything keeps coming back to one word: interoperability.
“As we prognosticate over the future of ad tech, the constraining factor for ad tech vendors will be whether these moves create any unbridgeable conflicts of interest with their tried and true customer base that got them to where they are today,” said Todd Rose, general manager of identity and addressability at InMobi. “To avoid some of these issues, the smart vendors will reposition themselves as facilitators of monetization for clients rather than being monetization-first businesses. it’s a nuanced but important decision to make because interoperability is central to making it work.”
Even after one of the most turbulent times in recent ad tech history, the market upheaval might just be getting started. What happens now is an interesting question.
One theory making the rounds up and down ad tech marina in Cannes is that The Trade Desk needs to buy incremental growth. Its plan to build out the sell-side of its marketplace to complement the buy-side will only go so far. These rumors aren’t new by any stretch. In fact, they’ve swirled around the ad tech business for at least the last year or so.
That said, if there was ever a time to do a deal then now is as good a time as any. Cash is king because of a combination of high-interest rates and high inflation — great news for anyone who has bundles of it, which The Trade Desk does. Not so much for anyone who is a potential target. Increased financial uncertainty and longer-term rising interest rates and inflation tend to impact valuations negatively.
In other words, the rationale for a deal is clear. What remains murky, at best, is whether The Trade Desk’s management team subscribes to it. Doing a deal would essentially be an open admission that the business — at least in its current form — is losing momentum. That could mean bad news for the company’s much-vaunted valuation.
“The Trade Desk needs to improve its footprint across EMEA overall since its unified ID 2.0 has struggled to scale with publishers,” said an ad tech exec who asked to remain anonymous over concerns of breaching commercial agreements. “So yes, an acquisition would make sense. In the short term, a deal could hit its stock like it would do for most companies that do the buying. Eventually, however, it could lead to established credibility and scale.”
Along the Croisette, there’s a consensus that no one really knows when data clean rooms are going to take off. Bottom line: the same reason too few marketers are implementing them yet, is the same reason why no one is pulling the trigger on any deals in that space: there’s no clear timeline on when they’re going to go from a nice-to-have technology to a must-have.
The other provocative thought experiment circulating around Cannes is whether the promise of CTV is starting to threaten the credibility of banks. In short, CTV is fairly concentrated in all aspects given that anything available outside the walled gardens is limited. That makes it hard for ad tech bosses to pick and choose what the play is. As ever, measurement and attribution are bright spots, especially as the migration of dollars from linear viewing to connected viewing continues to swell.
For the current crop of executives across ad tech, they’ve arguably never experienced a time this challenging. But veterans of the industry know the industry has waded through lean periods before and even found new opportunities amid a quagmire of impediments. Though there will be those businesses that don’t make it through this period unharmed, others will emerge intact or maybe even stronger. It’s all about knowing where the white space is that others may not have noticed.
Web3 and the transition toward true digital ownership
Image Credit: ArtemisDiana/Getty
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How do you think you would answer if I asked you the following question: “What do you own online?”
In real life, you own your home, the car you drive, the watch you wear, and anything else you have purchased. But do you own your email address or your business’s website? How about the pictures that populate your Instagram account? Or the in-game purchases on Fortnite or FIFA video games or whatever else you are playing?
My best guess is, after casting your mind through the things you use the internet for (which for everybody is pretty much everything, social and professional), you would struggle to find a solid answer.
Maybe you would ask me to explain what I mean by “ownership.” But it doesn’t really matter. And while I don’t mean this to be a trick question, it kind of is. Because in the current version of the internet, we don’t have ownership rights online.
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Digital ownership: Participants and products
To understand why we don’t own anything online, we must first understand the evolution of the internet and how it gave rise to the business model that has dominated its current iteration.
In the 1990s — the decade of desktop computers and dial-up connections — the internet was predominantly a content delivery network consisting of simple static websites showcasing information. What we refer to today as Web1 was slow, siloed, and disorganized.
Next came the platforms, such as Facebook (now Meta) and Google, driven by wireless connectivity and the development of handheld devices like laptops, smartphones, and tablets, which gave us free-to-use services that enabled us to edit, interact with and generate content. These platforms centralized the web, putting in place a top-down structure that saw users reliant on their systems and services.
This evolution of the internet took place in the mid-2000s and is the version we know today. We call it Web2. It is a model based on connectivity and user-generated content, made in the image and interests of companies like Facebook, Twitter, Instagram, and YouTube.
In this environment, netizens are both participants and products. We sign up for services in exchange for our data, which is sold to advertisers, and we create content that generates value and fuels engagement for these platforms. We do all this while having no rights to anything online.
Our social media profiles can be taken down and our access to email accounts or messenger apps suspended. We don’t own any of the digital assets we purchase and have no autonomy over our data. Businesses we build online are often reliant on platforms and are therefore vulnerable to algorithms, data breaches and shadow bans.
The deck is stacked against us. Because the option not to be involved, when so much of the commerce and communication in the world takes place online, is not really an option at all. And yet there is nothing that we can point to and call ours. Nothing we have any actual authority over.
And, it is this dynamic that Web3 is determined to change.
Web3 and the “internet of value”
Right now, when most people hear the term “Web3” they probably think “metaverse”. But a better way to think about Web3 is as the evolution of the internet.
