5 Things That Define the Third Wave of Digital Advertising

Novice surfers are taught to catch waves only after they’ve broken. In advertising, however, waiting until then can cost you money, ROAS, and share of market.

That’s why the time is now to understand the third wave of digital advertising.

The first wave of digital advertising was search, which gathered strength after the dot-com bubble burst in 2000. The second wave, social media advertising, began with ads on Facebook and LinkedIn circa 2006 before gaining strength several years later.

And now the third wave is approaching: Consumer-centric advertising that incorporates personalization at or near the point of sale and with a renewed emphasis on zero- and first-party data.

At the crest of this wave is commerce media; eMarketer anticipates more than $140 billion in retail media ad spend worldwide in 2024, accounting for a fifth of all digital ad spending and up nearly 22% from 2023.

Many consider Amazon’s introduction of its programmatic ad solution in 2012 to have been the birth of commerce media, taking it beyond in-store digital displays. This third wave of digital advertising, however, amplifies the power of commerce media with retail-agnostic media platforms (RAMPs). Incorporating zero- and first-party consumer-purchase data, they have the added benefit of compensating for the diminished relevance of third-party cookies.

Surf’s up marketers: Let’s look at the five elements powering this latest wave of digital advertising so that you can ride it more productively and profitably.

Novice surfers are taught to catch waves only after they’ve broken. In advertising, however, waiting until then can cost you money, ROAS, and share of market.

That’s why the time is now to understand the third wave of digital advertising.

The first wave of digital advertising was search, which gathered strength after the dot-com bubble burst in 2000. The second wave, social media advertising, began with ads on Facebook and LinkedIn circa 2006 before gaining strength several years later.

And now the third wave is approaching: Consumer-centric advertising that incorporates personalization at or near the point of sale and with a renewed emphasis on zero- and first-party data.

At the crest of this wave is commerce media; eMarketer anticipates more than $140 billion in retail media ad spend worldwide in 2024, accounting for a fifth of all digital ad spending and up nearly 22% from 2023.

Many consider Amazon’s introduction of its programmatic ad solution in 2012 to have been the birth of commerce media, taking it beyond in-store digital displays. This third wave of digital advertising, however, amplifies the power of commerce media with retail-agnostic media platforms (RAMPs). Incorporating zero- and first-party consumer-purchase data, they have the added benefit of compensating for the diminished relevance of third-party cookies.

Surf’s up marketers: Let’s look at the five elements powering this latest wave of digital advertising so that you can ride it more productively and profitably.

Digital media close to the point of sale, commerce media began as in-store or retail media, with supermarkets and other physical retailers the first to implement it. It evolved to include on-site ads, such as sponsored products on Amazon and display ads on Walmart.com. The evolution (some might say revolution) continued with off-site digital ads. These include in-game advertising and connected TV (CTV) ads that tap into retail partnerships, such as that between Omnicom Media Group and grocery chain Albertsons’ retail media network (RMN).

RMNs are the digital advertising assets owned and operated by the retailer, from in-store digital signage to mobile apps. For brands, the benefit of getting in front of consumers as they actively shop or research a purchase is obvious, especially when you factor in the access that the advertisers gain to the retailer’s first-party data, enabling a more-precise audience segmentation.

RMNs excel at understanding what consumers are doing within their own specific retailer ecosystem, but they have limitations. As there are more than 200 RMNs and counting, managing advertising across the various networks is daunting. (A recent survey found that brand advertisers had used an average of six RMNs in the previous year.) Retail-agnostic media platforms, or RAMPs, address this issue—and offer additional benefits as well.

Rewards apps like Fetch, along with third-party delivery platforms and other RAMPs, allow brands to connect with consumers of multiple retailers and restaurants close to the point of purchase via a digital advertising ecosystem that operates independently from any one retailer. Because they collect a wider range of consumer purchase behavior across myriad channels, product categories, and verticals, RAMPs have more data points for advertisers to mix and match. This enables them to create highly personalized advertising experiences, helping brands connect more effectively and authentically.

The diminished relevance of third-party cookies, privacy regulations, and other external factors have made it more difficult for brands to effectively target and address their optimal audiences with relevant messages and offers.

