As retail media expands, it becomes more complex and creates significant challenges for retailers, brands, and agencies. For instance, fragmentation within the space creates a cumbersome and inefficient buying process, hampering the widespread adoption and growth of retail media networks. There is a pressing need to develop multi-retailer, multi-channel, and multi-format platforms driven by ROAS to address this issue. 

These platforms would enable retailers and brands to fully capitalize on the opportunities within retail media, ensuring that advertising remains relevant and effective at every stage of the consumer journey.

In response to these challenges, companies like Criteo are forging strategic partnerships to simplify and scale retail media operations. For instance, Criteo’s collaboration with Microsoft Advertising aims to streamline the monetization of retail media inventory through a unified omnichannel platform. 

We spoke with  Brian Gleason, Chief Revenue Officer at Criteo and Lynne Kjolso, Vice President of Global Partnerships and Retail Media at Microsoft Advertising, about how their partnership can empower retailers to connect with meaningful demand and enhance the shopping experience by leveraging first-party data to deliver more relevant ads.

Andrew Byrd: What are the main challenges retailers face with platform complexity, and how can these be simplified to benefit omnichannel retail media programs?

Brian Gleason: As retail media continues to scale, platform complexity is creating an increasingly fragmented ecosystem for retailers, brands, and agencies. Currently, brands are buying retail media via multiple platforms, leading to a cumbersome buying process that, in turn, impacts widespread adoption and growth for retailers’ media networks.

The retail media ecosystem must prioritize the development of ROAS-driven multi-retailer, multi-channel, and multi-format platforms that allow retailers and brands to capitalize on the booming opportunity effectively. With shoppers increasingly returning to physical stores, ad tech providers must connect retailers to meaningful and relevant demand that allows them to speak to audiences at all stages of their purchase journey — wherever and whenever they shop. 

With Microsoft naming Criteo its preferred partner to serve the onsite needs of its retailer clients, the two companies intend to help retailers monetize their valuable retail media inventory through a simplified omnichannel platform and program management. 

AB: How can the advertising experience be improved to enhance relevance for shoppers and reduce marketplace inefficiency?

BG: Retail media is inherently consumer-centric by harnessing first-party data, but there are still inefficiencies that can be optimized to provide a better experience for consumers as they shop across the open internet.

For example, product-first retail media strategies reduce fragmentation in the market by allowing brands and agencies to scale their campaigns across multiple retailers. At Criteo, we’ve integrated SKU-based planning into our platform, which allows brands to promote their products on any retailer in our network where their product is sold in one streamlined campaign activation, management and optimization workflow with closed-loop measurement.

This, in turn, creates additional opportunities for brands to reach consumers with relevant ads. At the same time, they browse the open internet while ensuring the products they choose to buy are in stock and available for purchase at their desired retailer.

AB: How does the integration between Criteo and the Microsoft Advertising Network aim to simplify and scale demand access for advertisers?

BG: Our relationship with Microsoft Advertising builds on our strengths to drive scale, simplicity, and innovation in retail media. Specifically, our planned strategic collaboration would bring Microsoft Advertising’s extensive demand to Criteo’s global network of 225 retailers, empowering Microsoft Advertising’s 500,000+ global active advertiser clients to achieve stronger, measurable performance for their campaigns.

Overall, our collaboration would benefit all parties within the retail media ecosystem. Retailers would have access to increased global demand, while brands and agencies would have increased supply options that help them diversify their campaigns and reach shoppers with personalized advertising through a single point of entry, driving performance growth with scale.    

AB: Can you provide more details on the planned innovations with Microsoft Curate and the AI-powered Retail Media Creative Studio and how these will benefit advertisers and retailers?

BG: Through our collaboration with Microsoft Advertising, we’re exploring opportunities for our advertiser clients to tap into Microsoft Advertising’s generative AI and innovations, such as its AI-powered Retail Media Creative Studio. Harnessing tools like the Retail Media Creative Studio would make it easier for Criteo clients to create and optimize their ad creative at scale with the power of generative AI while providing retailers with creative advertising formats to drive engagement on their owned and operated properties.

AB: Considering current trends and challenges, what do you envision as the future of retail media in the next five years?

BG: Over the next five years, retail media will progress through greater unification to unlock the full potential of the $150 billion retail media market, focusing on efficiency, integration, and growth. As the industry scales, retailers will increasingly operate as media companies, using their valuable first-party data to enhance customer engagement and drive transactions. 

