Programmatic advertising is arguably one of the most important trends in advertising that is requiring a root and branch reformation of every tier of the media industry. According to research from eMarketer more than 82% of U.S. display ad spend will be purchased using programmatic technologies by 2020, with more than $65 billion spent on programmatic digital display advertising.
The Zenith report suggests that programmatic will become the default of all trading types of media, ultimately highlighting that the boom of programmatic advertising will continue its momentum for years to come.
With such acceptance rates across the media ad sales industry, we examine what is in store for the future of programmatic advertising.
1. Personalized Programmatic Advertising
Programmatic customization is on the rise, allowing advertisers to improve performance and provide higher relevancy with personalized messaging.
Ample amounts of data allow advertising creatives to dynamically change to be more relevant to users with ads adapting factors including location, device type, demographics and time. The main benefit of this technology is that it can generate feedback quickly allowing marketers to optimize creatives in real time.
There have been a number of case studies illustrating the effectiveness of personalization in programmatic campaigns. For example, Mindshare, a media agency, developed an always-on retargeting campaign in their Indonesia subsidiary using dynamic creative optimization technology for AirAsia, allowing their programmatic team to dynamically servers thousands of ad versions based on the last destination travellers searched for on the site. This resulted in Mindshare creating over 5,500 ad versions in three months saving an estimated 276 days of production time and generating an overall higher return on investment for the airline.
2. The Rise Voice Activated Advertising
Another shift in focus for advertisers has been the introduction of a new and compelling media channel — voice advertising. With over 56 million in-home smart speakers shipped in 2018, the purchase and use of voice-activated technology are skyrocketing as brands are constantly seeking new ways to engage with active “listeners” on their household smart devices.
Voice-activated technology providers such as Google, Amazon, and Apple are continually developing ways to monetize their product lines by implementing audio ads on voice search devices. It should be noted that streaming audio platforms such as Spotify, Pandora and Soundcloud have all started monetizing their applications with ad impressions.
Audio ads in voice are similar to the upcoming advancements in digital-out-of-home (DOOH) advertising, which will take time to develop and find a way onto media plans as it is a new format in a completely new channel. But with this growing market as consumers to search for products or services via in-home smart devices, brands can provide value by serving a compelling audio ad guiding the user in the right direction.
Ultimately we are eagerly awaiting further advancements in voice-activated advertising that will take internet-based searchers in a new direction in 2019.
3. The Introduction of 5G
The 5th generation of cellular mobile communications such as 5G underwent its first phase of commercial deployment in March 2019, with Huawei launching the first systems capable of 5G CPE. This means that devices are now able to support speeds of 1000mbs — 10 times more than 4G. This high bandwidth of 5G will enable the ad tech ecosystem to load ads quicker reducing millisecond delays that usually result in users leaving the site. The rise of video brings advertising the opportunity to deliver high-resolution ads to their target audience.
For programmatic ad buying, this represents both exciting and appealing opportunities. It is estimated that by 2025, there will be approximately 1.1 billion 5G connections. With faster transactions, this indefinitely speeds up how nimbly ads can be presented to viewers.
4. Blockchain & Ads.txt to the Rescue
The programmatic AdTech industry has had ongoing issues of transparency and ad fraud causing advertising to lose an astonishing $19 billion in 2018 alone to fraudulent activities. In order to curb ad fraud and promote transparency, advertisers have high aspirations for block-based products and ads.txt.
BlAdTech (Blockchain+AdTech) is based on the principle of decentralization which aims to solve the most common issues facing advertisers and publishes. Blockchain products have been able to tackle ad fraud by removing domain spoofing and verifying the legitimacy of publishers allowing transactions using cryptocurrencies.
Companies such as Unilever have invested in blockchain for the future of programmatic buying. But this has not been without limitations as the technology is currently unable to stay up with the speed of programmatic buying along with issues encircling sustainability, security, and regulations.
Another way ad fraud can be curtailed is by preventing unauthorized reselling of ad inventory. Publishers can now host ads.txt — an Interactive Advertising Bureau-approved file on their servers that lists all the companies allowed to sell the publisher’s inventory.
