After nearly 3 decades of incredible progress automating advertising across platforms and channels through programmatic, advertisers and media investors still grapple with residual challenges. These persistent hurdles include integration issues with marketing technology and data management platforms, cross-platform measurement, managing brand safety, reducing fraud and carbon emissions in advertising.
While many of these have been addressed through industry best practices, tools and solutions, some remain outstanding. A well-known cause of the industry’s limited ability to address these issues effectively has been its relative sluggishness to adopt solutions at the rapid pace the digital media ecosystem demands.
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Ad tech at inflection
From the beginning, the industry has innovated to meet challenges at every stage of its progress. With healthy competition driving each emerging problem, stakeholders invested heavily in infrastructure, certification programs and human resources to stay current and ensure returns. However, in recent years, these investments have reached a fever pitch, showing signs of redundancy and obsolescence.
This recent cycle has caused some hesitation in the media supply chain as stakeholders assess the return on investments and question whether the latest ad tech layers or certifications are adding unnecessary tech debt. In the last 24 months, this trend has been particularly evident in compliance with privacy regulations across various jurisdictions. Unfortunately, when it comes to regulations, the industry cannot afford to view compliance as a competitive advantage but rather as a necessity to defend against penalties and even existential threats.
The cost of doing business in digital advertising today includes mandatory compliance with both domestic and foreign regulations. The rise of privacy as a basic human right worldwide has sparked 3 simultaneous narratives:
- Regulators are strengthening laws to protect citizens from unchecked corporate surveillance.
- Tech platforms are securing their data.
- Consumers are making choices based on trust.
These forces have generated a monumental challenge, requiring distinct strategies, infrastructure and user experiences to address.
For years, advertisers have largely relied on ad platforms to offer frictionless solutions to reach audiences, and the supply chain has delivered. From the emergence of lower-funnel activities – from search to the magic of retargeting in programmatic environments – advertisers invested heavily in a system that has overtaken television in expenditure.
Digital media’s unparalleled ability to connect with audiences at scale is the cornerstone of its success, with the world’s largest brands committing billions to the channel. Furthermore, its accessibility through intuitive dashboards and self-serve interfaces has created vast opportunities for small to medium businesses, representing roughly 98% of the Canadian economy. Advertisers large and small could simply allocate their budgets and let the system do the work. While sophisticated advertisers invested in data management platforms, most advertisers in Canada’s $18 billion digital media market remained encumbered by the technical infrastructure needed to make it happen.
Consent and compliance
What makes today’s era different is that, for the first time, the industry faces an all-encompassing overhaul of general practices, affecting every stakeholder, big or small.
While all business owners understand that advertising is essential for thriving in any economic climate, Canada’s emerging policy is challenging this notion. Bill C-27, the long-looming privacy bill, currently offers no exemptions for opt-in requirements for data use in online advertising.
Beyond the immediate concern of losing data signals from customers visiting brand websites, compliance will force every advertiser that uses data for audience targeting to implement an opt-in mechanism on their website and any other touchpoint collecting data for advertising purposes, including in-store environments. Compliance will also demand accountability, which can only be achieved through technical infrastructure specialized in opt-in management.
Since the General Data Protection Regulation (GDPR) took effect in Europe in 2018, the industry has closely followed the development of consent management platforms. Effective opt-in and opt-out tools that communicate with the advertising supply chain ecosystem and reliably honour consumer data preferences have become essential. IAB Canada launched an award-winning framework in 2023, supporting consent management platforms and ad tech vendors in complying with all Canadian privacy laws. This coincided with Quebec’s Law 25, which preceded the federal law.
Beyond the cookie
As the industry prepares for legal compliance, the technical landscape continues to evolve.
Since 2019, reliance on third-party data from cookies has steadily diminished, accelerated by Google Chrome’s announcement of plans to phase out cookie-based addressability by the end of this year. Despite a recent reversal on this plan, the shift is already well underway, and alternative solutions have taken root.