As we continue to address platform complexity and fragmentation issues, solutions like Criteo’s Commerce Media Platform will drive the adoption of multi-retailer, multi-channel, and muti-format campaigns. The industry will also embrace a full-funnel approach, combining onsite display with offsite ads to create a unified consumer journey and leveraging closed-loop measurement for enhanced performance.

Increased investment will prompt brands to scale their retail media efforts and optimize return on ad spend, highlighting the need for advanced tools like AI that will drive agile optimization. As this investment increases, industry-wide standardization will become crucial, with collaboration among key players like the IAB and MRC helping to reduce fragmentation.

AB: Your blog post alludes to retail media still being in its teenage years. What steps need to be taken to prepare it for adulthood?

Lynne Kjolso: There is a lot of promise in retail media, but evolution and maturity are required to fully take advantage of the opportunities.

Specifically, there is platform complexity with so many point solutions flooding the market. Retailers would benefit from more simplicity in their options and the ability to activate omnichannel retail media programs. 

Additionally, ad buyers pay a heavy operational tax due to fragmented buying challenges. With more unified ways to access retailer supply, like in our collaboration with Criteo, buyers can access retail media supply seamlessly and at scale.

Lastly, the advertising experience is often poor for consumers due to a lack of a cohesive approach and standardization. We can address this marketplace inefficiency by putting the consumer at the center of the equation. For example, retailers can use Microsoft Curate to extend and monetize their onsite audience with curated deals available in any DSP. This makes it easier for advertisers to seamlessly buy off site retail media in the same place as their other digital media buys. 

AB: How does Microsoft Advertising plan to address the fragmented buying challenges caused by the proliferation of retail media walled gardens?

LK: Our collaboration with Criteo is an important step in addressing fragmented buying challenges. As a company, our goal is to empower the entire ecosystem to achieve more. In retail media, this equates to bringing scale, simplicity, and innovation to the market. By bringing our scaled demand to Criteo’s retail media supply, we’re breaking down walls and helping advertisers access a rich array of retailers through a single entry point.

The post Microsoft and Criteo’s Unified, ROAS-Driven Retail Media Strategy appeared first on AdMonsters.

In ad tech, artificial intelligence is used for predictive modeling and real-time campaign optimization. DSPs use the technology to determine winning bids, and the sell-side uses AI to organize and tag inventory.

However, these days, there’s a new kid on the block that has the streets watching. Generative AI took the ad tech world by storm, but is the new IT girl a fad that will fade away in a few years, or does it have the staying power to impact the future of the advertising ecosystem? Experts have mixed opinions. 

For example, DMEXCO conducted a study surveying 500 industry professionals, and nearly three-quarters of them stated they found generative AI useless for their business. 

“Around one in ten of those surveyed in marketing, communication, and media may already be testing AI in terms of content production and search engine optimization, but most communicators are still cautious or even skeptical about actually using AI in their companies,” a DMEXCO representative said. 

On the other hand, publishers and tech platforms are adopting generative AI tools such as ChatGPT into their systems. Microsoft, Meta, and Snapchat have integrated generative AI technology into their business on a large scale. Publishers like Insider and Bloomberg are using or testing generative AI in their newsrooms. 

What Is Generative AI? 

 Generative AI does as its name suggests; it generates content. The content ranges from images, videos, text, audio, and other mediums. This subtype of artificial intelligence could disrupt every aspect of the advertising industry, from brainstorming to copyrighting to targeting ads. 

ChatGPT is the most popular form of generative AI. The technology takes text-based input and generates text-based outputs. Users can ask questions such as “What is the largest monument in the world?” or “How can I start understanding the programmatic supply chain?” The tech even allows the user to be creative. For example, for a recent AdMonsters event, we asked ChatGPT to write a song about ad tech in the style of a Beyonce song. Here are the results: 

I’m in the ad tech game, ain’t no shame

I’m the queen of targeting; it’s my claim to fame

I got the data; I got the insight

I know your interests; I know what you like

Chorus:

I’m in the ad tech game, making waves

Driving engagement, like it’s Beyoncé’s stage

I’m always innovating, never slowing down

I’m the queen of ad tech, wearing my crown

While the song won’t be winning any Grammys, the results show that the technology is intuitive enough to pick up some of Beyonce’s signature cadences while also sprinkling in knowledge about ad tech. 

Critics have also accused the tech of stealing jobs. With its ability to generate content, some have tested its skills. Actor Ryan Reynolds recently created an ad for his company, MintMobile, where the script was entirely written by ChatGPT. 