Today, the digital experience is very corporate and very centralized. Web3 will offer the dynamic, app-driven user experience of the current mobile web in a decentralized model, shifting the power from big tech back to the users. It will do this by spreading the data outward — putting it back in the hands of netizens who are then free to use, share and monetize it as they see fit — and expanding the scale and scope of interactions between users and the internet.
Underpinning that expansion will be guaranteed access, which means anyone can use any service without permissions and no one can block, restrict or remove any user’s access.
The idea then is that Web3 will not only be more egalitarian but that it will create an “Internet of Value” because the value generated by the web will be shared much more equitably between users, companies, and services, with much better interoperability. Users will have full ownership, authority, and control over both the content they create and their data. But how will this help us transition toward true digital ownership?
NFTs hold the key to digital ownership
The truth is that digital ownership is not too hard a problem to solve. And we already have the solution: NFTs.
In the public consciousness, NFTs are known for the projects that have garnered the most media attention, such as CryptoPunks and Bored Ape Yacht Club. While projects such as these have catapulted the term into the zeitgeist, the usefulness of the underlying technology has been much less discussed.
Simply put, NFTs act as proof of ownership. The details of the NFT’s holder are recorded on the blockchain, all transactions and transfers are tracked and transparent and available to the public, and everything is managed by the token’s unique ID and metadata.
So, how does this work in practice? Let’s say I create an NFT. As soon as I upload it, a “smart contract” is created that tracks its creation, the current owner, and the royalties I will receive. If someone decides to purchase it, they own that NFT and any additional perks that come with ownership. Their details are registered on the blockchain and nobody can edit or remove them.
Now, let’s say that the market for my NFTs starts to heat up, demand grows and the value of my collection begins to rise. If the owner decides to sell, they make a profit and I earn a small royalty from the resale. The change in ownership is tracked on-chain in real-time and the smart contract ensures my royalty fee is deposited directly in my wallet. This is the key value proposition of NFTs: Verifiable ownership and the option to liquidate digital assets.
What’s next for Web3?
This is what ownership looks like in Web3. It is the promise that netizens will be able to own their digital assets in the same way that they own their home, car and watch. NFTs will usher in a more equitable digital economy and will play a central role in the future of digital commerce.
The fact is that as of right now, we are still writing the Web3 rulebook. This is still a very new, very young space. And while few things are certain, what we can say for sure is that the internet is only moving in one direction: ownership.
The guiding principle in Web3 is to accelerate the transition towards a more equitable digital environment. It is very much opt-in, an internet built by the people for the people. It is one in which ownership is the foundation upon which new products, networks, and experiences are being built. And it is fundamental to establishing the internet of value.
Over the next few years, as Web3 develops it will operate alongside Web2. The infrastructure supporting Web2 is very strong and I don’t see us completely shifting away from that any time soon. However, in the medium-to long-term, Web3 will completely reshape our relationship with the internet.
Filip Martinsson is cofounder and chief operating officer of Moralis.
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Apple blocked the latest Telegram update over a new animated emoji set
Ever since Apple launched the App Store, developers big and small have gotten caught up in the company’s approval process and had their apps delayed or removed altogether. The popular messaging app Telegram is just the latest, according to the company’s CEO Pavel Durov. On August 10th, Durov posted a message to his Telegram channel saying the app’s latest update had been stuck in Apple’s review process for two weeks without any real word from the company about why it was held up.
As noted by The Verge, the update was finally released yesterday, and Durov again took to Telegram to discuss what happened. The CEO says that Apple told Telegram that it would have to remove a new feature called Telemoji, which Durov described as “higher quality vector-animated versions of the standard emoji.” He included a preview of what they would look like in his post — they’re similar to the basic emoji set Apple uses, but with some pretty delightful animations that certainly could help make messaging a little more expressive.
“This is a puzzling move on Apple’s behalf, because Telemoji would have brought an entire new dimension to its static low-resolution emoji and would have significantly enriched their ecosystem,” Durov wrote in his post. It’s not entirely clear how this feature would enrich Apple’s overall ecosystem, but it still seems like quite the puzzling thing for Apple to get caught up over, especially since Telegram already has a host of emoji and sticker options that go far beyond the default set found in iOS. Indeed, Durov noted that there are more than 10 new emoji packs in the latest Telegram update, and said the company will take the time to make Telemoji “even more unique and recognizable.”
There are still a lot of emoji-related improvements in the latest Telegram update, though. The company says it is launching an “open emoji platform” where anyone can upload their own set of emoji that people who pay for Telegram’s premium service can use. If you’re not a premium user, you’ll still be able to see the customized emoji and test using them in “saved messages” like reminders and notes in the app. The custom emoji can be interactive as well — if you tap on them, you’ll get a full-screen animated reaction.
To make it easier to access all this, the sticker, GIF and emoji panel has been redesigned, with tabs for each of those reaction categories. This makes the iOS keyboard match up with the Android app as well as the web version of Telegram. There are also new privacy settings that let you control who can send you video and voice messages: everyone, contacts or no one. Telegram notes that, like its other privacy settings, you can set “exceptions” so that specific groups or people can “always” or “never” send you voice or video messages. The new update — sans Telemoji — is available now.
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