At this point, it’s not news that years of ongoing changes in data privacy regulation have created massive amounts of change in the way that data is being used (or not used) across the advertising industry.

As IAB Tech Lab CEO, Anthony Katsur, often says, “Just like energy, finance, or healthcare, advertising is now a regulated industry.” As part of this trend, publishers face challenges in creating sustainable revenue growth.

Navigating Data Privacy in Advertising

Whether it’s the continuing decline in ad revenue that digital publishers are grappling with or the never-ending struggle that the streaming television industry is having to reach profitability it’s clear that owners and publishers of media are feeling the effects of these changes.

One of the areas where these changes are most visible is within the publisher’s data technology stacks. Increasingly, publishers are centralizing the many data sources they need for monetization within their data warehouse. While this evolution brings the promise of insights and connectivity, publishers also need a purpose-built application layer to help them activate and get the most value from their data.

DMPs: From Central Role to Obsolescence

For years publishers relied on DMPs to be at the center of their monetization efforts. As cookie-based monetization becomes less and less dependable and publishers’ distribution channels continue to fragment outside of the web these systems have failed to develop new solutions for key functions like app and historical data collection, 2nd-party audience enrichment, and programmatic activation.

This leaves most legacy DMPs relegated to web-based data collection, audience segmentation, and simple ad-serving activation. Additionally, traditional DMPs were not built with important capabilities such as data clean rooms, identity resolution, and PETs which are extremely important in our privacy-centric world.

Data Warehouses: A New Hub for Monetization

Many DMPs have responded by integrating large data sets through mergers and acquisitions to help fill gaps around identity, some are playing catch up by trying to build more privacy-centric features like identity and clean rooms, and others have decided to completely go out of the business. A response to this lack of innovation by DMPs in recent years has been more organizations investing in their data warehouse to centralize their various audience data sources. The question is, is the data warehouse alone enough?

The Missing Piece: Purpose-Built Applications

As we talk to customers in the market it’s clear that they need applications that can work with their data warehouse to create efficiencies and grow their revenue. One of the biggest challenges is actually activating data.

Data warehouses often rely on applications and integration providers to make data more actionable which leaves publishers building expensive custom solutions and navigating complicated operations.

Similarly to how the Composable CDP movement has stepped up to help marketers evolve how they activate data in their warehouse, media owners and publishers (and new companies like retail media) need solutions that are purpose-built for both the era of privacy as well as ad monetization use cases.

Embracing the Future of Audience Monetization

Audience monetization platforms of the future need to be able to combine the streamlined audience building and activation (in both programmatic and direct)  that legacy DMPs relied on, while also allowing for more complex tasks like normalizing various data sources, running complex identity resolution models and collaborating within data clean rooms.

As free and scaled 3rd-party cookie data goes away the monetization is shifting to the publishers and media owners who are investing appropriately in their 1st-party-data, and there’s a major opportunity to create profitable growth. Investing in technology to help power this growth is crucial and will separate the winners from the losers during this period of change.

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