Despite some industry skepticism, publishers and agencies are integrating the tech. Microsoft is one of generative AI’s most prominent investors. They invested $1 billion into OpenAI, the company that created ChatGPT. ChatGPT is now incorporated into the Bing search engine, Office apps — Word, PowerPoint, and Outlook — and its Azure Cloud Service. Even ad tech vendor Admiral integrated ChatGPT into its Visitor Relationship Management platform to automate visitor engagement and generate publisher revenue. 

What Are the Concerns With Generative AI? 

The list of benefits for the tech is long, but industry experts have also raised concerns. 

The most pressing issue is the spread of misinformation. OpenAI even posted a disclaimer on its website. It reads: “All the information on this website is published in good faith and for general information purposes only. ChatGpt Connect does not guarantee this information’s completeness, reliability, and accuracy.” 

The tech is only as good as the information it receives. If the data aggregated into the tech is false, so will the output. Some businesses have already banned posting answers generated by ChatGPT. Stack Overflow, a platform used to generate questions, prohibits users from posting answers created by ChatGPT because of the model’s low accuracy rate. Often these answers have the appearance of truth, so it is hard to falsify them. 

In addition, generative AI could open new questions about data privacy. Some technologists are worried about how AI will disrupt targeted advertising once companies can upload their data to a model’s neural network. From the consumer’s perspective, how will they feel about artificial intelligence having access to personal data? 

There are efforts to regulate the tech. In March, The White House and the European Commission had their first official meeting to discuss the development of AI tech and how they can regulate it. The European Union created the Artificial Intelligence Act in 2021 for that very purpose; the emergence of generative AI upended those regulations. 

“There are potentially real benefits from large language models and applying those to various social problems, specifically writing more secure code to make sense of a lot of the data and insights out there,” a senior administration official from the White House said. “We want our economy to get those benefits, but there’s also real worry about it. The same vulnerability analysis one might do for cybersecurity; one might also do to find vulnerabilities to hack.”

Generative AI and the Advertising Ecosystem

We’ve already heard claims about how generative AI will vastly change the advertising ecosystem, but how? 

Customer Targeting: According to AI experts, generative AI can help brands target customers more directly and effectively. AI has the potential to sift through large data sets and find hidden patterns. Machine learning can highlight which customers are most likely to make a purchase based on their demographics and past purchase history.

Personalization: There are also claims that generative AI can help produce marketing assets and web content that is more personalized to the consumer. If brands aggregate the users’ data into the tech, it can help determine if an ad or web content aligns with a consumer’s interest. 

Testing: The tech can also help you measure the performance of a marketing campaign. You can give generative AI access to your company’s ad performance data, and it will generate answers for what you can do next. Experts warn that human intervention is necessary for this part of the process. 

The post What Is Generative AI and How Is It Changing the Advertising Ecosystem? appeared first on AdMonsters.

“Do Not Track” (DNT) would remain the default setting in IE10, with consumers able to disable it only through a “custom” setting.

Make no mistake: Microsoft’s continued support of DNT as the default setting in IE10 risks advertising support for free and low-cost internet products and services. The default setting on any browser needs to enable the open and transparent web. This is critical to the role that data plays in helping to subsidize the free and low-cost services available on the Internet today.

Crippling a Thriving Ecosystem

Responsible online data collection is not a “problem” to be fixed, but an essential part of the commercial web’s architecture, which requires websites to collect non-personal information for basic functions, from serving a page to frequency capping. DNT as a default on any browser, or embedded into initial settings and which would undercut incentives to abide by commonly understood and privacy-protective responsible data collection and use principles – as well as undercut many ad-supported programs.

The business community has invested millions of dollars to develop and implement a mechanism creating significant privacy-protective benefits for consumers:

• The DAA icon reassures consumers that any brand using it has also committed itself to responsible data use practices.
• The DAA icon provides meaningful, and in-context choice for consumers who wish to control their web experience.
• The DAA icon binds an entire ecosystem of Internet companies who have committed to common principles for online advertising, meaning that consumers can rightly expect a consistent browsing experience regardless of technology, publisher, or content.

This approach balances consumer privacy with consumer demand for free or low cost products and services, while ensuring business can continue to innovate. Microsoft has been and continues to be a party to these initiatives, making its recent announcement that much more concerning. It had appeared that the company understood the value and benefit of ecosystem-wide responsible data use and providing a consistent user experience across the Internet in a technology-neutral way.

