6 Trends Shaping the Future of Digital Advertising Sales for Ad Ops
Ad operations have seen significant increase in digital advertising sales investment. According to eMarketer, digital ad spend will continue to rise to $129 billion by 2021, and will represent a majority of all U.S. investment in advertising. Programmatic spend will continue to account for over two-thirds of digital display ads transacted in 2019, representing a large percentage of digital expenditure at $45 billion.
We examine key trends shaping the future of digital advertising sales:
1. Digital Video Ad Spend Continues to Soar
Video and programmatic’s share of the TV market will continue to grow. It is predicted that video ad spend will rise to $13.43 billion, constituting for nearly two-thirds of non-social display ad spend. Video will remain the most powerful advertising medium of 2019 and will continue to rise through 2020.
Private Marketplaces (PMPs) are winning a growing share of video ad spend as marketers aim for premium inventory and improved performance by displaying ads on high-quality sites.
With formats such as outstream and social in-feeds now accounting for more than half of video ad spend, video content is most often being watched by users on mobile devices. Thus, these apps are primed to equate to an increased share of video ad spend in 2019.
According to Criteo, PMPs will drive more investment in video via programmatic channels, resulting in Connected TV (CTV) and over-the-top video inventory (OTT) to rise in 2019.
2. Digital Out-Of-Home Domination
Brand advertisers and ad agencies have been moving their budgets online, spending money on programmatic advertising including display, native, video, and mobile due to advertising opportunities and technological advancements.
The domination of online media spend is about to change thanks to digital out-of-home (DOOH), which empowers billboards with ad technology targeting capabilities including geofencing, tracking, retargeting, personalization, attribution, and measurement.
Considering the current state of ad technologies, the transition of out-of-home to digital is inevitable from a business perspective. It has already begun and is gaining momentum. International OOH providers such as Clear Channel Outdoor, are currently investing in various new enabling technologies.
In 2017, Clear Channel launched a PMP with ad exchange company Rubicon Project. They opened inventory on nearly 1,000 digital boards to programmatic buyers through real-time bidding (RTB) pipes. Clear Channel’s partnership with Rubicon is the closest development to a real-time OOH auction as they sell their inventory via RTB pipes in Rubicon’s PMP, as the transaction happens within 60 seconds of availability making it as close to real-time as possible.
Shockingly, only 39% of planners know it’s possible to buy digital OOH programmatically, according to AdExchanger. Experts project out-of-home to grow by 12% in ad spend by 2020, faster than other traditional media due to opportunities in digital. Therefore, it’s something that advertisers should keep an eye out for in 2019!
3. Increased Programmatic Mobile Ad Spend
Mobile programmatic advertising is transforming the way buyers and sellers offer advertising in mobile format and is one of the fastest growing areas in the world for marketing. The automation of buying digital ad sales within ad exchanges and inventories is at the heart of mobile advertising. With a number of variations to this basic concept, display, search and rich media are the formats driving mobile ad spend now and will continue in the coming years.
The IAB indicate that 85% of advertisers and 72% of publishers are currently utilizing programmatic advertising. This number is only expected to grow, with $36 billion mobile programmatic ad spend projected by 2019, according to AppNexus. In-app ads dominate mobile programmatic ad spend. This should not come as a shock considering that the average U.S. consumer spends 89% of its time on their smartphones in-app.
Mobile programmatic advertising helps marketers understand consumers’ experience through behavioral patterns thanks to:
- Geo-location data
- User data on their browsing habits
- User activity across social media platforms
- The use of mobile identifiers, which allows for greater retargeting, allows advertisers to build long-term brand identification and improved impressions
With a prediction of 71% of digital spend in 2019, mobile will continue to hold a large share of digital ad spend.
4. Artificial Intelligence Powered Digital Ad Sales
Artificial intelligence (AI) has been playing a role in a number of technology-centered industries with a dynamic market structure such as retail companies, hotels, and airlines. Therefore, it is no surprise that AI is on the rise in ad sales management.
