Three AdTech Stories of 2017 That Almost Nobody Predicted
When industry observers assembled their 2017 predictions at the close of 2016, the consensus forecast centred on mergers and acquisitions, header bidding, AI and machine learning, and the continued rise of mobile. Those themes did play out — but they weren't the defining stories of the year.
Looking back, three developments caught most of the industry off-guard and reshaped the conversation heading into 2018.
1. Ads.txt
Everyone in the industry knew ad fraud was a serious problem in 2016. What few anticipated was that a credible, widely adopted mitigation mechanism would emerge so quickly.
Ads.txt is an initiative developed by the IAB Tech Lab, designed to combat specific categories of ad fraud — primarily domain spoofing and illegitimate inventory arbitrage — while introducing a layer of supply-chain transparency into a notoriously opaque ecosystem.
Released in May 2017, the spec allows publishers to publicly declare which companies are authorized to sell their inventory, making it considerably harder for fraudsters to profit from inventory that doesn't belong to them.
Initial adoption was sluggish. As of September 2017, only 12.8% of publishers had an ads.txt file in place. The inflection point came when Google announced that DoubleClick Bid Manager would restrict its buying to publishers carrying an ads.txt file. That single announcement pushed adoption to 44% among the Alexa top 10,000 global domains that sell advertising — a remarkable shift in a matter of weeks.
2. Intelligent Tracking Prevention
Apple's rollout of this privacy feature blindsided a significant portion of the AdTech industry in the back half of 2017.
Intelligent Tracking Prevention (ITP) is a WebKit feature — WebKit being the open-source browser engine that powers Safari — shipped as part of Safari 11 and iOS 11. Its core function is to change how Safari handles first-party cookies, with the explicit goal of limiting cross-site tracking of users.
The impact rippled unevenly across the ecosystem. Ad-retargeting platforms and DSPs absorbed the sharpest blow. Criteo, one of the most prominent retargeting players in the market, reported that ITP cost the company $1 million in Q3 2017 alone, and projected losses of at least $20 million in Q4.
The trajectory heading into 2018 looked worse, not better. Beyond Apple's own moves, other browser vendors were reportedly weighing privacy-by-default features partly to get ahead of GDPR compliance obligations — a dynamic that threatened to compound the disruption already underway.
3. ePrivacy
The proposed ePrivacy regulation wasn't entirely unknown, but its momentum in 2017 caught most advertising ecosystem participants flat-footed.
While the industry was still working through the implications of GDPR, the successive drafts of the ePrivacy regulation introduced a separate and, for many companies, more immediate concern. The proposed regulation would directly govern how advertisers, AdTech vendors, and publishers handle electronic communications data and user consent — going further in some respects than GDPR itself.
By the end of 2017, the regulation was moving through trialogue proceedings — the informal three-way negotiations between the European Parliament, the Council of the EU, and the European Commission — leaving the final timeline and text uncertain.
With GDPR scheduled to take effect on May 25, 2018, and ePrivacy expected to follow in close succession, the regulatory pressure bearing down on the industry was substantial. High-profile enforcement actions and business casualties looked increasingly probable.
Taken together, these three stories pointed toward a common pressure: the ad industry's longstanding tolerance for opacity, fraud, and unchecked tracking was running out of runway. The forces of regulation, browser-level enforcement, and supply-chain accountability were converging — and 2018 would be the year the consequences became real.