AI IN MARKETING - CURSE OR BLESSING? - IMPACTS OF PROGRAMMATIC ADVERTISING AND PERSONALIZED CONTENT ON SOCIETY - DIVA PORTAL
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DEGREE PROJECT IN TECHNOLOGY AND MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2021 AI in Marketing – Curse or Blessing? Impacts of Programmatic Advertising and Personalized Content on Society CHRISTOPHER KLEE KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF ELECTRICAL ENGINEERING AND COMPUTER SCIENCE
AI in Marketing – Curse or Blessing?
Impacts of Programmatic Advertising and Personalized Content on Society
Christopher Klee
KTH Royal Institute of Technology
Stockholm, Sweden
caklee@kth.se
ABSTRACT specifikt utformade för just dem. Användningen av
English underliggande användardata ger upphov till etiska
With the help of Programmatic Advertising and the dilemman. Således, har vi följande
resulting personalized content, consumers can be problemformulering: Hur påverkar programmatisk
targeted precisely and with the help of Artificial reklam användarnas data och åsikter, och vilken effekt
Intelligence. The associated use of customer data har detta på den fortsatta utvecklingen av området?
creates ethical conflicts. Therefore, the research Med avsikt att vidareutveckla problemformuleringen
question is asked: How does Programmatic utfördes expertintervjuer samt en litteraturstudie.
Advertising influence consumer's data security and Analysen visar att programmatisk reklam utgör
diversity of opinion and what effect does this have on majoriteten av all digital marknadsföring. Detta har
the further development of the technology? For the resulterat i fördelar för marknadsförare, ty användarna
purpose of elaborating the research problem a kan bli bemötta mer precist. Icke desto mindre,
literature analysis and expert interviews are carried medför detta legala problem relaterat till användardata
out. The analysis shows that Programmatic och ett ökat kraf av dataskydd för användaren, vilket
Advertising has already taken up the majority of är något som får stort fokus av stora tech företag. På
digital advertising activities. This results in grund av den konstanta utvecklingen av denna metod,
advantages for advertisers, since consumers can be föds nya möjligheter, exempelvis "kontextuell riktad
addressed in a targeted manner. Nevertheless, this marknadsföring", för att fortsätta vara en effektiv
provokes data law issues and the demand for more marknadsföringsmetod. Därmed, redogör denna
data security for the individual customer, which, rapport för en mer reglerad spelplan där användarna
among other things, is given more attention by big får en bättre överblick och kontroll över hur deras
tech companies. Due to the constant change within användardata utnyttjas, samt en mindre inskränkt
this trend, new possibilities arise, such as contextual åsiktspåverkan, vilket är något som skulle kunna ske
targeting, in order to continue to do an efficient genom knappnålsfin riktad marknadsföring. Dock är
display of advertising. Nonetheless, this work calls for utvecklingen för programmatisk reklam förutspådd
more regulations to be able to give customers a better ljus, då andra områden inom medielandskapet
overview and control of their used data and to avoid kommer att genomsyras av denna teknologi i
restricted diversities of opinion, which can be framtiden.
promoted through microtargeting and therefore the Author Keywords
addressed display of content. The prospects of programmatic advertising, personalization, ethics,
Programmatic Advertising, however, are predicted digital marketing, artificial intelligence, big data,
with a steady increase because other areas within the privacy, filter bubble, diversity of opinion,
media landscape will be pervaded by this technology automation, real-time bidding, machine learning.
in the future.
CCS CONCEPTS
Swedish • Information systems~World Wide Web~Online
Med hjälp av programmatisk reklam och artificiell advertising~Display advertising
intelligens får kunder och individer reklam som ärINTRODUCTION This results in great advantages for advertisers
Programmatic Advertising represents digital compared to traditional marketing methods. The
advertising that is bought and sold automatically using extensive amount of internet data can be used to better
data, algorithms and software [12]. With the help of target people. This also allows advertisers to act much
this technology, it is possible to use large amounts of more efficiently. The customers are tracked on their
data in order to address target groups and customers way through the internet with the help and use of
with personalized content in the field of digital cookies, whereby a customer journey can be created.
marketing [2]. This multi-billion-dollar market This happens automatically with the help of machine
enables the possibility to play out relevant learning, Artificial Intelligence and geolocation
advertisements digitally precisely to the appropriate technology [13]. However, the economic advantage
customer in real-time [20]. that this creates for companies is also subject to
Technically, Programmatic Advertising works in such criticism.
a way that web publishers invite various organizations In the following literature research, it can be found
to take part in a bidding process for an advertising that the urge of users for data protection and the fear
space on the platform. The actual bidding is then of data misuse is increasing. With the help of tools
carried out by demand-side platforms, which, with the such as ad blockers, the deletion of cookies or the use
help of data management platforms that have collected of the incognito mode in the browser, it is made more
user data, can recognize and analyze how well the difficult for advertisers to place targeted advertising
user fits with the respective digital advertising. On the for the respective customers. For this reason, the
basis of this data, it can then be calculated if it is following thesis aims to highlight the perspectives that
worth bidding on the advertising space and how much the technology around Programmatic Advertising will
the space is worth to reach the customer. The bidder have in the future and what influence this will have on
with the highest offer is automatically awarded the the data security and the variety of opinions of the
advertising space [14]. In 2019, the programmatic individual user.
buying process of advertisements accounts for more
This work focuses on the research question: How does
than 60% of the expenditure for digital advertising
Programmatic Advertising influence consumer's data
worldwide [17].
security and diversity of opinion and what effect does
The Programmatic Advertising approach is based on this have on the further development of the
an Artificial Intelligence structure. Artificial technology?
