AdTech in 2023: Trends, Challenges, and Opportunities

As the AdTech and programmatic advertising industries move into another year, what trends, challenges, and opportunities can publishers, advertisers, and vendors realistically expect?

This article recaps the defining events of 2022 and outlines what's shaping 2023, drawing on insights from practitioners across video streaming tech, in-game advertising, and AdTech development.

Recap: Key Events in AdTech in 2022

2022 was another turbulent year for programmatic advertising and AdTech — packed with regulatory rulings, identity shifts, and market realignments.

Here are the headline events:

• Google and Facebook's combined share of US digital advertising spend dropped below 50% for the first time since 2014, landing at 48.4% — Google at 28.8% and Facebook at 19.6%.
• Google, Meta, Apple, and Amazon all faced deepening antitrust scrutiny for alleged anti-competitive behaviour in digital advertising.
• Google Chrome announced it was shutting down its Federated Learning of Cohorts (FLoC) proposal inside Privacy Sandbox, replacing it with the Topics API.
• Google signalled that it would bring Privacy Sandbox to Android and make changes to how the Google Advertising ID (GAID) can be accessed.
• The Belgian DPA ruled that the IAB's Transparency and Consent Framework (TCF) was illegal in its current form under GDPR.
• The IAB Tech Lab launched its Seller Defined Audiences (SDA) proposal, enabling publishers to create audiences for advertisers without passing on user identity.
• The EU's Digital Markets Act (DMA) and Digital Services Act (DSA) cleared the European Parliament, beginning the countdown to enforcement.
• Netflix announced an ad-supported tier and named Microsoft as its AdTech partner.
• Retail media continued its ascent, consolidating its position as one of the fastest-growing areas in programmatic.
• Vodafone and Deutsche Telekom released TrustPid — an identifier created at the ISP level, bypassing browser settings, ad blockers, and IP masking.
• The IAB, IAB Tech Lab, and Media Rating Council (MRC) published Intrinsic In-Game (IIG) Measurement Guidelines — new standards for measuring advertising inside games.
• Google offered to spin off parts of its advertising business to pre-empt antitrust action, but the US DOJ rejected the proposal.
• Google Chrome announced another delay to third-party cookie deprecation, now pushing the timeline to 2024.
• Apple posted job listings signalling moves toward building its own AdTech platform.
• AWS announced AWS Data Clean Rooms, entering the clean room space.
• The European Data Protection Board (EDPB) ruled that Meta cannot rely on the contractual basis to legally process personal data for advertising — it must use consent instead.
• IAB Tech Lab updated the OpenRTB protocol to include new objects specifically for digital out-of-home (DOOH).

Trends, Challenges, and Opportunities for 2023

Privacy

What are the key privacy developments to watch in 2023?

Privacy has dominated AdTech headlines for several years running, and 2023 is unlikely to spring many new surprises — but there is plenty still unfolding beneath the surface that will affect how companies operate.

1. US State Privacy Laws

The US still lacks a federal privacy law, but state-level legislation has been moving fast. California's CPRA is already in effect, and Colorado, Connecticut, Utah, and Virginia have all passed privacy regulations — many already in effect or coming into force in 2023. Companies with US operations can expect continued patchwork complexity.

2. The IAB's Transparency and Consent Framework (TCF)

In February 2022, Belgium's DPA declared the IAB's TCF non-compliant with GDPR. Then in January 2023, the Belgian DPA approved IAB Europe's remediation plan — a step forward, but far from the end of the road.

Two critical questions still hang over the framework: whether the EU's Court of Justice will classify IAB Europe as a joint data controller, and whether TCF consent strings constitute personal data. Proceedings at this level tend to stretch over years, but rulings from the Court of Justice in 2023 are possible — and could significantly affect every company relying on TCF for consent collection and data processing.

3. Google's Privacy Sandbox

Privacy Sandbox has faced repeated setbacks: delays to cookie deprecation, backlash against FLoC from privacy advocates, and an ongoing antitrust investigation by the UK's Competition and Markets Authority (CMA).

Even with Chrome's third-party cookie shutdown scheduled for 2024, the situation remains fluid. Google has stated it will not shut off third-party cookie support unless a working alternative — namely Privacy Sandbox — is ready. According to Google's own published timeline, Privacy Sandbox is slated to become generally available in Q3 2023.

The questions to watch: Will the Q3 timeline hold? How many companies will actually implement the various Privacy Sandbox standards? And will the CMA's investigation — focused specifically on whether killing third-party cookies harms competition — produce further action?

4. Google Android and GAID

Alongside the Chrome changes, Google has indicated it will bring Privacy Sandbox to Android and eventually retire the Google Advertising ID (GAID). Google began beta testing Privacy Sandbox on Android in February 2023, so advancements and news from that process should emerge throughout the year.

App developers, advertisers, and AdTech vendors should pay close attention. Privacy Sandbox is likely to become one of the only viable alternatives for mobile advertising targeting — at least in the near term.

Apple's ATT changes offer a preview of what's possible: Facebook projected a US$10 billion revenue loss in 2022 as a direct result of Apple's IDFA restrictions. The Android shift, should it follow the same path, would have similarly wide consequences across the mobile advertising ecosystem.

5. The EU's DMA and DSA

The DMA applies from May 2, 2023 and the DSA from January 1, 2024.

