As the digital landscape continues to evolve, advertisers are seeking more ways in which they can reach their customers with personalized one-to-one messaging to drive a lasting impact. With digital advertising capabilities becoming more accessible and effective, both the selling-side and the buying-side are shifting in order to embrace more advanced advertising solutions.
In particular, programmatic advertising has reached unprecedented adoption rates in recent years with the vast majority of digital ad dollars transacted using programmatic technology. With evolving marketplace dynamics, powerful third-party platforms have enables advertisers to expand their efficiency and effectiveness of various media programs as the complexity of the programmatic advertising chain continues to evolve.
There is no hiding the fact that programmatic display advertising continues to grow year on year, for example,eMarketer estimates that approximately 88% of US digital display advertising will be purchased programmatically by 2021, indicating that programmatic is the primary method of buying digital display ads, surpassing manual advertisement placement.
We examine 5 trends which are set to shape the future of programmatic display advertising in 2020.
1. Voice Activated Advertising Continues to Soar
Since the introduction of voice-controlled devices, they have rapidly gained massive adoption rates. According to the Smart Audio Report 2019, more than 21% of the population owns at least one smart speaker, and strategy analysts predict that by 2022 more than 50% of US households will have adopted the use of smart speakers.
While smart speakers have primarily been used to play music, they are increasingly being utilized for new activities, with research revealing that 57% of smart speaker owners have purchased via their devices with 25% of purchases being high-value purchases totaling more than $150. The extent of smart device’s advertising capabilities has provided advertisers with additional revenue-generating opportunities. Digital audio advertising currently equates to $935 million in revenue – an increase of 31% since 2018.
Organizations such as SoundCloud, Google, Pandora, and Rubicon Project continue to make substantial investments in programmatic advertising. For example, since Spotify launched their programmatic advertising platform in 2016, they have reported 94% growth year on year. Along with this, in 2018, Google provide users of their DoubleClick Bid Manager the ability to purchase programmatic ads on Spotify, SoundCloud and Google Play music.
Although programmatic audio advertisements has previously lacked a standardized ad format that has slowed its adoption rates, there are two primary templates for delivering audio ads which include Digital Audio Ad Serving (DAAST) and Video Ad Serving Template (VAST). With the standardizations beginning to improve, it is no surprise that programmatic audio advertising will continue to grow in 2020.
2. Increased Online Privacy Awareness
A trend which has been affecting programmatic advertising is online privacy. In 2020 and beyond, advertisers will need to adapt their strategies and become more strategic in how they acquire and use data in order to overcome these privacy concerns.
The advertising industry has faced and overcome many challenges over the years, but privacy concerns may be the biggest challenge yet. Governments also are aware of its severity and are responding with the implementation of strict date regulation such as the General Data Protection Regulation (GDPR) implemented in 2018. Also earlier this year, California passed the CCPA (California Consumer Privacy Act) which will come into effect on January 1st, 2020. All advertisers should be aware of the new policies and processes in place in order to comply with the regulation.
Programmatic advertising platforms have their limitations due to the cookie tracking mechanisms in place and many of these platforms still rely heavily on third-party data which can be difficult for programmatic advertisers to collect. With the strict regulations currently in place and those due to come into effect regarding cookies and their third-party data, it may become more difficult to reach target audiences and particular platforms. That being said there are still various ways to reach your audience with one of the best approaches including developing genuine relationships with consumers via digital channels.
As publishers develop stronger relationships with their audience they will be in better positions to collect data directly from them through the use of surveys, polls, user-generated content, online support, discussion boards and more. Apart from gaining data directly from their customers, advertisers and publishers can gain permission to deliver targeted ads. This would indicate that in the future, there will be a shift from third-party cookies to publisher data, which is promising as 61% of customers are comfortable sharing their data and appreciate interacting with brands.
The advertising industry are responding to these privacy concerns and are constantly examining new ways to comply with regulations and work new technology channels. This is definitely something to watch for in 2020.
3. Connected TV Growth
With the rise in connected TV use, they are fast becoming a key digital channel and completely redefining digital advertising as we know it as according to eMarketer there are currently 190 million connected TV users with this number expected to reach 204.1 million by 2022.
Organizations such as Netflix, Hulu, and Amazon Prime go hand-in-hand with connected TV and in the past year alone, have experienced a surge in use as emerging streaming services continue to accelerate investments in over-the-top (OTT) advertising. In November 2019, the long-awaited Disney Plus streaming service was also launched.
OTT advertising spend has experienced tremendous growth as subscribers to these services continue to increase, with Magna predicting OTT ad spend will increase to $5 billion in 2020. Advertisers have seen strong results from OTT due to precise targeting which allows them to create personalized ads matching their viewers’ interests. These short advertisements cannot be skipped and there are no ad blockers on connected TV meaning that if consumers want to want their selected content they will have to view the ad. Seamless CTA’s (call-to-action) and other various interactive elements allow advertisers to realize high ROI via programmatic advertising campaigns.
As consumers continue to consume digital content at an extraordinary level, advertisers who want to connect their target audiences with new and engaging ways will need to invest in a programmatic advertising strategy for 2020.
4. Digital Out-of-Home Advertising Expansion
Although online advertising continues to grow and lead the way with regards to traditional advertising methods, there is one exception – DOOH (Digital Out-of-Home). In 2019, the industry revenue from billboards grew approximately 0.6% equating to more than $8.6 billion in advertising revenue.
The introduction of LED billboards is an advancement of traditional billboard ad placement. The growth rate of this has been encouraging. Digital ad placement is not the only force to be reckoned with when it comes to programmatic advertising as outdoor advertising such as venues and billboards have grown in popularity in the past number of years.
The diversification of advertising channels and platforms can help advertisers reach their target audiences and billboards, in particular, can help stand out amidst the digital noise and reach people when they are out and about as digital billboards are big, bright and demand attention. That being said, it is no surprise that organizations are seeking means in which they can integrate billboards and other outdoor advertisement placements on programmatic advertising software tools.
5. The revitalization of Contextual and Native Ads
As consumer concerns regarding privacy increase and new regulations are proposed, some advertisers are looking at contextual advertising as an improved way to reach their target audiences.
According to BI Intelligence, they predict that native contextual ads will account for approximately 63% of mobile advertising revenue by 2020, a total increase of 53% since 2016. eMarketer also reported that native digital ad spend has increased year on year and is predicted to represent nearly 65% of all digital display ad spend in 2020.
What Lies Ahead For Programmatic Advertising in 2020?
With clear indicators that programmatic advertising will continue to be the future of advertising, the earlier organizations start learning about the opportunities programmatic offers, the better chance they will have to be able to reach customers and prospects with targeted and relevant ads.
It is no surprise that savvy marketers have already begun allocating a sizeable proportion of their advertising budget on programmatic advertising across the U.S, Europe, and China. For organizations that are yet to include programmatic in their 2020 advertising strategy – it is never too late. By targeting new programmatic advertising channels and platforms in 2020 will allow you to diversify and maximize your advertising revenue.