Intelligence (AI) represents a system that has the
The main contributions of this work include: (i) the
ability to correctly interpret external data, to learn
relationship to consumer’s data security and privacy
from it and to achieve further goals. In the case of
when using Programmatic Advertising; (ii) an
Programmatic Advertising, AI can improve the
assessment of the risk of restricted diversity of
effectiveness of advertising and thus increase media
opinion; (iii) the perspectives for the technology
revenue and improve the satisfaction of customer
considering the points of criticism.
needs [8].
RELATED WORK
100% With the help of a literature research, various factors
80% related to the digital marketing trend of Programmatic
60% Advertising are to be compiled. Various trends and
40%
risks can be identified, which should be checked for
topicality in the following expert interviews. The
20%
analysis of the technology will be classified into three
0% areas. The data security and privacy issues for users,
the influence on the diversity of opinion in society as
well as the prospects and risks for Programmatic
Figure 1. Programmatic Share of Global Digital Display Ad Advertising.
Spend (2012-2021), own illustration based on Zenith [21].Privacy and Data Protection But it is not just users who (should) question the
The use of customer data has moved even more into processing of data for targeted marketing and
focus with the introduction of the General Data Programmatic Advertising. It is noticeable that there
Protection Regulation (GDPR) in 2018. For example, are developments in data security among the world's
customers have the option of actively consenting to largest technology groups (also known as GAFA, for
the use of cookies and other technologies for Google, Apple, Facebook and Amazon). In March
processing personal data or rejecting them when they 2021, Google announced that they would discontinue
visit a website [10]. Palos-Sanchez et al. therefore the support for third-party cookies within their
assume that increasing and improving Programmatic Chrome browser. This is to ensure that individual
Advertising activities can of course also increase users can no longer be tracked and identified for
effectiveness and income. On the other hand, this can advertising measures. A study by the Pew Research
also ensure that the privacy concerns of customers rise Center found that 72% of respondents think that
as a result. Compared to traditional marketing almost everything they do online is tracked by
measures, in which advertisements are generated on advertisers or technology companies. In addition, 81%
websites without the support of customer data, see that by collecting data, the benefits no longer
personalized targeting is dependent on geographical, outweigh the risks of data misuse. For this reason,
demographic or psychographic information, which is Google wants to ban third-party cookies and thus
collected from the respective user with the help of tracking methods created by domains other than the
cookies. With the search history or website one the user is visiting. With these cookies it is
navigation, a clear picture and a customer journey can possible to operate cross-site tracking across many
be created. However, it should not be neglected that websites and thus create a customer journey of the
customers can also be pleased with personalized user. In contrast to this, there are first-party cookies
content. Nevertheless, Palos-Sanchez et al. found that which are saved by the domain the user is currently
many users lack the knowledge about which on. These are required, for example, to collect
information and data collected from them were used analytics data or to save language settings and use
for marketing purposes. In their study, the researchers them again as soon as the user comes back to the
found that companies and advertisers should make respective page. As an alternative, Google would like
sure that Programmatic Advertising does not ensure to give advertisers the opportunity to use so-called
that customers' concerns about data misuse are FLoC (Federated Learning of Cohorts) to address a
increased, which in turn can lead to a slump in larger group of people with the same interests and thus
revenue from this technology [13]. hide the individual user within these cohorts [19].
According to Coeckelbergh, the ethical use of AI and At the same time, critics point out that advertisers are
thus also AI-supported technologies such as finding or are already using other methods in order to
Programmatic Advertising would require that be able to continue to track individual users. With the
customer data is collected and evaluated with respect invasive technology called fingerprinting, companies
for the privacy of every individual. Users should use certain features such as fonts used, computer IDs,
therefore know what happens to their data and how it connected Bluetooth devices, etc. in order to be able
is processed further or passed on to third parties. With to identify customers without using tracking measures
a view to social media, users give their consent to the like third-party cookies [3].
processing of their data, but they are often not aware
Another current example of a change of direction in
that these networks sell the data to other companies in
digital marketing is the announcement by the
order to create a clear picture of a customer to play out
technology company Apple, which has introduced a
personalized advertising supported through AI.
new privacy tool with the latest version of their iOS
Researchers in critical theory complain that users are
operating system. The "App Tracking Transparency"
doing free labor with the production of data for
ensures that the individual user can decide whether
companies. As a result, users generate data for the AI,
customer information can be shared with third parties
which in turn analyzes the data and thus generates
such as advertisers. If the customer does not give his
profit for companies [4].consent, trackers within different apps can no longer would like to see [1]. It can be assumed that content
read the customer-specific data and subsequently that is placed based on the interests of the respective
cannot display personalized advertising on their and user, e.g. advertising or other content, is clicked more
on other apps that work with the same ad-tech firms often and thus generates more revenue than content
[3]. that is not desired by the respective user or does not
correspond to his or her interests.
