Peter Jinfeng Pan, head of MediaGo

In the digital marketing world, advertisers should systematically assess each paid impression by considering the following five critical questions: Is this a real user? Will this user see the ad? What content does this user like? What is the user’s intention? How much value can this user bring?

These five questions form the backbone of the marketing funnel. If the answer is no or is uncertain, the advertiser should disregard that impression; otherwise, the investment is justified. However, while ad placement previously leveraged broad demographic data, the modern privacy-centric landscape has rendered these questions increasingly difficult to answer.

The key to addressing this challenge lies in shifting the focus from user data to optimizing ad experiences through deep learning.

Adopting an experience-centric approach refocuses ad placement on media, context, creatives and products — which inherently serve as signals rather than demographic data — making them key variables in optimizing advertising effectiveness. By training deep learning models on a vast array of signals, they can intelligently infer relationships between the input and output of data.

This means deep learning (DL) models can be relied on to address the five questions above in every impression auction. Records show that DL has evolved into a transformative technology, empowering advertisers to navigate complexity by analyzing vast datasets and identifying intricate patterns. This capability ensures unmatched precision and efficiency, even in an era increasingly shaped by privacy-first priorities.

Evolving from AI to machine learning to deep learning

Modern advertisers face countless media opportunities driven by diverse users with varied interests and intentions, akin to searching for the perfect match among countless screws and nuts in the ocean.

However, when confronted with that ocean challenge, traditional AI can only divide the ocean into regions, rely on human assistance to extract features and identify potential matches within each region.

DL, however, leverages deep neural networks trained on billions of data points, surpassing traditional AI and machine learning in computational capability. In just milliseconds, it can find the best match across the entire ocean, for example, offering unparalleled speed and precision in advertising.

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To borrow from David Mamet’s sleeper 80s film, Things Change, sometimes it’s the “guy behind the guy” who gets a little attention, even if the guy doesn’t necessarily want it. So it is with Siberia, an independent design studio/agency based in New York that does the behind-the-scenes legwork to help clients refresh their brands and digital presences. The firm works with a variety of clients, including Ford, Comcast and Bloomberg, but shared work it’s done for a newer client.

The James Beard Foundation (JBF) — a venerable name for anyone interested in food, be they chefs, restaurateurs, philanthropies or gourmand consumers, issued an RFP for a website and a rebrand. The organization ultimately turned to Siberia to grow its audience and bring food lovers into the equation in a bigger way. Starting in November and just finishing this week, the James Beard Foundation (JBF) altered more than just its color palette and web architecture. The financial terms of the agreement were not made available.

Chris Mele, Siberia’s managing partner and founder, operates on a simple principle: don’t lead with tech — it should underpin what an agency does for a client, but not be the core or rallying point. And with JBF, that thinking came very much in handy. 

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As programmatic advertising spend continues to surge, reaching a projected $180 billion by 2025 in the U.S. alone, the industry faces mounting challenges around efficiency and scale. 

Between 2020 to 2023, the number of bidstream requests between DSPs and SSPs has increased by 2.3 times, far outpacing actual inventory growth. This surge, driven by the proliferation of SSPs, ad tech intermediaries and increased header bidding adoption, has created a complex supply chain rife with inefficiencies, impacting everyone from brands and agencies to DSPs and SSPs.

These inefficiencies manifest in wasted ad spend due to duplicate bid requests, reduced campaign performance from suboptimal inventory matching, strained technical infrastructure and increased operational costs and difficulty achieving campaign goals due to inconsistent access to desired audiences. Meanwhile, DSPs and SSPs face growing processing overhead as they manage an ever-increasing volume of bid requests, some of which never result in delivered impressions. 

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The creator economy is still growing rapidly but that growth isn’t always a benefit to creators.

It’s already difficult to maintain a living as a full-time creator — even more so in recent years as new creators continue to flood the market. An estimated 3% of the U.S. population in 2022 was considered an influencer, up from about 2% in 2020, per influencer marketing platform Influencity — with places like New York (6.45% of its population considered an influencer) and California (5.42% of its population considered an influencer) leading in influencer density in the state.

Meanwhile, influencer agency Neoreach found that only around 15% of 2,000 creators surveyed in 2023 made more than $100,000 per year, and about 69% made less than $50,000 annually. Some 48% made less than $15,000 per year, per the company’s data. Given the competitive landscape as well as an uncertain economic market and the stability of platforms like TikTok, some creators are considering re-joining the traditional workforce for more stability.

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The number of retailers launching their own media, commerce, financial, travel (you get the point) networks continues to grow. At this point, more than 250 retail media networks exist globally, according to retail media intelligence platform Mimbi, and they’re all fighting for the same ad dollars.

To better compete, retail marketing networks have spent the past few months rebranding their names and logos, hosting events and retooling their offerings. At the same time, RMNs are moving beyond on-site search and display ad opportunities and opening up ad formats with creators and streaming services. All signs point to retail media networks wanting to be seen as all out media networks, according to the five RMN agency experts Digiday spoke with for this piece.