Drawing on its wealth of purchase information, loyalty program data, and other zero- and first-party data, commerce media enables advertisers to home in on prospects with higher intent and brand affinity.

Each RMN reaches a different audience. For instance, a CPG brand wanting nationwide coverage would need to advertise on multiple supermarket RMNs, given the geographic fragmentation of the market. What’s more, each RMN has its own ecosystem, with unique ad options, platforms, and feedback loops. By providing advertisers access to consumers of multiple brands, RAMPs serve as a mall rather than a stand-alone shop.

The diminished relevance of third-party cookies, privacy regulations, and other external factors have made it more difficult for brands to effectively target and address their optimal audiences with relevant messages and offers.

Drawing on its wealth of purchase information, loyalty program data, and other zero- and first-party data, commerce media enables advertisers to home in on prospects with higher intent and brand affinity.

Each RMN reaches a different audience. For instance, a CPG brand wanting nationwide coverage would need to advertise on multiple supermarket RMNs, given the geographic fragmentation of the market. What’s more, each RMN has its own ecosystem, with unique ad options, platforms, and feedback loops. By providing advertisers access to consumers of multiple brands, RAMPs serve as a mall rather than a stand-alone shop.

Gone are the days when consumers relied on just one shopping channel. While 72% of consumers still consider stores their primary buying method, according to a recent NRF/IBM survey, more than a quarter do not.

What’s more, the same survey found that while physical stores are the most popular buying channel, websites are the most popular for learning about products, favored by 42%.

With “hybrid shopping” becoming the rule rather than the exception, advertisers need to communicate consistently with their audience via multiple channels throughout the shopping journey. In-store digital signage, a pop-up ad on an online marketplace, or a display ad on a retailer’s shopping app can be a powerful way to win over a high-intent consumer at the point of purchase, but other channels often create awareness and encourage consideration earlier in the customer journey.

The ever-increasing number of channels that consumers touch on their purchasing path complicates the traditional marketing goal of meeting consumers where they are. So is the fact that the stopping points in each consumer’s purchasing journey, and their intent at each stop, vary depending on the type of product they’re looking for as well as their age and other demographic features.

Brands would want to address consumers using an online marketplace to research a product differently than they would shoppers at that same channel who are about to complete a purchase. By incorporating multiple touch points and plentiful shopper data, consumer-centric advertising such as commerce media enables brands to transform the challenge of multichannel shopping behaviors into an effective opportunity for hyper-targeted marketing.

Brands need reliable data to pinpoint exactly how individuals like to research, shop, and purchase before they can determine the best channels to reach them as well as the best way to engage with them in each channel.

The ever-increasing number of channels that consumers touch on their purchasing path complicates the traditional marketing goal of meeting consumers where they are. So is the fact that the stopping points in each consumer’s purchasing journey, and their intent at each stop, vary depending on the type of product they’re looking for as well as their age and other demographic features.

Brands would want to address consumers using an online marketplace to research a product differently than they would shoppers at that same channel who are about to complete a purchase. By incorporating multiple touch points and plentiful shopper data, consumer-centric advertising such as commerce media enables brands to transform the challenge of multichannel shopping behaviors into an effective opportunity for hyper-targeted marketing.

Brands need reliable data to pinpoint exactly how individuals like to research, shop, and purchase before they can determine the best channels to reach them as well as the best way to engage with them in each channel.

Once considered a subset of first-party data, zero-party data is now viewed as its own class of consumer data.

First-party data is drawn directly from the consumer’s behavior: which pages on your site they visited, how often and when they interacted with your mobile app, what they bought and whether they waited for it to go on sale.

Zero-party data is knowingly volunteered by the consumer: They provide their mobile number to receive SMS messages, participate in quizzes, respond to post-purchase surveys. Depending on the questionnaires, surveys, and forms you ask consumers to complete, zero-party data can be both quantitative and qualitative.