It shows that after the introduction of the new
operating system at the end of April 2021, only 12% For this reason, there is a risk that the use of
worldwide and only 4% in the US have given their algorithmic technology, as in Programmatic
consent for tracking [11]. It should be noted, however, Advertising, creates audiences in which the respective
that Apple users will continue to receive advertising user is always shown content that supports his or her
on platforms such as Facebook etc. with the new iOS opinion, as this can trigger a high level of willingness
version. However, these are no longer personalized by to click [5]. With this type of microtargeting, users
the unique device identifier. The question arises to can be shown very precise content that they want to
what extent ad-tech companies or companies that are see. However, there is also the risk that other opinions
dependent on this specific targeting will suffer will disappear from the user's field of vision, creating
economic damage from it. For this reason, the social a filter bubble in which the user thinks that his opinion
media network Facebook started a campaign to point is the right one and that he has many allies around
out that Apple's measures will harm smaller him. This phenomenon can be seen in political
companies [7]. It should be noted that Facebook is one content. To exemplify, if a right-wing populist or
of the companies most affected by this regulation, as conspiracy theorist is only shown content that fits his
their business model thrives on the concept of worldview and no alternatives are offered, he will
personalized advertising and the exchange of continue to be convinced of these opinions.
customer data with other companies [3].
Coeckelbergh evaluates the situation even more
It turns out that the handling of user data and the drastically and fears that users could become
associated data security have become more important. "smartphone cattle milked for data". It is not only
On this occasion, the increasing importance of data possible to efficiently place advertising with the help
ethics arises from two factors. On the one hand, the of Programmatic Advertising and AI. Rather, the
concentrated market power of a few tech giants technology can also be used to spread political
ensures that they control a massive amount of campaigns [4]. Last but not least, the case of
consumer data and, on the other hand, the concern Cambridge Analytica showed that user data was used
about how the data is collected and used is becoming without consent to support the 2016 US presidential
increasingly important [9]. election. The collected data can be used to find out
political preferences and, if necessary, to influence
In five to 10 years demand for the ethical
them with targeted content [13].
treatment of customer data will intensify as
consumer trust decreases. To win back consumer For this reason, several AI experts recommend that the
trust, marketers must talk about customer data spread of dis- and misinformation can be tackled if
ethics and demonstrate, in transparent ways, algorithms and microtargeting, as is carried out in
their commitment to be more than legally Programmatic Advertising, are more strictly regulated
compliant. - Mike McGuire, vice president [15].
analyst in Gartner’s Marketing practice [9].
A ban on microtargeting would work. We
Microtargeting vs. Diversity of Opinion strongly recommend [the] European Commission
Not only worrying about the own data plays an to regulate Facebook, regulate algorithms so that
important role when using technology supported by they do not microtarget based on creating small
Artificial Intelligence. Likewise, the risk of a so-called information bubbles that fragment, atomize and
"filter bubble" should not be underestimated. This divide our societies. - Frantisek Vrabel from
refers to websites or social networks that try to Semantic Visions in the Czech Republic [15].
algorithmically predict which information the userThis would enable false information to be better could set themselves apart from each other. This leads
regulated, since direct marketing would take place to a 'bid war' and thus a decreasing return on
again between media outlets and advertisers. In the investment (ROI) [20].
anonymity of Programmatic Advertising, however, it
It can also be assumed that fraudulent traffic can result
is feasible that content will lead to polarization or
in costs for advertisers. Bots can generate clicks for
does not offer a wide variety of opinions, since the
advertising, which, however, was not viewed or used
customer will only see the personalized point of
by real people. Programmatic Advertising platforms
view [15].
must therefore ensure that mechanisms are developed
Perspectives for Programmatic Advertising to prevent false traffic from bots. Likewise, the area of
It can be stated that, in addition to its financial data ethics plays an important role in the future of
advantages for advertisers, the technology also brings Programmatic Advertising. On the one hand, more
criticism and disadvantages with it. For this reason, and more user data is required to improve the
several theories have attempted to assess what effectiveness of digital ads. This in turn raises
perspectives the technology around Programmatic concerns among users about their digital privacy [20].
Advertising will have.
In conclusion, White & Samuel state that the ethical
White & Samuel state that the technology has limits and the increasing importance of data security
fundamentally changed the type of digital advertising will be more important for the individual customer
and is also able to sustainably reduce the costs and and therefore also more important for the
risks of advertising. However, the technology is faced Programmatic Advertising technology, which is based
with several risks. For example, the aforementioned on data collections and evaluations with the help of
ad blocker technologies ensure that the effectiveness machine learning, algorithms and Artificial
of Programmatic Advertising is limited. To prevent Intelligence [20].
this trend, companies are trying to develop methods to
Since the perspectives of the technology are to be
circumvent or combat ad blockers. For example, on
worked out within this thesis, the hype cycle of the US
some websites users will get a message that it is not
market research company Gartner can be used for this.
possible to use the website with an active ad blocker
The Hype Cycle model by Gartner Inc. describes the
[20].
path of a technology in terms of expectations or
Trade groups such as the Internet Advertising Bureau visibility of the value. If a technology starts to hype,
(IAB) state that ad blocking would on the one hand be many companies follow the trend instead of critically
equated with robbery, but on the other hand it should examining the potential. Because of that, it can
also be a wake-up call for all advertisers, since this happen that the hype suddenly dies down and the
also makes the problem of advertising clear and that it bubble bursts [6].
probably must become more effective so that it is no
longer blocked by the user [18].
In addition, there have been several cases in which
company advertisements have been displayed, for
example on sites with right-wing extremist material,
automatically placing the advertising company in a
wrong position. As early as 2019, the researchers
presented various tensions and scenarios of how
Programmatic Advertising could develop in the future.