According to Salesforce, 60% of marketing leaders believe AI can help them run more effective programmatic campaigns.
AI leverages large quantities of data and patterns to make predictions. Rather than replacing sales executives, AI will assist them in better decision making and provide publishers, advertisers, and agencies with better recommendations.
In 2018, a number of digital companies such as IBM, Amazon and General Electric, announced investments in AI to develop several solutions. They currently work with advanced personalization and machine learning to improve user engagement.
Salesforce, as an example, has embraced AI for both sales and marketing. Salesforce Einstein, a set of advanced AI capabilities, provides customers with the ability to:
- Be more predictive
- Deliver more personalized customer experiences
- Automate repetitive and time-consuming processes.
The promise of AI is growing as it benefits from an explosion of digital data and cloud computing. Companies with large data sets and strong computational advertising capabilities will begin to take the lead. They will develop and offer improved AI-based digital ad sales solutions and systems to prevent ad fraud and prepare data-driven media packages with actionable performance data.
Experts are optimistic about their forecasts and predict an increased wider adoption of AI across the digital ad sales landscape. It is definitely something to watch in 2019!
5. In-House Digital Ad Operations
In an effort to have greater control over user data and ad placement, it is expected that more companies will continue to move their ad operations in-house in 2019, including paid, display, social and digital media buying. This forces agencies to rethink how to improve their relationship with advertisers and publishers.
By 2020, German pharmaceutical company Bayer will take all of their digital media buying in-house. They will continue to work with external agencies who manage their communications planning and offline media, along with using creative agencies for campaigns.
Josh Palau, VP of digital strategy and platforms at Bayer explained that they want to increase the company’s internal expertise around marketing, to drive better performance of its buys and decrease the cost of its buys and cut off agency fees.
With a current high focus and ongoing development surrounding the consumer data privacy regulations such as GDPR, this will accelerate trends as brands will want to have greater ownership and control of their user data. Publishers claim that in-house ad operations can lead to significant cost savings and quicker turnaround times.
Media agencies are still making beneficial contributions regardless of whether advertisers chose to take their programmatic capabilities in-house either partially or completely. Agencies are still important to the relationship with advertisers and publishers in terms of strategic thinking and communication processes.
According to Digiday research, 73% of marketers said hiring talent is the most significant obstacle to bringing media in-house. In order to overcome this issue, Bayer has partnered with agencies to in-source its digital and programmatic media planning, selling, buying, execution, strategy and analytics during this two-year project.
6. Digital Transformation
Digital transformation is a “hot topic” in 2019, and a buzzword which businesses are taking very seriously for their strategy.
The 2018 State of Digital Transformation Report from IDG, noted that:
- More than 44% of organizations have begun implementing a digital-first approach to business strategy, operations, and customer engagement
- Only 7% of companies are fully implementing their digital-first approach
Publishers in Scandinavia such as Schibsted Media Group, are embarking on a digital transformation to achieve their digital growth ambitions, such as incorporating advanced data analytics and technology to improve products and deliver customer services. This is allowing them to help customers in ways they did not realize was possible.
The company showed a glimpse of their digital transformation to the World Association of Newspapers and News Publishers (WAN-IFRA):
- Digital activities drive 62% of the company’s revenue
- Online classifieds is their largest revenue generator and is set to grow between 15% to 20% in 2019
KURIER, one of the largest media publishers in Austria, has also undertaken a digital transformation. They have integrated their online publications to consolidate digital advertising operations. With total monthly traffic of 35 million page impressions, an automated process and better data flows will improve both collaboration and efficiency across digital ad sales, operations, and accounting.
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Digital Advertising Sales: What Does the Future Hold?
Advertising operations are constantly changing due to evolving business structures, progressive supply chain management, and technological advancements.
In an industry where the price of doing the same thing is far higher than the price of change, ad op professionals often require multiple ways to optimize their ad management.
With digital at the forefront for many advertisers and publishers, it is important to stay ahead of the trends as the industry continues to grow.