6 Advertising Technology Trends for 2020

ADvendio
8 min readJan 22, 2020

--

Advertising operations in the media industry are constantly evolving. With constant technical developments, shifts in consumer demands and opinions along with the introduction to new advertising regulations, staying in the know with advertising technology trends is hugely important for industry professionals in order to gain a competitive advantage.

The advertising technology market is expected to record exponential growth between now and 2023 but the future landscape of the advertising industry can be difficult to completely predict. As the landscape continues to fragment, advertisers constantly seek additional ways to reach customers and prospects with personalized one-to-one messages to ensure a lasting impact.

In order to prepare for the coming months, we have identified 8 advertising technology trends to be included in your 2020 advertising strategy.

1. Continued Programmatic Growth

Since the introduction of programmatic, the ad tech industry has been exponential growth as according to eMarketer programmatic now represents the primary method of buying digital media in the US. They also estimate that US advertisers will spend $60 billion on programmatic display advertising by the end of 2019, with 88% of all US digital display advertising dollars to transact programmatically by 2021.

It should be noted that duopoly will also have a growing share as by the end of 2019, the combined ad revenue of Facebook and Google’s media in the US will account for more than half of advertisers’ total budget for programmatic display.

Currently, digital ad spend in the US is dominated by the two main players, Google and Facebook, but Amazon’s ad spend is on the rise. Earlier this year they released a number of improvements in its ad-buying interfaces including:

  • Improved usability of DSP
  • Extended reach of sponsored products
  • Introduction of their rewards program tools
  • Incorporating customer acquisition metrics
  • Enablement of dynamic bidding for sponsored products ads

However, with Amazon continuing to build and establish its advertising product, with new mobile over-the-top (OTT) and connected TV advertising inventory entering the ad space in the coming years, it is no surprise that the Google & Facebook duopoly will continue to dominate in 2020.

2. Media Partner Consolidation

As advertising technologies continue to move in favour of ease and efficiency, it is expected that platforms will consolidate in order to provide customers addressable solutions as demands for ease and efficiency grows.

From MediaMath’s aggressive acquisition fundraising in 2018 to Amazon’s purchase of Sizmek’s ad servers earlier in the year it is evident that the ad tech market is prepared to deliver more end-to-end advertising solutions.

With the combined data of DMPs, CDPs, CRMs, and DSPs along with measurement platforms, advertisers’ efforts to boost ROAs with personalized targeting which reached the customer at every stage in their buying journey has been fuelled. This has resulted in rival platforms combining while other platforms are seeking ways to round out their offerings in efforts to offer more a more integrated data hub.

Advertising technology consolidation is good news for those in the programmatic media buying space, especially since integrating multiple platforms requires less coordination while lowering the possibility of bidding against oneself. It also allows you to control multiple platforms simultaneously with ease. On the other hand, other ad tech players have recognized the idea of the market being dominated by a number of smaller combinations could drive up the costs thus resulting in less control for advertisers with fewer platforms to choose from.

3. Supply Path Optimization

Programmatic advertising projected to reach approximately $100 billion in spend globally in 2020. Over the 5 years, programmatic has grown steadily and although this growth is astounding in any industry, it does not come without any growing pains and challenges. For ad tech, some of the biggest challenges to date have been related to quality, auction transparency, and fees.

Supply chain optimization allows programmatic advertising inventory buyers to clearly view which channels that they purchase their impressions from while they buy inventory.

Nowadays advertisers use SPO (supply path optimization) to easily and efficiently access a publisher’s inventory. Advertisers also seek more transparency regarding their programmatic buying and consider publishers’ pricing and discounts on CPMs (cost per thousand impressions). Ad tech company, MediaMath recently announced its commitment to 100% addressable and accountable media supply chain by the end of 2020 with the launch of its SOURCE initiative, which aims to address many aspects such as transparent and fraud-free supply chain from a verified publisher. eMarkerer reported in 2018 that only 40% of marketing dollars end up going to publishers and approximately 55% of their spend will be used towards ad tech tax or additional fees for buyer platforms, verification partners, resellers and SSPs. By using SPO, buyers will have increased transparency by bypassing DSPs and reducing the number of ad exchanges they currently use.

Previously SSPs have been compensated for the high volumes of inventory passing causing an increase in fraudulent ad traffic. With supply path optimizations, DSPs (demand-side platforms) can simplify how they work with SSPs. In 2020, we can expect to see improvements with SPO as there is an increased number of buyers who are looking to reduce the number of sell-side vendors they operate with.

4. Advertising Fraud Laws Increase Authorized Data Values

According to a report by the Association of National Advertisers (ANA), financial losses as a result of ad fraud have finally slowdown. The report also predicted that ad fraud losses would total $5.8 billion globally in 2019 which is almost an 11% decreased from the $6.5 billion global loss reported back in 2017. It should be noted that efforts to decrease advertising fraud has not happened overnight as publishers have been vigorously trying to implement brand safety measure such as ads.text and brand controls — proving that their concentrated efforts are playing an effective role in the decline of ad fraud.