It is therefore conceivable that better and more
suitable algorithms will be developed over the course
of time, which will produce an almost perfect result
for the respective customer. Should this scenario
occur, there is no longer an advantage with which the
competitors in the Programmatic Advertising industry Figure 2. Hype Cycle for Digital Marketing, 2020 [9].If Gartner's Hype Cycle is considered for perspectives of the technology. The interview was
Programmatic Advertising, White & Samuel conducted using email communication and took place
suspected in 2019 that the Programmatic Advertising between April 30 and May 11, 2021.
market has reached the point of 'peak expectation' and RESULTS
will be faced with the 'trough of disillusionment’ in
the future [20]. In order to be able to assess the current Gartner’s Hype Cycle
developments around Programmatic Advertising, As early as 2016, Seitz emphasized that every
experts will evaluate the situation in the following. technology follows a traditional Hype Cycle by
First of all, it should also be clarified to what extent Gartner, as already mentioned in the literature study
the technology has now developed and at what point [16].
in the Hype Cycle Programmatic Advertising is In the interview conducted, Seitz had the opportunity
currently. to reassess the current state of the technology. It can
METHODS be seen that Programmatic Advertising is currently in
In the previous literature study, various influences and the phase of continuous ascent. This means that the
risks for the technology trend around Programmatic ‘trough of disillusionment’ and thus the collapse of
Advertising could be highlighted. In order to be able expectations is already over. This can be seen, among
to check whether current developments differ from other things, from the fact that companies with large
those within the theory and what perspectives can be market shares in the Programmatic Advertising sector
identified for the technology, expert interviews have (Google, Facebook and Amazon) have recently shown
been conducted. The present work should thus receive record quarterly figures. In addition, as already
the added value that the developed influences on the mentioned, the technology related to Programmatic
technology can be re-assessed by experts. Advertising has the largest share within digital
advertising.
The qualitative research method is carried out with the
help of video and email interviews. An academic According to Seitz, there are also doubters on the
expert in the field of Programmatic Advertising was market who claim that the current tracking discussion
interviewed. Prof. Dr. Jürgen Seitz is a professor at and the decisions of big corporations like Google or
the University of Media in Stuttgart, Germany and Apple are about to cause the technology to crash.
specializes in topics related to digital business and However, Seitz does not see any danger, as the
digital marketing. In his professional career he worked potential in the field of video, among other areas,
at Microsoft and for the United Internet Group, most provides the technology with further opportunities for
recently as Managing Director of United Internet advancement. Seitz assumes that the disappointment
Dialog GmbH. In the latter, he was able to gain phase has ended, and the technology has now
knowledge as a pioneer in matters of Programmatic established itself on the market.
Advertising in Germany and is therefore predestined Data Protection vs. Market Power
to give his assessments of current developments. The Lately, big companies like Apple or Google have
30-minute interview was carried out via the video made headlines on privacy issues. As already
conference platform "Zoom" on May 4th, 2021. mentioned, Apple has integrated consent to tracking in
Another interview was carried out with Qian Ye, who its mobile operating system, which in turn prohibits
worked as Senior Media Activation Manager personalized advertising in the event of rejection. In
(Programmatic) for Essence in Singapore, a global addition, Google plans to stop using tools to track data
data and measurement-driven media agency, until in its browser in the future, which practically stops
April 2021. Since Ye recently left the company, all creating customer journeys and personalized content
opinions expressed do not necessarily represent that of with the help of third-party cookies.
the organization and are the opinions of Ye. Through Seitz does not assume that the companies will do more
her experience in the work environment of for data protection. Rather, these are phases to
Programmatic Advertising, Ye can offer a consolidate the own market power. Due to its
professional insight into the influences and relevance within society, companies have recognizedthat they can gain market share with data protection. The Renaissance of Contextual Targeting
Thus, on the one hand, Apple's strategy represents the To counteract this trend among large corporations,
stop of tracking for apps, on the other hand, the advertisers are already looking for alternatives. Due to
company can differentiate itself on the market and regulations and measures for more data security,
give customers the feeling that their data is safe within contextual targeting has recently been of greater
the Apple ecosystem. Nevertheless, these measures importance. Ye states that the image of Programmatic
represent an improvement in the data security of an Advertising, that it would only offer itself for
individual customer. personalized content, has to change. It is clear that
audience data is of course a core competence within
As already found out in the literature study, users are
the technology. However, it is important to look at
often not aware of what happens to their data when
other data points that are important for targeted
they give their consent to processing, whether on a
advertising. For example, the aforementioned cookies
website or in social media networks. Against this
or the device ID blocked by Apple are not absolutely
background, Seitz questions whether the topic of data
necessary for the display of advertising. In doing so,
ethics has really become more important to users.
she refers to contextual data, a phenomenon that is
Rather, it is all about trust. If the user trusts a
slowly reestablishing itself on the market. Displaying
company, he also will do the trade-off and share his
advertisements on relevant websites (e.g.
data. If he doesn't trust a company, whether it is
advertisement for a food-related advertiser on a page
because of negative headlines or own bad experiences,
for restaurants or recipes) is a good way to connect
he will prefer not to share his data. However, what
with users without needing further specific
bothers users the most is the display of irrelevant
information about the user.
advertisements or inaccurate retargeting, according to
Seitz. Thus, the industry would currently experience a shift
and in addition to the collection and evaluation of
Large companies like Apple and Google are thus
third-party cookies, it will be more important to work
setting an example for data protection - if only to gain
with data owned by advertisers and their partners.
more market power. This protects customer data and
This can then also ensure that it becomes clearer to the
prevents the creation of user profiles. But in turn it
customer what his data is used for. This is not
poses dangers for advertisers and companies that are
necessarily the case when using third-party cookies, as
dependent on personalized advertising. In the end, the
third-party companies can use the data to place
question arises whether such steps only bring benefits
advertisements for the customer. Due to the trend that
to the big players and exclude smaller companies.
