Dive Brief:

• With 95% of surveyed marketing industry professionals expecting continued privacy legislation and signal loss in the future, the need for a privacy-first approach is becoming more urgent, according to the new “State of Data 2024: How the Digital Ad Industry Is Adapting to the Privacy-by-Design Ecosystem” report from the IAB.
• The evolving privacy landscape is driving organizational changes, with 82% of those surveyed saying the makeup of their organizations has been impacted by signal loss. Approximately three-quarters expect their ability to collect consumer data will continue to degrade.
• Another key finding is that 90% of ad buyers are shifting personalization tactics as a result of increased privacy legislation and signal loss, with ad budgets increasingly allocated to channels that can leverage first-party data, such as CTV, retail media and social media. 

Dive Insight:

As states regulate the space more tightly and Google continues its phase-out of third-party cookies, the data landscape faces increasing uncertainty, with 2024 potentially a turning point for privacy-first marketing strategies. Among those surveyed for the IAB report, 64% expect the number of states passing privacy laws to increase this year and 66% expect a reduction in their ability to deliver personalized messaging in states with privacy laws. Marketers navigating this new landscape must decide where and how to invest going forward.

“The meaningful investments being made are proof positive of the industry’s commitment to a privacy-first orientation,” said David Cohen, CEO at IAB, in a statement. “Executives are taking notice and funding the right initiatives for the next stage of industry growth.”

The report is based on a survey of over 500 marketing personnel conducted by IAB and BWG Strategy between November 2023 and February 2024.

Data quality is a key focus of the report, with 72% of those surveyed expecting their ability to access browser history and real-time signals to be reduced, while 61% expect it will become harder to collect third-party data points.

The uncertainty around third-party data has increased reliance on first-party data, with 71% of brands, agencies and publishers expected to increase their first party datasets, nearly twice the rate of just two years ago. The types of first-party data being collected by companies include contact info (84%), device (81%), transactions (73%), content consumption (70%) and location (69%).

One challenge marketers are likely to face as they focus more on first-party data is a lack of interoperability between key first-party data channels like CTV, retail media and social media, making it harder to assess effectiveness.

Respondents indicated they expect measurement to be a casualty of the changing privacy landscape. Over half (57%) of those surveyed believe it will be harder to capture reach and frequency while 73% believe their ability to attribute campaigns, track performance and measure ROI will be reduced.

In 2024, 54% of those surveyed will increase their ad spend on CTV due to privacy legislation and signal loss. Other channels being eyed by marketers are influencer marketing, with 52% expecting to increase spend, paid search (51%), social media (50%) and retail media (47%).

The focus on privacy could benefit big companies, which are better able to invest in new data processes compared to small and medium-sized publishers. Large companies are investing in identity anonymization training at a rate of 79% compared to 64% for small companies, per the report. Additionally, 62% of large companies have invested in privacy preserving technologies, compared to just 44% of small companies. Such tools can cost over $2 million a year, a price many small firms cannot afford.