The proposal also creates the unintended consequence of driving a wedge between brands and consumers. This portends a scenario whereby consumer trust in online advertising and the brands relying on it erodes dramatically. The next question is: who will subsidize the commercial Internet then?

Other than Wikipedia, each of the top 10 online publishers depends on the thriving online data ecosystem since they are each free to consumers and wholly dependent on advertising revenue. The reality of today’s Internet is that the flow of data supports the thousands of large and small online publishers who rely on data collection to support their businesses with advertising.  A 2010 study by the Network Advertising Initiative (PDF) and conducted by Howard Beales, the former Director of the Bureau of Consumer Protection at the FTC, showed that data-driven online advertising provides benefit for both consumers and advertisers.  

A Worthier Goal

The Digital Advertising Alliance (DAA), has built a self-regulatory program that enables a more transparent ecosystem, balancing consumer interest in privacy with business-driven innovation.  The DAA’s Self-Regulatory Program gives consumers transparency and choice over their browsing data, while ensuring that necessary business and technical functions can continue.  Importantly, it also preserves the role of brands in promoting trust with their consumers by tying responsible data use to a prominent, recognizable and ubiquitous icon which consumers can interpret and act upon as they wish.

DAA’s Advertising Choices Icon is served in more than one trillion ad impressions per month, and it is reaching virtually all U.S. consumers online with transparency and choice about their web experience. Through global collaboration the DAA is assisting in the roll out of similar privacy protective programs around the world.

The Council of Better Business Bureaus and the Direct Marketing Association (DMA) actively enforce our program using industry-leading technology that has already identified and called out more than a dozen bad actors. The Federal Trade Commission, Commerce Department, and the White House have all praised the DAA’s achievements. Advertisers have embraced it because they understand how much consumers favor more transparent relationships with them. 

In short, the program is working. Thanks to the DAA, more consumers understand that web media works like all other kinds of free media, with advertising supporting it.

As celebrated at the White House event in February (PDF), we already have consensus about how best to proceed, while retaining the values of today’s internet economy by utilizing a default opt out choice.

Thanks to the DAA and our industry self-regulatory program, consumers can enjoy a more transparent internet ecosystem. The parties that collect and use data online within the DAA program do so responsibly and for consumer benefit.  Our program is about enabling that transparency, along with the continued growth of a thriving ecosystem. DAA is working to ensure that the entire ecosystem (Microsoft included) also supports this worthy goal.

Macro-level changes are coming, and you can sieze the opportunities that follow at OPS NY. This event will bring together digital advertising leaders and ops professionals to discuss a rapidly evolving landscape and develop strategies for monetization. Register today for OPS NY which will be held Oct. 4, 2012.

The post The Risks Behind Microsoft’s Default DNT Setting appeared first on AdMonsters.

Oh yes, even Google agreed a few months ago to include DNT in Chrome and Mozilla’s Firefox was the first of the biggie browsers to introduce the tool, but Microsoft is breaking into new territory by setting the switch to “on” from the get-go. IE10 browsers will actually have to opt out of DNT. 

How it works – when hitting a site, a browser with DNT engaged will send an HTTP call to the publisher, which will acknowledge the setting and prevent (most) cookies from being served to that user. That is, if the site complies with the DNT protocol. Agreements between digital advertising advocacy groups and federal regulators appeared to be pushing for universal DNT compliance, but this business with IE10 may be a monkey wrench in the process.

Industry Backlash

The Digital Advertising Alliance (of which Microsoft is a partner) shot off a press release, commenting that in coming to terms with the U.S. government around a Consumer Privacy Bill of Rights, it  “committed to honor browser settings that enable the use of data to continue to benefit consumers and the economy, while at the same time providing consumers with the ability to make their own choice about the collection and use of data about them.” Basically the DAA said its members are cool with complying with DNT, but the default mode should be off.

IAB President and CEO Randall Rothenberg also sent out an email stating: “This represents a step backwards in consumer choice, and we fear it will harm many of the businesses, particularly publishers, that fuel so much of the rich content on the internet.”

Microsoft doesn’t seem to be of the same mindset. “Our decision to provide IE10 customers a ‘privacy by default’ experience in an era when so much user data is collected online reflects our commitment to putting people first,” a Microsoft spokesperson told AdMonsters.