cookies or device IDs can no longer be used as a
From the agency's point of view, Ye is convinced that tracking option, it is important, according to Ye, that
Programmatic Advertising cannot exist the way it automated advertising is balanced with strategic
does. Due to current developments and the call for partnerships with large publishers and technology
more data security, publishers and digital product partners in order to be able to continue to display
providers would either have to offer a fair value high-quality content and, at the same time, to be able
exchange for the data offered or find sources of to reach high-quality audiences.
income that do not require a significant amount of
Seitz also recognizes that the mixture of personalized
consumer data. Nevertheless, Ye also emphasizes that
content and the display of content due to the
Programmatic does not necessarily depend on the
respective environment is decisive for the success of
collection of specific user data. The automation of
an advertising measure. With the help of contextual
buying media does not depend on this, as context-
targeting, it can be analyzed in which situation the
related data can also be used, for example.
user currently is (which page he is surfing on, which
Nonetheless, advertisers should get used to the
content is currently being read, which time and which
mindset of not requiring more data than permissible
location can be used). And from this a context can in
from their consumers in terms of data protection.
turn be mapped in order to be able to place advertising- without the need for specific data in order to be able users can actively decide whether their activity and
to clearly identify the user. the storage of data can be used to display personalized
advertising.
In this regard, Ye notes that Google, which wants to
prevent the tracking of customers through third-party However, Seitz questions whether this regulation has
cookies, is also relying on alternatives. With the help really achieved the desired effect. He criticizes the
of "Federated Learning of Cohorts" advertisers will fact that the society releases a lot of data to large
get the opportunity to display advertising to a group of companies and that smaller companies can no longer
people with similar interests without the need of cooperate due to regulations because data transfer has
personal data of an individual user. This could been prohibited.
improve the protection of the data of the consumer.
According to Seitz, it rather requires an obligation for
Diversity of Opinion the big companies to disclose the data for science in
Within the literature research, attention was drawn to order to analyze what exactly is being done with the
the fact that target-group-oriented distribution of customer's data. And with the help of these analyzes
content supported by customer data can ensure that by an expert group of scientists, smart regulations
filter bubbles arise. Seitz emphasizes on this topic that could then be created. Thus, transparency can be
it is initially always in the advertiser's interest that the created, and a disadvantage of the European economy
customer is shown advertising or content that he compared to the big companies from the US can be
would like to see. And thanks to technologies such as reduced.
Programmatic, which are becoming more and more
Opportunities for Programmatic Advertising
powerful, situations can be exploited. There is a risk
In addition to classic display advertising and thus the
that, for example, overconsumption will be provoked
display of banners on websites, Seitz identifies many
and precisely those users who are susceptible to this
other areas in which Programmatic Advertising will
aspect will then be shown, for example, advertising
expand in the future. He is referring to general media
for cheap loans to gambling addicts. Nevertheless,
usage, in which Programmatic Advertising will also
Seitz would like to make clear that this is less a
find its place in the area of television with the help of
problem of pure targeting through Programmatic, but
addressable TVs for example. Seitz also mentions that
rather the created content, mostly fake content, as with
Programmatic Advertising will have a stronger
Cambridge Analytica.
influence in both the out-of-home and audio sectors.
Ye as a professional expert in the field was also asked He summarizes that Programmatic Advertising will
about this issue. She noted that digital communities continue to develop until the entire media usage has
and social media platforms ensure that niches and been covered programmatically.
different interest groups are formed because of their
This trend will now probably flatten out, as can also
business models. As a result, attention spans and thus
be seen in Gartner's Hype Cycle. This is because the
the time the user spends on a platform can be
various areas such as digital-out-of-home (DOOH) or
optimized. This creates filter bubbles in which users
audio/radio cannot be conquered as quickly as with
feel comfortable and where they can identify
display advertising. Devices and technology must first
themselves. However, under this aspect, Ye would
be converted or expanded so that Programmatic
like to make clear that although these platforms are
Advertising can be used in these areas. The trend will
financed by advertising, it will be difficult for
continue unabated in the direction of Programmatic.
advertisers to be responsible for the business models
Ye also sees other areas such as audio as another
of a platform.
major component for the use of Programmatic
Regulations Advertising. Programmatic ads will thus become more
Regulations such as the GDPR are already in place, common and comprehensive. In this field, however,
which have ensured that users on various websites the question is still to what extent value gets created
must give their consent as to whether cookies may be through the chain of users, advertisers, marketers and
activated in order to track the activity on the technology vendors.
respective website. This is to make certain that theIn addition to other media channels, Seitz identifies which in turn can be used for tracking and marketing
opportunities in the use of Programmatic Advertising. activities. For this reason, they are calling for stronger
For underdeveloped companies, NGOs and regulations that would restrict microtargeting but at
organizations that are dependent on donations, for the same time strengthen the privacy of the individual
example, there is great potential in Programmatic user. Increased demand for data security from
Advertising. It is therefore important to address the customers should therefore be an important factor for
fact that Programmatic Advertising can be used for advertisers, as otherwise there is a risk that users will
campaigns in order to have a positive effect. Seitz is use tools such as ad blockers to avoid advertisements
critical of the fact that Programmatic Advertising is and personalized targeting. The experts also recognize
often viewed negatively or as ethically reprehensible. that the responsible use of user’s data is important,
Some organizations would rather advertise in and that the customer should be clear about which
magazines to promote journalism and not Facebook or data is being processed and for what purposes. Seitz
other big players from the US. However, this way of shows that consumers either trust companies or do not
thinking has to change in order to be able to reach the trust them. However, the question arises whether users
target group as efficiently as possible in the future, have any way of actively avoiding this data collection
according to Seitz. And this is often no longer in print or whether they "trust" the company because the use
media but in today's social media networks. of the services is more important to them.