However, the alternative solution of ads.text has seen an exceptional rise since 2018, and as of February 2018, 51% of websites worldwide have adopted ads.txt. It is important that blockchain is not discounted all together as it still currently presents the best solution in the long-term. With a number of companies currently using blockchain, it is expected that others will continue to test throughout the year.
5. Programmatic Video Advertising: Over-the-top (OTT) and Connected TV (CTV)
Over the past year, there has been a number of mergers acquisitions along with efforts between large networks and broadcasters which have addressed the measurements of inconsistencies between traditional TV and digital.
With the advancements of programmatic ad tech and partnerships with key players, brand marketers can now measure the performance of programmatic TV campaigns using traditional metrics. But forward-thinking brands have supplemented TV metrics with modern metrics such as cost-per-completed view to attribute brand lift and performance to OTT advertising.
There has been an increasing OTT inventory becoming more accessible to brands of all sizes who are looking to engage their audiences on various devices that their customers are using to stream digital video content. Hulu recently released an automated private marketplace allowing brand advertisers to purchase Hulu CTV inventory with their own DSP’s while avoiding minimum media commitments.
Although OTT viewership is still only a small fraction of the broader video and traditional TV landscape, this is constantly changing. In fact, in the past 5 years, the number of OTT “only” U.S homes has tripled. Indicating that ad-supported OTT inventory will be a strong contender for TV advertising dollars as there is an increased shift away from traditional television.
With precise targeting capabilities, improved measurement and more access to ad inventory, it is no surprise that brands will continue to invest more of their media in OTT advertising.
6. Programmatic Digital-Out-of-Home (DOOH) Inventory
Out-of-home advertising is continuing to grow steadily alongside digital advertising. Outdoors advertisements on billboards, large venues such as stadiums and festivals and transport reach record levels in 2018. According to Zenith Advertising, global investments in OOH advertising exceeded $38 billion in 2018, with it being noted OOH is the fastest growing non-internet based advertising channel.
According to Programetrix programmatic experts who have engaged with ad tech influencers, they are confident that access to DOOH inventory will become available via programmatic platforms on a beta level by late in 2019. As online brands search for ways to engage audiences outside of internet silos, it seems they are finding success avoiding “digital noise” and are breaking through traditional media channels which are becoming increasingly programmatic overtime.
By analyzing mobile location-based data can aid pin-pointing audiences in order to precisely placed billboard ads (programmatically) in specifically targeted locations where target audiences are most likely to be. Further down the line, it is expected that the demonstration of cause and efforts such as an increase in foot traffic or website visits due to the exposure of programmatically placed outdoor advertisements.
Although this technology is in the early stages, advancements will continue to be made as technology providers connect data sets with inventory sources. With continued developments, this is an exciting new media channel not to be missed.
7. Continued Growth for Programmatic TV
There is a growing desire within the media industry to bridge the gap between television and online advertising. Although with traditional TV advertising slowly decreasing and programmatic TV buying increasing, TV advertisements could increasingly be purchased programmatically. PWC predicts that by 2021, programmatic television advertising will represent approximately one-third of global TV ad revenue.
Despite certain challenges which come with programmatic TV such as the need for greater diversity and concerns regarding transparency and brand safety there are also multiple benefits. One of the main being the new format types on connected televisions such as unskippable 15 and 30-second video ads, which are both immersive and engaging. Connected TV campaigns allow for precision targeting based on increasingly accurate consumer data which is now more readily available.
Automotive brand Volvo had significant success with a programmatic TV campaign which ultimately generated significant sales. This campaign involved delivering interactive video ads via Roku boxes and Samsung TV’s which were personalized based on location and local dealership information. Results of the campaign included approximately 526,000 unique engagements across 95,000 homes and impressively the exposed group saw an increase in sales of 35% in comparison to the control group.
What Lies Ahead for Programmatic Advertising and Media Ad Sales?
With programmatic at the forefront for those in the media industry, it is important to stay up-to-date with the trends as the industry continues to evolve.
Despite a bumpy 2018, programmatic ad tech is set to have a resurgence in 2019. Although it may be slow for 5G to gain prominence in 2019, voice-activated advertising, personalization, blockchain, DOOH, over-the-top and programmatic tv appear to be trends that will bring about a chance to the programmatic advertising landscape in 2019.