You’re well aware that the diminished relevance of third-party cookies makes it more difficult to identify audiences among consumers who have yet to interact with your brand, let alone to effectively target prospects within those audiences and measure the impact of your advertising. You’re also aware that privacy regulations such as the GDPR and the CCPA have reduced the amount of data consumers allow businesses to share with other organizations. As a result of these factors, 59% of decision-makers surveyed for IAB’s “2024 State of Data” report are now less confident in the accuracy of data they receive from social platforms, 57% are less confident in data from programmatic platforms, and 52% are less confident in ad server data.

To compensate, more businesses are looking inward—at the data they collect from consumers themselves. For instance, 71% of respondents to the IAB survey are increasing their first-party data sets, up from 41% just two years earlier. And because zero- and first-party data is more accurate and reliable than third-party data, organizations that have collected it can better personalize their advertising and the user experience across all channels.

Incentives go a long way to encouraging consumers to provide zero-party data. A recent survey found that 91% of consumers consider loyalty points/rewards a suitable incentive for volunteering information, while 90% will do so for discounts or coupons.

You’re well aware that the diminished relevance of third-party cookies makes it more difficult to identify audiences among consumers who have yet to interact with your brand, let alone to effectively target prospects within those audiences and measure the impact of your advertising. You’re also aware that privacy regulations such as the GDPR and the CCPA have reduced the amount of data consumers allow businesses to share with other organizations. As a result of these factors, 59% of decision-makers surveyed for IAB’s “2024 State of Data” report are now less confident in the accuracy of data they receive from social platforms, 57% are less confident in data from programmatic platforms, and 52% are less confident in ad server data.

To compensate, more businesses are looking inward—at the data they collect from consumers themselves. For instance, 71% of respondents to the IAB survey are increasing their first-party data sets, up from 41% just two years earlier. And because zero- and first-party data is more accurate and reliable than third-party data, organizations that have collected it can better personalize their advertising and the user experience across all channels.

Incentives go a long way to encouraging consumers to provide zero-party data. A recent survey found that 91% of consumers consider loyalty points/rewards a suitable incentive for volunteering information, while 90% will do so for discounts or coupons.

Much more than including an individual’s name in an email subject line, personalization ensures that a brand remains relevant to a consumer throughout every step of the purchase journey, from the messaging they see when browsing online to the products suggested to them on a website to the promotions they’re offered via a mobile app when they’re in-store.

Zero- and first-party data provide actionable qualitative, quantitative, and behavioral information to personalize each consumer’s brand experience. They also provide intent data: signals that indicate whether a consumer is gathering information about a product or service, likely to complete the purchase, or somewhere in between.

And of all types of zero- and first-party data, transactional data is the crown jewel, as past purchases can be the best predictor of future purchases. They show that the consumer doesn’t only passively like or want a product but is also willing to take action to buy the product, as well as indicating preferred channels and other information.

The one-two punch of segmenting audiences by intent and then personalizing the messaging allows for more effective targeting, less waste, and improved ROI.

Consumers have long been shown to prefer personalized experiences; 84% of participants in one recent survey say they are likely to engage with an offer tailored to their particular interests. And according to Forrester, using intent data has improved performance for more than 85% of companies.

B2B marketers have relied on intent data for a while. Given the lengthy journey to purchase for many major investments, understanding where leads were on the path enabled businesses to make the most efficient use of their marketing and sales teams. For most B2C brands the path to purchase is shorter, so they focused more on casting a wide net at the top of the marketing funnel, confident that third-party data would enable them to reach enough qualified prospects to make the effort worthwhile.

However, the growing unreliability of third-party data is now leading them to focus more on wooing and winning those in the middle or nearing the bottom of the funnel—hence the need for intent data to identify those consumers. At the same time, the increasing penetration of RMNs and RAMPs into online display ads, CTV, and other top-of-funnel channels ensures that brands can still reach prospects in the awareness stage.

RMNs and RAMPs are almost by default messaging consumers with high intent to purchase—and their first-party data enables advertisers to bolster the personalization and effectiveness of their messaging on those media.

Consumers have long been shown to prefer personalized experiences; 84% of participants in one recent survey say they are likely to engage with an offer tailored to their particular interests. And according to Forrester, using intent data has improved performance for more than 85% of companies.