DISCUSSION Personalized content tailored to the customer can also
In this thesis it was made clear which influences cause a restricted view. On the one hand, this ensures
Programmatic Advertising can have on society and that users can be presented with more precise content.
which risks are associated with it. This made it However, this can increase the risk of filter bubbles
possible to provide evidence for the research question and restricted diversity of opinion. The interviewed
as to whether the technology has an impact on data experts make it clear, however, that although a
security and the diversity of opinions of users. It technology such as Programmatic Advertising can
shows that Programmatic Advertising has the ultimately be used for such purposes, it is also not
predominant share of digital ad spend and that this within the scope of the advertisers to influence the
technology enables advertisers to target users as business models of the companies involved, such as
precisely as possible. It can be seen that consumers social media networks. For this reason, regulations are
are often not aware of what information and data is needed in order to be able to evaluate data analyzes
collected from them so that it can be used for from large companies and a limited use of
marketing purposes. For this reason, regulations such microtargeting can ensure that social groups are not
as the GDPR are intended to ensure that users give fragmented in their views and excluded from one
their consent to tracking. Nevertheless, many users another. Therefore, greater transparency can ensure
agree to these provisions because they want to use the that society can identify for which purposes customer
services of, for example, social media networks, in data is being used.
which their consent is required.
Meanwhile, dominant companies in the information
In this regard, Seitz questioned whether the existing technology industry are causing a stir with their own
regulations are effective or whether users simply give measures in matters of data security. While Google
consent in order to be able to use the services of the will prohibit third-party cookies from being used in
companies. Rather, what is needed is more their browsers to stop the offer of tailor-made
transparency and the possibility that independent advertising with the help of tracking, Apple gives its
scientists can analyze the data collection of large customers the option of deactivating tracking of apps
corporations such as Facebook. This could create in the latest iOS version. This initially shows a
more transparency and, as a result, greater awareness strengthening of the customer's right to privacy.
among customers. However, within the expert interviews it becomes
Researchers criticize the fact that customers often do clear that the companies also have a self-interest in it.
free labor for corporations by disclosing their data, It can be assumed that Apple would like to consolidateits market power with a statement for more data the interest of the social network Facebook to make its
protection, which in turn brings companies like services available to everyone free of charge. And this
Facebook into conflict with the tech giant, as they are is exactly a problem with subscriptions, as it could
heavily dependent on the tracking of their customers exclude parts of the world population from using these
for personalized advertisements. services. Nonetheless, it is crucial that customer data
is handled sustainably and responsibly in the future so
Due to the actions of the big players in the market, the
that no exploitation can take place. And this should
Programmatic Advertising landscape is in a constant
lead to success with the help of regulations and / or a
change. The experts find that contextual targeting is
restriction of personalized advertising, as can be seen
experiencing a new upswing thanks to the constant
from the example of Apple and Google.
retreat of cookies or the terminated support of device
IDs. This makes it still possible to display advertising Limitations and future research
on different platforms even without customer-specific In general, it can be said that the method of expert
data. This phenomenon, in turn, ensures increased interviews offered a useful opportunity to obtain a
data security and will possibly make it more clear to critical opinion on the use and perspectives of the
the customer in the future which data has been used, technology. Nonetheless, the subsequent analysis
since this will then consist of first / second-party showed that further expert interviews could be held,
cookies, which are created, for example, when logging which in particular would take up the topic of data
in for a specific service. The question arises to what ethics and security even more. As a result, a more
extent this trend will develop further or whether in the differentiated and possibly critical picture could be
near future ways will be found again to track formed with the help of more qualitative research.
individual customers as efficiently as possible and Due to the limited scope of this work, an interview
thus to generate the highest possible turnover. with a professor and a professional was considered as
a good balance.
With regard to the future of Programmatic
Advertising, both the literature and the expert In addition, the question arises whether an online-
interviews show that the technology will continue to based survey with internet users could broaden the
exist and will be expanded even with measures that perspective. This method would make it possible to
may restrict personalized advertising. For example, analyze how users feel when they are confronted with
other areas such as TV, audio / radio or DOOH are personalized content and how they identify their data
available, in which Programmatic Advertising will protected or misused. In further research, a deeper
gain even more market power in the future. But due to focus could be placed on the perspectives of the users
the increased interest in data security, companies and possible conclusions for the technology could be
should ensure that the value exchange between analyzed and worked out. It would also be possible to
advertisers and consumers also becomes clearer for create a framework for the responsible use of
the user. This could guarantee that the customer will Programmatic Advertising and personalized content
continue to give his consent to personalized based on the knowledge gathered. Nevertheless,
advertising in the future and not prohibit it by various aspects and influences of Programmatic
rejecting it or using blocking tools. Advertising and personalized content on society could
be highlighted within this work.
