IAB: Media Buyers Boost 2024 Ad Outlook To +11.8%

With growing calls for consumer privacy on the web, Google parent company Alphabet Inc. and Apple Inc. plan or already have made major changes to customer tracking. Apple now requires user opt-in for apps to track users, and Google is getting rid of third-party cookies on its market-leading Chrome browser. While these changes hearten privacy advocates, they’re likely to disrupt online retailers’ longstanding marketing practices. Without accurate consumer tracking, merchants are worried that a portion of their ads will be less effective at driving sales. In response, merchants plan to shift their marketing dollars to other channels that are more predictable at driving revenue. Online cookies are small pieces of text websites placed on a site visitor’s browser to track preferences, such as language, to know what consumers are interested in, and facilitate other functions. More companies started using cookies in late 1995 after Microsoft Corp. integrated them into its Internet Explorer browser. There are many different types of cookies, but third-party cookies are controversial because advertisers, marketers and data-analytics firms place them on consumers’ devices to know where a consumer’s been on the web, leading to more targeted ads.

Direct mail and digital ads are the ultimate power team. While compelling on their own, together they make a larger impact on the consumer, but this is increasingly difficult to achieve in the wake of the phasing out of third-party cookies. For years, direct marketers have run cross-channel marketing programs that use third-party cookies to track user behavior across websites – we all see those ads that seem to follow us around online. In response to European and CA privacy regulations, third-party cookies have largely already been phased out by most browsers (now only relevant 40% of the time), such as Apple’s Safari and Google’s Chrome, which will fully phase out cookies in 2023. So, if cookies are going away and direct marketers want to reach consumers at the same time across channels to lift and improve response, what do they do?

The good news is that U.S. ad executives project their second-half ad spending will be up an average of 7% vs. what they originally planned, according to a survey released this morning by the Interactive Advertising Bureau (IAB). The bad news is that the same sample of ad execs reported their full-year ad spending will be down 31% from what was projected in a similar survey conducted by the bureau in the fall of 2021.