B2B marketers have relied on intent data for a while. Given the lengthy journey to purchase for many major investments, understanding where leads were on the path enabled businesses to make the most efficient use of their marketing and sales teams. For most B2C brands the path to purchase is shorter, so they focused more on casting a wide net at the top of the marketing funnel, confident that third-party data would enable them to reach enough qualified prospects to make the effort worthwhile.

However, the growing unreliability of third-party data is now leading them to focus more on wooing and winning those in the middle or nearing the bottom of the funnel—hence the need for intent data to identify those consumers. At the same time, the increasing penetration of RMNs and RAMPs into online display ads, CTV, and other top-of-funnel channels ensures that brands can still reach prospects in the awareness stage.

RMNs and RAMPs are almost by default messaging consumers with high intent to purchase—and their first-party data enables advertisers to bolster the personalization and effectiveness of their messaging on those media.

When it comes to digital advertising, measurement is not just about tracking clicks or impressions; it's about capturing the full spectrum of consumer interactions across multiple touchpoints.

Measurement serves as the backbone of any successful campaign, providing the data and actionable insights necessary to understand and optimize performance. And its true value is realized when brands leverage those insights to make informed decisions and improvements.

With the advent of more sophisticated tools and technologies, measurement has evolved to include a deeper analysis of consumer behavior, engagement, and the overall impact of an ad campaign. This holistic approach allows marketers to assess the immediate effectiveness of their strategies and also refine and enhance future efforts based on comprehensive data-driven insights.

Accuracy is just one item on advertisers’ measurement wish list. Another is standardization across and within channels. Released in January 2024, the IAB/MRC Retail Media Measurement Guidelines should push commerce media closer to the standardization goal.

Above all, many advertisers remain in pursuit of the fabled 360-degree view of omnichannel sales attribution. Because RMNs and RAMPs bridge the digital and the in-person channels, they’re uniquely positioned to provide this. Add in their use of reliable first-party behavioral and transactional data and zero-party data from loyalty programs and other media, and it’s easy to see why more advertisers are investing in commerce media.

New, improved measurement frameworks are replacing less meaningful methods that have relied on third-party cookies. The best of these frameworks use data clean rooms and other proven privacy tools to store and track reliable zero- and first-party data that consider the multiple media used by hybrid shoppers. When these frameworks are applied to networks or platforms with a broad reach—across, say, multiple retail and hospitality brands rather than just one retail chain—advertisers can amass a wealth of actionable data for more effective messaging and then measure, and celebrate, their improved ROAS and ROI.

Accuracy is just one item on advertisers’ measurement wish list. Another is standardization across and within channels. Released in January 2024, the IAB/MRC Retail Media Measurement Guidelines should push commerce media closer to the standardization goal.

Above all, many advertisers remain in pursuit of the fabled 360-degree view of omnichannel sales attribution. Because RMNs and RAMPs bridge the digital and the in-person channels, they’re uniquely positioned to provide this. Add in their use of reliable first-party behavioral and transactional data and zero-party data from loyalty programs and other media, and it’s easy to see why more advertisers are investing in commerce media.

New, improved measurement frameworks are replacing less meaningful methods that have relied on third-party cookies. The best of these frameworks use data clean rooms and other proven privacy tools to store and track reliable zero- and first-party data that consider the multiple media used by hybrid shoppers. When these frameworks are applied to networks or platforms with a broad reach—across, say, multiple retail and hospitality brands rather than just one retail chain—advertisers can amass a wealth of actionable data for more effective messaging and then measure, and celebrate, their improved ROAS and ROI.

Fetch, America’s Rewards App, empowers consumers to “live rewarded” and helps brands create lifelong customers through the power of Fetch Points. Fetch has sweeping visibility into what consumers buy, capturing more than $152 billion worth of transactions annually using cutting-edge AI and machine learning technologies. To date, Fetch users have submitted more than 5 billion receipts and earned more than $1 billion in rewards. The app is available to download on the App Store and Google Play Store and has more than 5 million five-star reviews from happy Fetchers.

Illustrations by Moritz Winert