Related Insights

Retail Revolution

In the pitch for brand dollars, retail media networks turn to creators Read More

Last March, The Home Depot rebranded its retail media network Retail Media+ to Orange Apron Media at its inaugural infronts presentation (its response to upfront negotiations). Home Depot plans to host the second installment of its infronts presentation this year. Lowe’s made a similar move in August, rebranding from Lowe’s One Roof Media Network to Lowe’s Media Network and debuting a new logo with beefed up channels, like email and in-store audio.

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Independent agencies have discovered their latest edge over the big guys: better tech. 

They’re hiring CTOs, spinning up their own tech platforms, even reselling third-party tech they don’t own. Forget scale and leverage — the indie pitch now is agility, innovation and a tech playbook nimble enough to charm advertisers who don’t need (or want) the big agency industrial complex.

“If I were starting an agency tomorrow then one of the first roles I’d hire would be a chief technology officer,” said Robin Skidmore, founder and CEO of performance marketing agency Journey Further.

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The cost of ad space on streaming platforms has been dragged down in the last year, as early movers Netflix and Disney+ raced to keep up with Amazon’s aggressive pricing.

Now, the cost-per-thousand viewers (CPM) across those three streamers hovers between $38 to $40 (down from Netflix’s 2022 price of $60), low enough that small to medium business (SMB) advertisers can begin to consider them a viable alternative to local cable or regional linear TV.

Related Insights

The Programmatic Marketer

Streaming TV ad rates are falling and Amazon’s the anchor Read More

Consider the example of Naturepedic, a premium mattress and sleepwear brand based in Cleveland, Ohio.

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This week’s Media Briefing looks at the different standalone newsletter subscriptions publishers are using to convert more readers to pay up for content.

• Publishers’ standalone paid newsletter offerings are helping to attract new subscribers.

• Amazon is testing a program to pay publishers for traffic, YouTube hits 1 billion monthly podcast listeners and more.

Standalone newsletter subscriptions help convert more readers

Publishers are using different kinds of standalone newsletter subscriptions to grow revenue and, in some cases, offer lower priced tiers to see if they can convert readers around popular products without the financial commitment to the more expensive full digital subscription.

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This Tactics + Insights guide, sponsored by Vistar Media, explores the opportunities that arise from integrating branding and performance marketing channels. As part of this report, Digiday and Vistar Media surveyed 113 marketing professionals to learn more about how they balance and prioritize budgets and objectives across both approaches.

Marketers face constant pressure to build brand recognition while driving bottom-line results. However, branding and performance goals are typically executed through separate campaigns and distinct strategies, escalating costs and leading to missed opportunities for optimization and cross-channel synergy.

This challenge is evident in a survey of 113 marketing professionals conducted by Digiday and Vistar Media. When asked about the biggest obstacles to achieving their marketing goals, the top responses were cost restrictions and siloed data operations.

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This week’s Future of TV Briefing looks at the rise in sports-related content across streaming services as ESPN surrenders some sports rights.

• Streaming’s moneyball era
• YouTube’s subscription-lite plan, Disney’s and Warner Bros. Discovery’s bundle boost and more

Streaming’s moneyball era

Bleh. It’s definitely trite to describe the state of streaming businesses as being in the “moneyball” era. But it’s true (and I couldn’t think of a more original framing device).

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Commerce media is having a moment — and with a market expected to exceed $112 billion in 2025, according to the Winterberry Group, it’s easy to see why. But people keep mixing up retail media and connected commerce, casually swapping one buzzword for the other. They share some DNA, but conflating them is like mistaking the cashier for the entire store.

Here’s why commerce media is its own beast, and how marketers are finally waking up to it. 

What is connected commerce?

Connected commerce is the holy grail of seamless shopping, blending online and offline experiences so shoppers can browse and buy wherever they are. Think of it as a fully integrated ecosystem: tying together everything happening on the retailer’s site or app with the behind-the-scenes data and tech driving transactions, then layering that into the in-store experience right down to the cooler screens and promotional offers.

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Away from headlines discussing the fissures between government and Big Tech, particularly those with a trans-Atlantic bent, representatives of the digital ad industry are attempting to woo policymakers by underlining their economic impact on the region.

Google is poised to face fresh charges, this time for breaching the EU’s Digital Markets Act. The news comes hot on the heels of antitrust authorities in Germany investigating Apple’s App Tracking Transparency (ATT) framework. Both investigations’ primary concern is whether Apple and Google’s policies favor their own technologies over those of third parties. 

In Germany, authorities have asked if Apple’s ATT treats third-party data differently from its own, granting itself advantages in the ad market while enforcing stricter restrictions on competitors. Meanwhile, the pan-European investigation will reportedly probe if it favors its vertical search engines, such as Google Shopping, Google Flights, and Google Hotels, over rivals.

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Podcast subscription businesses are maturing. As podcasters continue to develop this revenue stream, they face a challenge that publishers have grappled with for years: churn.

It was a topic that came up at last week’s On Air Fest podcast business summit. More podcast subscription offerings are hitting annual milestones, meaning more data is coming in, and podcasters can start tracking how many subscribers they’re able to retain year over year.

