A few years ago, the digital world slowly began prioritizing consumer privacy through both legislation, including Europe's General Data Protection Regulation, and the business decisions of tech giants like Apple, which updated its privacy features so consumers could choose which companies track them across apps. That update wiped out almost $16 billion in advertising revenue in 2022.

Google's plan to restrict third-party cookies in its Chrome browser in 2024 will further upend digital advertising by making it harder for advertisers to reach people and harder for publishers to drive value from digital ads.

These regulations are the reaction to an ecosystem that's taken a laissez-faire approach to how industries handle sensitive data, Ana Milicevic, a principal at the digital-ad consultancy Sparrow Advisers, said.

And now it will be much harder to use consumer data to target people across the web, vastly reducing advertising's effectiveness.

To use precise consumer data, advertisers now must work directly with the company that owns that data — like the retailer that knows what its customers bought or the media company that knows what its audience watched.

With the rise of streaming and digital services and a highly volatile economy that's created more pressure on businesses to drive revenue, nearly any company that can sell ads will sell ads.

This can be seen in the rise of so-called retail advertising, where retailers such as Best Buy, Macy's, and Walmart are selling ads powered by their data — taking a page from Amazon's $38 billion ad business. Streamers including Netflix are building new ad businesses, while platforms like YouTube are trying to bolster their existing ad businesses with more content, such as live sports. Meanwhile, social platforms like TikTok and Instagram are expanding their ad strategies as they try to become shopping platforms.

"In a world of less data or worse data, whoever has the least-bad data wins," Brian Wieser, an advertising-industry analyst, told Business Insider.

Companies are already paying penalties for violating data-protection laws. In 2022, the beauty retailer Sephora paid a $1.2 million settlement over violations of the California Consumer Privacy Act.

This environment is a major opportunity for retailers. Advertisers still need data to find consumers and measure their ads' impact, even if that data no longer flows freely.

Retailers of all sizes, including Walmart, Target, Instacart, Best Buy, and Kohl's, have seen Amazon's booming ad business and are ready to use their data about how people shop to power digital advertising. Unlike selling clothes, groceries, or electronics, advertising is a high-margin business for retailers. Even companies that aren't traditional retailers, such as Uber and Marriott, have kick-started ad businesses.

These retailers promise advertisers a way to target people with specific messaging — such as serving an ad for conditioner to someone who recently bought shampoo. And they promise a way for advertisers to track whether people bought a product after seeing an ad.

And as third-party cookies disappear, advertisers are warming up to retailers' pitches. Morgan Stanley estimates that retail media will make about $130 billion next year.

Retailers' pitches are resonating with advertisers because retail media promises accurate targeting and consumer insights with minimal brand-safety risks, Milicevic said. "It gives you the right amount of control that you would expect to have in a walled-garden environment," she said.

There are still challenges, to be sure. These businesses are costly to build and maintain, and there's now more competition than ever before — Gap unveiled its ad business to much fanfare in early 2022, only to shutter it about a year later.

The pandemic pushed the world to embrace streaming services. These services also benefit from the increased push for privacy that's devalued online advertising. Advertisers are looking for platforms with first-party data that consumers are willing to share — such as email addresses — to target and measure their ads, and streaming services are chock-full of such data.

The debate about whether streaming businesses could survive solely on user subscriptions ended in late 2022 when Netflix abandoned its longtime anti-advertising stance and launched a subscription tier with ads to grow revenue. Soon, Amazon Prime will also pull the trigger and sell ads for the first time.

While many of these businesses are taking dollars from traditional TV businesses, they also promise audience-targeting and audience-measuring capabilities that have long been a major draw of digital advertising.

Streaming services are also at war with each other over premium content they can use to sell ads, and live sports have become the next major front. Live sports have long been the stronghold of traditional TV, but streaming services have grabbed that content — and the audience and advertisers that come with it — with both hands.

Apple has a deal with Major League Soccer. Prime Video launched the NFL's "Thursday Night Football" in 2022 and expanded that by adding a new game this year, "NFL Black Friday," that debuted on November 24 with ads from big brands including Columbia Sportswear and Bose.

And this year, YouTube pushed into the NFL with its deal to stream "Sunday Ticket" games. It was a big coup for YouTube's new CEO, Neal Mohan, who took over the top spot just a few months after that announcement.

"'Sunday Ticket' was a big tipping point," Vinny Rinaldi, Hershey's head of media and analytics, said during a panel at the Advertising Week conference in October. "It was the most scalable thing in the NFL that suddenly went to a platform."

He told the Advertising Week audience he envisioned a world where advertisers would be able to insert ads dynamically into live games in a way they couldn't do when the NFL was only on linear — cable and satellite — TV. "If there's a Taylor Swift moment, how do you get involved in that? Right now, if you didn't have a buy, you're not getting in there," he said.

The streaming land grab goes beyond live sports. Disney plans to buy out Comcast and acquire Hulu, one of the largest and longest-running advertising-supported streamers.

Despite streaming further fragmenting TV programming, it's also helping advertisers reach audiences abandoning linear TV, Weiser said.

Privacy initiatives have also given so-called walled gardens, including Meta properties and TikTok, more power with advertisers. "Walled gardens in general are empowered with privacy laws," Wieser said.

Without third-party cookies, advertisers are increasingly relying on platforms' own data on users, and social platforms have sophisticated tools that help advertisers reach specific audiences — such as someone looking to buy a car — and measure if those ads worked, including finding out if that person went to a car dealership after seeing an auto ad.

Apple's privacy feature impacted Meta's advertising revenue, causing the social-media giant to rebuild its advertising technology with machine-learning tools that help advertisers find customers across all of Meta's properties. Those efforts have largely been successful, with advertisers spending more money on Meta ads, and Meta posting better earnings attributed to its advertising revamp.

And TikTok is developing privacy-safe ad products to lure creators and advertisers targeting younger audiences within the app.

TikTok and Instagram, which Meta owns, are also pushing into social shopping with features allowing influencers to promote products to their followers and allowing consumers to buy products from the apps — giving advertisers a way to drive sales directly from influencers.

But this increasing power from walled gardens also gives advertisers fewer options for where to buy ads.

"We know that marketers want to diversify slightly but they're still focusing on areas with high-quality data," Wieser said.