Identity solutions have become the latest shiny object in media, with numerous competing options emerging. Today, advertisers are required to maintain meticulous customer data records in compliance with international privacy laws. This data can then be activated using “clean rooms,” which anonymize datasets and prepare them for use across media channels. This method is gaining popularity as advertisers seek partners to help build scale and preserve personalized approaches, compensating for some of the lost capabilities, like retargeting and frequency capping, due to cookie deprecation. In response, IAB Tech Lab has focused on interoperability standards to mitigate the risk of fragmentation in a saturated identity market.
This trend clearly highlights the newfound importance of first-party data and the critical need to build trusted relationships with both customers and audiences. The outcome may have a positive effect on customer service quality, as brands focus on building trust and loyalty, and on media experiences, as publishers concentrate on creating engaging content and community-like memberships.
New ways of connecting
The industry is eyeing new opportunities as scale becomes increasingly strained due to signal loss and advertiser’s commit to avoiding questionable brand safety environments. For this reason, a lot of attention is now on 2 relatively new players in digital media: connected TV (CTV) and retail media networks (RMN). Both channels have captured the attention of marketers for different reasons, but both represent long-standing symbiotic relationships with advertisers.
CTV holds great promise as an evolved television play for advertisers. The ability to hyper-target audiences and create personalized ads in the engaging world of sight, sound and motion is appealing. With offerings from Roku, Samsung and LG, along with Canadian broadcasters like Rogers, Corus and Bell, plus new market entrants like Amazon Prime, scale appears to be available.
However, while inventory is plentiful, challenges remain in providing advertisers with assurances on measurement, unduplicated audience reach and true value. The fragmentation of measurement signals across platforms has long been a challenge. Open Measurement SDK (OM SDK) for CTV, developed by the IAB Tech Lab, has made significant strides in addressing this by offering a universal framework for measuring CTV-specific viewability signals. This includes TV off, device type and how long a user has been watching. Advertisers can now leverage these standardized measurements to ensure transparency and accountability in their campaigns.
RMNs allow brands to reach consumers through retailers’ digital properties, including websites, apps and in-store displays. Advertisers can also tap into the vast first-party data that retailers collect from customers’ in-store purchases and loyalty activity, providing brands with valuable insights for unique marketing opportunities. Retail media offers brands a new privacy-protected access point to lower-funnel activities, blending retail, data and media in a way that benefits both advertisers and retailers. According to a 2024 eMarketer and IAB Canada study of the retail media landscape, this channel is expected to grow to over $5 billion by 2027 in Canada.
Rising presence of AI
AI will serve as the foundational technology driving change in our infrastructure, suited to its strengths of processing massive amounts of data for machine learning and optimization. As advertisers develop marketing mix modelling (MMM) to measure the impact of marketing activities on sales and business outcomes, they will increasingly rely on AI’s computational power. Generative AI will also rise to meet the demands for hyper-segmented, personalized communications through dynamically optimized creative asset management.
Eighty per cent of IAB Canada members have already implemented AI within their organizations, reporting uses ranging from workflow improvements to creative execution. While concerns over AI’s potential impact on jobs persist, most industry players are confident that the human touch will remain vital in this evolving landscape.
Moving into the future
As we look to the future, a few key pillars stand out.
First, direct relationships – whether between brands and customers or publishers and media consumers – are essential. Trust and communication have never been more critical, especially in the upcoming explicit opt-in environment, where a single opt-out can have lasting consequences on audience reach.
Second, we must fully embrace privacy-first solutions. Adopting global standards and new approaches to audience engagement is vital for a sustainable future. Relying on single-market tactics risks regulatory pushback. Canada, however, has a unique opportunity to lead, with innovative homegrown solutions that prioritize global interoperability.
Lastly, we need to reflect on our evolving roles in this rapidly changing industry. In the coming years, we’ll need to justify our place in the ecosystem. It’s essential to use the tools at our disposal to elevate our work, which remains fundamentally about connecting people to people.
This is one of the most exciting and consequential moments for our industry, and we must continue to attract and welcome diverse talent to help realize the tremendous potential digital media and marketing offers the Canadian economy and its firm place on the global stage.