Churn is “certainly becoming an increasing priority, particularly for some of our longer-lived subscriptions,” said David Stern, founder and CEO at Supporting Cast, Slate Group’s podcast subscription hosting business.

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Liner, a South Korean AI search engine, has been testing ads in the U.S. and Europe using a traditional cost-per-click model. But unlike Perplexity, which is working to attract advertisers with a cost-per-mille (CPM) model, Liner thinks CPC is more measurable.

The company is testing three formats: ads that show up above and below an AI-generated answer and another ad format called “generative ads” that shows up within an answer. Tests for ads began last year in the U.S., with generated ad tests since earlier this year.

“We had this kind of hypothesis,” Liner founder and CEO Luke Kim told Digiday. “In digital ads, there are search ads and display ads. Search ads are a good business because the conversion rate is high. Display ads are a good business because it has a lot of impressions and a lot of views because you can put banners anywhere. Maybe we can create some kind of third category, which is AI search ads.”

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There’s been no shortage of headlines in the last year detailing how X (formerly Twitter), under current owner Elon Musk and CEO Linda Yaccarino, has had a fraught relationship with the advertising industry — sometimes resulting in legal swings taken at some of its players. 

Market research firm Forrester on Tuesday issued guidance to its clients on how advertisers ought to handle the pressures exerted by X, in a blog post authored by analysts Jay Pattisall and Kelsey Chickering. Titled “X-tortion: How Advertisers Are Losing Control Of Media Choice,” the analysts recommend three steps advertisers should take to maintain as much control in any such situation: 

• Lean into non-binding advertising commitments with X
• Explore principal media solutions for X upfront deals
• Require X to meet media performance thresholds

Pattisall said the post is meant to help with efforts advertisers have already put to work. “My understanding is that many advertisers and agencies have been quietly working in this direction,” he told Digiday. “So anything that we’re recommending is not to contradict that, but rather to support that.”

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Tina Iannacchino, vp of publisher partnerships, North America, Seedtag

As consumers shift from traditional cable to on-demand streaming services, advertisers can reach and engage targeted audiences more effectively than previously possible. However, the challenges of disparate log-level data and inconsistent data-sharing practices have stymied the potential of CTV. To fully unlock the power of CTV, stakeholders must embrace a more unified approach to data sharing and integration.

CTV advertising provides vast optimization, but only when data is shared effectively

The growth of CTV presents significant opportunities for advertisers, particularly in terms of economies of scale and attention. Advertisers can optimize their reach and efficiency by locating audiences across multiple types of inventory within the CTV ecosystem. However, this is only possible if data is shared effectively across platforms — the industry should create a standard to ensure this becomes the case. 

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In the midst of the retail media network boom over the past two years, retailers including Walmart, Amazon and Target, have increasingly started trying to monetize their creator networks and affiliate programs, according to six agency retail media executives Digiday spoke with for this piece. RMN execs see those monetization efforts as a play to take in more ad revenue, especially the brand marketing dollars retailers have spent the last year vying for.

These tactics are formalizing their respective influencer programs as the demand for influencer marketing grows — even as RMNs still face challenges in incremental measurement. Notably, influencer marketing has become a vital part of the media mix with marketing spend in the U.S. influencer marketing ecosystem expected to reach $9.29 billion this year, per eMarketer.

“The impact creators and influencers are having on marketing strategies can’t be ignored, and retail media networks are well aware of the potential,” David MacDonald, evp and head of retail and commerce experience at marketing agency Razorfish, said in an emailed statement to Digiday.

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Despite all the fragmentation in the space, despite the political uncertainty, despite the inconsistent and ever-changing algorithms, social media remains an irreplaceable piece of brands’ and retailers’ marketing strategies. And within those strategies, Meta’s Facebook and Instagram platforms remain the examples of social marketing success.

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Two years after YouTube launched the YouTube Shorts revenue share program in February 2023, creators are finding that their payouts for short-form content are still dwarfed by the ad revenue they can glean from long-form videos.

Six creators who have traditionally focused on long-form content told Digiday that their RPMs (revenue earned per 1,000 views) for YouTube Shorts were consistently beneath $0.20, compared to average RPMs of between $3 and $6 for their long-form content. It’s worth noting that long-form YouTube videos can carry multiple ads, which would help to boost a video’s RPM, whereas YouTube Shorts revenue is shared among creators based on viewership.

“This month, I had an idea for a long-form video, worked on it all night, and after being live for one week, it had made more money than an entire months’ worth of shorts,” said the “Magic: The Gathering” video creator Maldhound, who asked to keep his real name private to protect his personal information. He told Digiday that his average RPM for 20-to-30-minute long-form videos was roughly $5.50, compared to an average RPM of $0.18 for Shorts.

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Subscribe: Apple Podcasts • Spotify

In January, the U.S. Federal Trade Commission finalized an updated version of the Children’s Online Privacy Protection Act. And for as much attention as the update may have received, it probably merits more.

“It is a big deal. And I think because there’s been so much other activity in the news, people haven’t really paid attention to it,” Debbie Reynolds, a privacy expert and founder, CEO and chief data privacy officer at Debbie Reynolds Consulting, said on the latest Digiday Podcast episode.

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