The DMA targets companies classified as "gatekeepers" — a designation that applies to Google, Meta, Apple, and Amazon based on their financial scale and monthly active user counts.

Key obligations for gatekeepers include:

• Data sharing among owned platforms — gatekeepers must obtain user consent before sharing data across their own services (e.g., Facebook sharing user data with WhatsApp or Instagram).
• Third-party access — gatekeepers must open their ecosystems to third-party services and products (e.g., Apple allowing third-party app stores on iOS).

Both laws are designed to improve privacy protections for EU citizens and foster more competitive, open markets. The practical impact on programmatic advertising and AdTech will become clearer as the major platforms begin publishing their compliance plans throughout 2023.

Display Advertising

What can the industry expect around third-party cookie alternatives in 2023?

Despite years of lead time, adoption of cookie alternatives remains sluggish. Many companies are still heavily reliant on third-party cookies — even though those cookies now only function inside Chrome — and haven't meaningfully tested the proposed replacements.

AdTech has always been slow to adopt new standards, and the pattern is repeating itself here. While urgency is clearly building, the realistic expectation is that serious testing and implementation will ramp up through 2023, with the real push coming in 2024 as the deadline closes in.

What's worth highlighting is that waiting until the last moment — as many companies did with GDPR — is a costly strategy. The better time to test alternatives to third-party cookies and mobile IDs is now, while there's still space to learn and adjust.

— Industry CEO, AdTech development

In-App Mobile Advertising

What can the mobile advertising industry learn from browser-side privacy changes, and how should it adapt?

Apple's ATT framework was a watershed moment. It demonstrated clearly that a major platform can unilaterally change the rules of mobile identification — and the industry has to adapt. Facebook's projected US$10 billion revenue hit in 2022 puts the commercial stakes in sharp relief.

Google's Android equivalent is now in motion. Privacy Sandbox for Android entered beta testing in February 2023, so the mobile advertising ecosystem should expect tangible developments throughout the year. Given that Privacy Sandbox appears positioned as the primary alternative to GAID, it warrants careful attention from anyone operating in app-based advertising.

CTV and OTT Advertising

Where will CTV see the most progress in 2023?

eMarketer forecasts that US connected TV ad spend will more than double by the end of 2026. The growth trajectory is clear — but the structural challenges holding the industry back remain largely unresolved.

The three persistent problem areas are identification, measurement, and ad fraud, and they're closely interconnected. Better data storage, transmission, and encryption improves measurement. Privacy-compliant data transfer reduces fraud exposure. Progress in one area tends to produce lift in the others.

The absence of common standards is a core issue. Anti-fraud tools, for example, are calibrated for video content — not for CTV-adjacent applications like games or screensavers. As a result, these tools can incorrectly flag legitimate non-video applications as invalid traffic (IVT). Analytics and attribution remain relatively unsophisticated across the board, leaving significant room for improvement.

User acquisition is another ongoing challenge, with only some platforms offering paid acquisition options — leaving many publishers to piece together their own solutions.

Tools like data clean rooms can improve the reliability of data transfer, and the market is moving toward greater interoperability and more consistent standardization. These shifts point toward meaningful progress in 2023.

— Co-founder and Chief Strategy Officer, video streaming technology provider

In-Game Advertising

Will the new IAB measurement guidelines bring more brand investment into gaming?

The publication of the IAB's Intrinsic In-Game (IIG) Measurement Guidelines is a genuine turning point. Official standards from the IAB reduce the uncertainty that has historically made brands hesitant — in-game is no longer a channel that requires specialist expertise just to evaluate.

The scale of the opportunity is hard to ignore: there are over 3.2 billion gamers worldwide, and the global video games market is projected to reach $304.7 billion by 2027. As audiences grow, so does the commercial relationship between advertisers and game developers.

Gaming offers attributes that are genuinely rare in the broader media landscape: diverse, highly attentive audiences; a non-disruptive ad experience; a brand-safe environment; and comparatively low fraud rates. These aren't niche benefits — they're core media planning criteria.

With major players like Microsoft and Sony now actively looking at in-game advertising, the channel's reach extends well beyond mobile into AAA console titles. That signals a meaningful shift in how ads in premium gaming environments are perceived by both platforms and brands.

The new standards will accelerate spend, and the success stories that emerge over the next year or two will pull in the next wave of advertisers.

— Senior Programmatic Account Manager, in-game advertising platform

Digital Out-of-Home (DOOH)

Where are the biggest brand opportunities in DOOH for 2023?

DOOH has bounced back strongly following the lifting of COVID-related lockdowns, and momentum is building. The two most interesting opportunity areas are new ad formats and new display environments.

1. New Ad Formats

Out-of-home advertising has always been an effective channel for brand awareness and creative storytelling. DOOH expands that creative canvas considerably. The emergence of 3D DOOH executions in recent years shows what's possible when technology and creativity intersect — and that space is still early.

2. New DOOH Display Environments

Most people still associate DOOH with digital billboards and mall displays, and while those formats dominate the category today, new environments are emerging. Rideshare and food delivery platforms, for instance, have a clear path to creating new advertising revenue streams — think in-vehicle digital displays serving personalized ads to captive audiences.

The scope for new DOOH formats is genuinely wide, and 2023 should see continued experimentation as more brands and media owners explore what the channel can do beyond traditional placements.