Ethics and Sustainability
The movements on the market show that there has CONCLUSION
been a rethinking of personalized advertising recently. Finally, it can be stated that the technology related to
The question now arises whether these developments Programmatic Advertising is characterized by
lead to an improvement in customer privacy. This constant change. Due to the increasing uncertainty in
would be desirable, since a further intensification can society about what exactly happens to the data when
lead to situations being exploited more and more often using internet services, not only advertisers, but also
to the disadvantage of the user. Among other things, large tech companies are rethinking their advertising
subscription models would be an alternative for ad- strategies. This shows that preventing personalized
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https://www.zenithmedia.com/product/prograAppendix 1 – Transcription of interview with Prof. Dr. Jürgen Seitz (University of Media, Stuttgart, Germany) - recorded via Zoom on May 4th, 2021 at 11 a.m. (conducted in German) Christopher Klee: Einfach mal kurz zum Einstieg noch mal, dass sie sich noch mal kurz vorstellen könnten, ihre Position, ihre Jobbezeichnung sozusagen und erklären, warum dieser Marketingtrend dieses Programmatic Advertisings schon vor fünf Jahren ihr Interesse geweckt hatte. 00:00:00 Prof. Dr. Jürgen Seitz: Das lässt sich relativ einfach erklären. Ich bin Professor an der Hochschule der Medien in Stuttgart. Dort für Digital Business und digitales Marketing im Wesentlichen tätig bzw. in dem Bereich tätig. Wir haben da natürlich mehrere Kollegen, die da unterwegs sind und der Programmatic Advertising Bereich interessiert mich ehrlich gesagt schon viel, viel länger, nämlich seit eigentlich Programmatic Advertising angefangen hat, weil ich aus der United Internet Gruppe komme und wir waren als Vermarkter mit United Internet Media einer der ersten Vermarkter der Programmatic in Deutschland vorangebracht hat, der also, nachdem er, nachdem wir mit Targeting schon innoviert hatten, auch Programmatic innoviert hatten. Und in den ganz frühen Zeiten, als quasi die ersten Systeme von AppNexus und Co. kamen, waren wir quasi der Pionier in Deutschland. Und das ist der Grund, warum ich mit der Szene des Programmatic Advertisings sehr eng vernetzt bin, obwohl es mittlerweile kein Forschungsschwerpunkt mehr von mir ist. 00:00:55 Christopher Klee: Aber Sie hatten ja im Jahr 2016 in dem Buch von Oliver Busch auch mit dem Herrn Zorn einen Artikel. Ich glaube, für die Perspektive des Problematic Advertisings. Dort haben Sie auch von Gartners Hype Cycle gesprochen, der wirklich bei vielen Technologien dem gleichen Muster folgt, dass es ein Anstieg gibt. Und dann der ist ein Abfall und eine Ernüchterung. Und danach geht's langsam wieder hoch. Kann man denn benennen, jetzt in 2021, wo sich Programmatic Advertising gerade befindet? 00:01:31 Prof. Dr. Jürgen Seitz: Ja, da gibt's ja relativ einfach, wenn Sie sich die anschauen, die Zahlen. Ich habe nicht die aktuellsten Zahlen im Kopf, aber der Trend ist unverändert. Wir sind in der Phase des kontinuierlichen Aufstiegs. Das heißt, die Enttäuschungsphase ist vorbei und es kommt jetzt der kontinuierliche Aufstieg. Da gibt's sicher Marktplayer, die das anders sehen, die vor verschiedenen Hintergründen, wie aktuell das Thema Daten Tracking "Do not Track", die da durchaus Zweifel daran haben und fragen "Ja, sind wir nicht wieder vor einem Absturz"? Aber sagen wir alle Zahlen, die wir sehen, deuten sehr, sehr stark darauf hin, dass wir eine kontinuierliche Weiterentwicklung hatten. Ein sehr guter Indikator für Sie ist: Wir haben ja eine komplette Dominanz von eigentlich drei Playern, nämlich Google, Facebook und mittlerweile auch Amazon. Google, Facebook mit weitem Abstand. Dann kommt Amazon, die in dem Bereich tätig sind. Und wenn sich die letzten Quartalszahlen von diesen Unternehmen anschauen, dann haben die allesamt Rekordzahlen hingelegt. Das heißt, dass Programmatic Advertising auf diesem Weg des kontinuierlichen Aufstiegs ist. Man kann sich dann nochmal natürlich ein bisschen differenzierter anschauen und kann nochmal überlegen: Okay, gibt es Bereiche, die noch weniger programmatisch sind? Da kann noch mehr passieren. Da hat man sich im Video-Bereich noch enormes Potenzial. Aber auch dort sind wir durch die Enttäuschungsphase meines Erachtens komplett hindurch und sehen, dass sich das jetzt als absoluter Standard etabliert. 00:02:54 Christopher Klee: Jetzt haben Sie schon erwähnt, die Big Player Google, Facebook und Amazon und wie jetzt vor einigen Wochen offiziell von Google bekanntgegeben, auch die Third Party Cookies und das Tracking sozusagen einzustellen im nächsten Jahr. Das kam jetzt nicht wirklich überraschend für die Branche. Aber dennoch bauen ja viele Unternehmen trotzdem immer noch oder jetzt, wenn man es einen Konsens gibt, damit die Cookies getrackt werden. Sozusagen bauen ja noch viele Agenturen auch auf diesem Konzept. Inwieweit gefährdet denn diese Entscheidung von so einem Big Player die Zukunft von Programmatic Advertising und kriegt dadurch sozusagen Google mit seinen Walled Gardens oder durch eigene Login-Methoden einfach noch mehr Macht? Und ist das das eigentliche Ziel?
