Adtech, walled gardens and Apple part 1: Why Apple’s DSP is a data goldmine

Data is the currency of the 21st century. Platforms like Google and Facebook make huge profits selling it to advertisers. Now, after crippling user tracking in a privacy push that cost The Big Four billions, Apple is entering the DSP game. Could their well-timed crackdown have been – gasp – deliberate?

Do you know how to manage a marketing campaign? 

Millennials grew up with marketing, and many non-technical founders come from sales or marketing backgrounds, so you may well be saying yes.

What about digital marketing? Slightly more complex, but another skill many entrepreneurs either invest time learning or have good instincts picking up.  

What about incrementality or dynamic creative optimization? This is where it gets more complicated. But thanks to Demand Side Platforms (DSPs), you don’t need to be a marketing boffin to utilise them, or a big brand to budget for them. 

Just set your desired spend, and the DSP deploys your campaign. 

DSPs are like targeted ads for dummies. They deliver the audience, provide market insights, identify trends, automate what would otherwise be vastly time-consuming manual ad campaigns, and let you know how it went afterwards so you can continually tweak and retarget. 

Most use AI to predict and adjust your budget in real time to maximise your ad efficiency. 

Data is the currency of the 21st century. Platforms like Google and Facebook own your data, and make huge profits selling it to advertisers in the form of DSP facilities. 

This highly lucrative exchange can only function with open access to user data (read: relaxed privacy controls), which platforms like Facebook and Instagram have enjoyed and profited from for years. 

But the DSP landscape is changing.

Those who keep up with tech will be aware of Apple’s huge privacy crackdown. 18 months ago, it asked Facebook users to opt in to user tracking. Many didn’t. 

Apple’s little “privacy heroes” play may have cost Facebook USD $12 billion by the end of 2022. YouTube could see a hit of $2.2 billion, Snap could lose $546 million, and Twitter $323 million.

Apple has very painstakingly and deliberately built a Trojan ecosystem, a “vast walled garden of connected products and Apple services”. 

It’s the perfect environment for a money-spinning DSP. And what better time to launch one than after a privacy push that crippled its direct competitors?

Apple is officially advertising for a team to “drive the design of the most privacy-forward, sophisticated demand side platform possible”. It’s rumoured Apple’s DSP placeholders will appear as two slots on the App Store’s Today page, where “paid-for slots will feature alongside editorialised content” and under the You Might Also Like tab on app pages.

The timing is, as the kids say, sus. 

What’s a DSP again? 

Demand Side Platform is one of those terms almost too dry to comprehend, but it is quite simple. A DSP is like a marketplace for ads. The platform is the seller, the advertiser is the buyer. 

DSPs allow advertisers to buy ads across different mediums (search engine banners, websites, social feeds) in different formats (video, mobile, animation) while targeting specific customers (age groups, locations, buying behaviour). 

DSPs have even entered the ‘real world’. Google is bringing the “best of digital technology to a traditional advertising medium”, in other words Out of Home (OOH), in other words, physical billboards, bus stops, and shop window displays. Things really do come full circle (except naturally, it’s a live screen instead of paper).

Next time you see that Optus ad on a tram stop, know it’s probably part of a coordinated campaign across search, social, and TV, too. DSPs enable advertisers to be truly everywhere potential customer eyeballs are. Noone is safe from the reaches of a well-coordinated campaign.

DSPs operate on a set bid price, using the data it’s collected to “choose” the best ad opportunities (known as “impressions”) for your campaign.

Amazon DSP, Google Ad Exchange, and Facebook Ads Manager are all examples. There are also omnichannel DSP managers like The Trade Desk, Knorex, and MediaMath, where you can deploy and track Google, Facebook, Instagram, and LinkedIn ads all in one. 

That’s the basic definition, but these platforms are sophisticated. They are also what brings the Facebooks and Googles of the world their stratospheric profits. 

The basic formula is: set up a social platform that gathers a load of data. Turn that data into a searchable database for advertisers. Then get advertisers to bid for ad space using that data. 

First to the party

Third-party data has a chequered history. 

It’s data companies obtain from other sources, rather than their own consenting customers. It’s obtained through third-party cookies, which Google did promise to phase out by 2022, and now the deadline is 2024. We wonder why. 

In the times before we had to click ‘allow’ or ‘reject’ on every page, websites were happily harvesting cookies (small files that log your details, location, and what you’re shopping for). 2018 GDPR regulations mean they need our permission, but every time you click ‘accept’, you’re consenting for your data to be harvested and possibly sold.

But consumers are savvy. In a growing spate of privacy health-kicks, many are saying no to cookies. And either way, third-party data is becoming less and less relevant. It’s much less reliable and complete than data a company harvests from its own users.

Legislation is tightening still. Continuing blows, like ​​California’s deployment of CPRA from January 2023, will further fortify the walls of DSPs who can offer that pure first-party stuff. 

This is why Apple is sitting on a data goldmine

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