And that’s a lot people put first: according to the most recent data (May) from StatCounter, IE is the tool of choice for 38.35% of US browsers, followed by Chrome at 23.66% and Firefox at 22.41%. Safari, which features private browsing as its default setting, has a 13.51% share in the U.S. When praising Twitter’s decision to comply with DNT technology on May 17, Mozilla Global Privacy and Policy Lead Alex Fowler announced a DNT adoption rate of 8.6% on desktops.

Affected Parties

Tracking devices such as cookies are essential to the ever-growing exchange and RTB-fueled digital advertising landscape. They allow publishers to boost their revenue by packaging users into anonymous audience buckets and marketers to more accurately target potential new and repeat customers.

They’ve also become quite handy when it comes to non-targeted ads – frequency capping to avoid bombarding users is quickly becoming standard practice (even a requirement in terms and conditions). Finally, cookies are increasingly necessary to power social-imbued sites that rely on third-party inputs to provide the desired user experience.

“It will effect the advertiser’s ability to target relevant audiences, thus reducing all of these great efficiencies we (the industry) have created over the last decade,” said Paul Geller, a digital publishing executive, who has been extensively researching and speaking on online privacy issues for several years. “It will effect every major political campaign, PACs and Super PACs that are all using retargeted advertising and most importantly it will effect the quality of life of every consumer using the IE browser.”

There another questions emerges – if IE users feel like they’re missing out on the “Internet experience,” are they more likely to switch off DNT (which Microsoft says can be easily done by visiting Advanced Options in the Internet Options dialog) or switch to another browser?

At Wired, Editor Ryan Singel notes that Microsoft may be taking a stab at old foe Google, which makes a growing pool of revenue off of targeted advertising and has technology that plays a role in about every step. (Google Analytics would not be affected by DNT due to exemptions; however, publishers would not be able to transfer DNT analytics data to Google advertising products.) 

Microsoft would seemingly be shooting its own targeted online display advertising in the foot, but that business is certainly not the company’s bread and butter. According to the company’s fiscal third-quarter 2012 earnings report, online services (including digital advertising) lost $479 million, an improvement from a $776 million loss in 3Q 2011. 

A Stroke Too Soon?

There’s also a sense that this move is premature – the World Wide Web Consortium’s Tracking Protection Working Group is about to open up its standards for a DNT mechanism and guidelines around compliance and scope for public comment. Within the group – composed of  70 diverse organizations, including all the makers of the most-used browsers, privacy advocates, the most major of publishers, and advertising technology and services providers – there’s still a great deal of dissent on issues, such as what DNT actually means. 

As we found out at the AdMonsters DNT Meetup With the W3C, other topics under discussion include the definition of first parties, the concept of multiple first parties, third-party exceptions and language to support opting in. According to the current Tracking Protection Working Group timeline, Proposed Recommendations would be delivered in September, with the final Recommendation sealed in October. There’s still a good deal of work to be done, compromises to be hammered out.

Singel rightly suggests that Microsoft’s “privacy by default” move could “threaten the still-nascent privacy standard, and prompt an ad industry revolt against it.” He quotes Justin Brookman, director of consumer privacy at the Center for Democracy and Technology: “I hope this doesn’t throw a wrench into works on getting agreement on Do Not Track.”  

For DNT to work, the online publishing and advertising community must agree to comply with the protocol. At the AdMonsters DNT meetup, it was commented that any reduction in the audience targeting pool will have a detrimental effect on second-channel ad revenue, and on exchanges, DNT-enabled users would likely be labeled unsellable. Worst-case scenario: nearly 40% of U.S. Internet keep their default IE settings and become untargetable.

Ultimately Geller sees dark omens in Microsoft’s move to make DNT the default on IE10: “It likely means that the quality of advertising will be reduced. Say goodbye to awesome interactive ads with products you’re more likely to enjoy and say hello to pop-ups and pop-unders. The rebirth of the ‘Oh My God. No Way’ ad. 

“Microsoft’s ‘Do Not Track’ setting means the rebirth of pop-up ads and untargeted spamvertising,” he added.

Read more about DNT and sign up for the Ad Ops Speaks on DNT W3C community group (Note: you must register for a free W3C membership first).

Pondering the future of TV and digital video? OPS TV will bring digital advertising leaders and ops professionals together to discuss the intersection of digital video and TV advertising. Register today for OPS TV, which will be held July 11, 2012, in New York.

The post ‘Privacy by Default’: Fallout From Microsoft’s Bold DNT Move appeared first on AdMonsters.