Ads.txt was launched in 2017 by IAB Tech Lab in order to reduced programmatic ad fraud by listing authorized ad sellers in a file placed on a publisher’s site. DSPs can then crawl the public listing of authorized sellers to remove unauthorized impressions.

In August, Google introduced new brand safety-focused initiatives such as defaulting to ads.txt inventory, supporting apps-ads.txt and providing a central hub for brand controls in the interface. This means that only publishers that have adopted the standard and have placed ads.text files on their sites will be eligible for bids from Google Display and Video 360 (DV360). As part of an industry-wide effort to mitigate fraudulent ad selling, AdMob, Centro and other demand-side platforms enforced ads.txt.

Ad tech players have been making inroads to bring user privacy and authorized inventory together under bundled solutions offerings and with the CCPA on the horizon, the advertising industry is eager to avoid privacy-related violations. Privacy compliance is also driving a shift in ad tech capabilities with an increase in built-in tools and solutions to help brands maintain compliance. A recent report from Capgemini, a European consulting company, found that companies who meet GDPR compliance standards are out-performing those who are non-compliant across a wide range of metrics including impact on:

  • Customer Ratings
  • Customer Satisfaction
  • Customer Trust
  • Targeted Leads for Marketing
  • Revenue
  • Employee Morale
  • Organizational Reputation / Brand Image

With the impact that advertising fraud has had on the industry over the past number of years, it is no surprise that advertisers should prepare to embrace a wider array of holistic solutions focused on privacy compliance and brand safety in order to support more accountable and effective advertising efforts.

5. Inventory Value Measurement

Digital advertising was built on a foundation with open standards in which no single governing body regulates market transactions. As the ad tech industry matures both advertisers and brands are demanding more standardized ways of measuring the effectiveness of advertisements funneled via an ad exchange. Similarly, publishers are making heavier efforts to fully understand the value of their advertising inventory. With that being said, viewability has become a key metric to help define the value for both advertisers and publishers.

Viewability tracks ad impressions that appear “in-view” on the screen while providing an opportunity to be seen by consumers — as opposed to impressions served. For publishers, selling inventory on a viewability basis enables them to offer higher-quality inventory at a more competitive price.

With regards to the demand side, advertisers want to push cross-screen and cross-platform measurement standards to inform ad serving decision making.

As advertisers are always looking for the best space to display their ads, publishers fulfill these requirements by selling their ad inventory via multiple channels including programmatic guaranteed, private marketplaces and direct sales. Advertisers understand that high-value inventory will provide them with higher CPMs and better CTRs (click-through rates) and therefore will not settle for anything less than premium. Therefore inventory value measurement will be at the forefront of activities for 2020 ensuring advertisers and publishers can maximize their advertising revenue at every opportunity.

6. Creative Becomes A Priority

2019 marks the 25th anniversary of the first-ever banner ad and since then advertising has never been the same. An explosion of online advertisements, all aimed at attaining as many customer views and acquisitions as possible ultimately became white noise as a flurry of digital content which over time began to lose its effectiveness.

Each brand began to offer the same “digital experience”- using the same technology platform, addressing the same customer needs and much more.

In pursuit to offer a customer-centric approach to answering all customer wants, desires and needs with digital, advertisers and publishers have forgotten about a crucial aspect — creativity. Many advertisers recognize this issue and the pressure is swinging in the direction of bringing creativity back to the core set of competencies. An organization that has realized its importance is Accenture Interactive which has been on a creative buying spree over the past number of years acquiring multiple companies including Droga5, Karmarama, and Fjord to boost their creative and brand communication capabilities. Deloitte Digital has also deepened their creative with the acquisition of Heat and Acne.

It is expected that this trend will continue in 2020 with more advertising agencies emphasizing creativity over customer acquisition statistics and numbers.

Looking ahead at the Advertising Technology Industry

Throughout 2020, advertisers should expect a shift in the areas highlighted above from creative rejuvenation to the growing consolidation among media partners. Players from both the buying and selling sides are making strategic shifts as consumer behavior, digital regulations and advertising technical capabilities continue to evolve at a rapid pace.

For publishers and advertisers, 2020 will present new opportunities that will be predominantly driven by a customer-centric approach grounded in both brand experience and privacy. It will be important to monitor activities and understand the wider picture as changes continue to happen in the ad tech industry.

Originally published at www.advendio.com on January 21, 2020

--

--

ADvendio

Publisher’s all-in-one business software solution for efficient ad sales management built on Salesforce with customers in 25+ countries. http://advendio.com/