00:03:41 Prof. Dr. Jürgen Seitz: Das ist ja die Unterstellung, die häufig gemacht wird und die jetzt auch teilweise bis hin zu law suits geht, dass man eben sagt okay, es ist eigentlich gar kein Privacy Thema, sondern es ist ein Thema, wo man sagt, man möchte seine eigene Macht festigen. Ich persönlich glaube der Hebel kommt letztendlich daher, dass das Privacy Thema natürlich beim Endkunden-Thema mittlerweile ein relevantes Thema ist. Cookies ist das eine, aber noch viel spannender ist natürlich das Thema Mobile. Also wenn Sie sehen, was Apple gerade mit iOS 14 macht, wo eben das Tracking der Apps faktisch abgeschnitten wird, das für die Werbung durch enorm wertvoll ist. Wenn Sie wissen, welche jemand auf seinem Handy hat, dann sehen Sie, dass das durchaus getrieben worden ist mit dem Grund, dem Konsumenten eine Differenzierungsmöglichkeit oder gegenüber dem Konsumenten eine Differenzierungsmöglichkeit zu haben. Also sprich zu sagen, wenn du im Apple-Ökosystem bist, dann zahlst du zwar jede Menge Geld ist sehr teuer, aber dafür ist deine Privacy komplett abgeht abgeschlossen. Und ähnliche Überlegungen sieht man sicher auch, wenn man sich die Browserlandschaft anschaut und man sich die Geräte anschaut, wo eben ganz klar durchaus die Überlegung ist: Okay, wir müssen beim Konsumenten das Thema adressieren und die Amerikaner sind da natürlich sehr konsequent, wenn sie sowas machen und sagen okay, was, was hatten das alles für Implikationen, denken es halt ganzheitlicher durch als mancher Deutsche. Und dann hat man natürlich auch die Chance erkannt zu sagen: Okay. Und außerdem verfestigt es unsere Position als die entscheidenden Player in dem Bereich, weil guten, sagen wir mal auf einem guten technischen Stand werden diese beiden Player, egal was da draußen in Sachen Privacy passiert, immer noch anbieten können. Vielleicht nicht mit der gleichen Qualität. Also ich will nicht sagen, dass es keinen Einfluss hat, aber wenn man den Markt sich anschaut, muss man sich schon ganz klar sagen, dass man wieder mal den Effekt hat, dass die Starken damit sehr gut klarkommen und das andere natürlich schauen müssen, wo sie bleiben. Das ist, weiß ich nicht, ob das besonders tief und wenig abstrakt ist, vielleicht kann man da kann man es in einzelnen Bereichen kann man es dann immer noch tiefer diskutieren, aber grundsätzlich hat man eben dieses gegenüber dem Nutzer. Man hat die Regulierung, das heißt die enormen Strafen, die natürlich auch aufgebrummt werden und die ganz klar auf die großen Firmen fokussiert sind. Und dann hat man eben noch zusätzlich und ich glaube, man nimmt die mit, die Chance, die eigene Marktposition zu verfestigen. 00:06:12 Christopher Klee: Jetzt hinterfragen ja auch die User, also haben Sie schon erwähnt, die Browser haben auch schon Einstellungen, die die User benutzen, auch schon seit Jahren Adblocker und so weiter und so fort. Die User hinterfragen vermutlich auch stärker, woher denn die Werbetreibenden die Daten für diese Customer Journeys haben. Ich bin jetzt auf der 5. Seite gelandet und bekomme immer noch Werbung von einer Seite, wo ich vor einer Stunde war oder oder die letzten Tage war. Sollte die Technologie in Zukunft noch nachhaltiger eingesetzt werden, um vielleicht auch die Furcht vor einem Datenmissbrauch zu verhindern? Gerade wo jetzt die Datenethik immer wichtiger wird für den Kunden. 00:06:55 Prof. Dr. Jürgen Seitz: Ich weiß nicht, ob die Datenethik wirklich wichtiger wird für den Kunden. Man muss ja folgendes sehen. Der Kunde differenziert nicht zwischen Datenlecks, Daten, Werbung, die für Werbung vernutzt werden oder für den Kunden ist einfach: Vertraue ich einem Unternehmen, vertraue ich dem Unternehmen nicht und bin ich bereit, diesen Trade-off zu machen. Und da ist natürlich, sagen wir mal, wenn Sie wirklich harte Datenlecks haben, wenn Sie Probleme haben mit Phishing, wenn Sie von verschlüsselten Hackerangriffen in der Politik und Sonstigen hören, dann wird das Thema natürlich von anderer Seite, das heißt gar nicht aus der Werbeseite, sondern von anderer Seite wird das Thema natürlich hochgefahren und dann vermischen sich alle möglichen Themen. Und natürlich möchte man ein sicheres Handy, das nicht von der NSA abgehört wird. Wenn Sie sich entscheiden können, ich nehme das eine oder andere Unternehmen, dann nehmen sie das eine und dann wird es halt oft in der Werbung vermischt. Wenn wir uns die Werbung selbst anschauen, ist es eigentlich seit Jahrzehnten mittlerweile so: Wenn man die Konsumenten fragt, sagen sie Ja, ich möchte ungern getrackt werden. Und wenn man sich dann aber fragt, hey, was stört dich am meisten? Ja, dass das Retargeting nicht genauer ist oder dass ich irrelevante Werbung sehe. Ich glaube, es ist eine Mischung und diese Mischung sorgt dafür, dass aus anderen Überlegungen heraus viele Player sagen, okay, das Thema mache ich mir entsprechend nicht auf, sondern sage einfach: Hey, ich differenziere mich. Ich sage bei mir hast du auch Datenschutz und es ist
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