AD TECH INSIGHTS
by Roman Vrublivskyi
Posted on Apr 29, 2024
The Future of Programmatic Advertising: Key Trends Shaping the Industry
by Roman Vrublivskyi
by Roman Vrublivskyi
Nothing in this world is permanent except impermanence, and this statement is also true for AdTech as it rolls with the world and begins to follow new currents. Of course, we follow all programmatic ad industry trends, analyze them to identify the promising ones, and implement them in our products.
Since programmatic ad spend continues to grow and is projected to reach almost $780 billion by 2028 (in 2023, it was estimated at $546 billion), we can expect it to remain profitable and prospective in the market. Therefore, keeping an eye on trends is becoming even more important.
If you are ready to create ad network or ad exchange, contact SmartHub team to start.
In this article, we’ll talk about top advertising trends that are forecasted to shape programmatic advertising future and present.
In recent years, programmatic advertising has emerged as a game-changer. This automated, data-driven approach allows advertisers to deliver personalized and relevant content in real time, optimizing campaign performance and maximizing ROI. As a result, programmatic advertising has become a cornerstone of modern marketing, enabling advertisers to reach their customers with unprecedented precision and efficiency.
Following programmatic updates and the latest innovations is crucial to seize the opportunity and remain competitive.
This phenomenon is not new on its own, but it has become one of the hottest programmatic media buying trends. White Label is a ready-to-use programmatic platform, which the provider rents out to a certain company as if on lease. However, a White Label platform can be customized for a certain brand, i.e., the logo and interface colors can be changed.
Such a solution is obviously useful for companies that seek more control over their advertising inventory and expand their advertising capabilities. White Label also ensures maximum transparency of all programmatic processes and provides a high degree of brand protection.
White Label is no longer the privilege of large companies; it is now available to small startups as well. Any brand can develop its programming system in parallel with the development and expansion of its business. By eliminating the costs associated with third-party services and data administration, businesses can reinvest more in active marketing initiatives. If everything else is equal, this should lead to a higher return on advertising investment (ROAS).
With the development of ML and AI, automation is becoming more omnipresent in programmatic ads trends. Neural networks, big data insights, and GPT-3 deserve special attention. All of these will remain relevant in 2024, as AI technology reduces the amount of human labor as well as increases sales efficiency.
The automation of the advertising process is a transformative development that has already exerted a significant impact on marketing initiatives within companies. One notable example is automated bid assignment, which enables automatic bidding for keywords and ad groups. Beyond being a remarkable time-saving tool, this automation also empowers businesses to optimize their price per conversion, resulting in a considerable boost to their Return on Investment (ROI).
By entrusting the bidding process to sophisticated algorithms, advertisers can capitalize on real-time data and market programmatic insights, which allows them to make more informed decisions. This level of automation not only streamlines operations but also enhances the overall effectiveness and profitability of advertising campaigns, helping businesses stay competitive and achieve their marketing objectives with greater precision.
Personalization has always been a key to effective advertising, and AI can be a great help here. Advanced tools can analyze customer data at scale to segment the audience and create tailored advertising content. This way, the required amount of manual work is reduced significantly, but it’s still essential to follow two critical recommendations. First of all, anything generated by AI always requires a thorough review performed by a human (this is a way to maintain brand voice and improve the overall quality of content). Secondly, never add sensitive data to prompts. It can be used to generate responses to other users, which will result in data leakage.
Apart from personalizing the ads themselves, marketers can benefit from the targeting capabilities of programmatic platforms. Along with filtering functionalities, they are getting more and more enhanced, which allows advertisers to deliver personalized experiences to the right users. The more personalized the ad is, in all aspects, the better, as personalization enables driving conversions and increasing ROI.
What about cookieless advertising? Of all the trends in the programmatic landscape, this one is the most fickle. There have been discussions for several years that Google would discontinue support for cookies. It was originally scheduled to end support in the second quarter of 2022, then moved to 2023, and now it’s been pushed again to 2024. So, you still have some time to decide how to proceed.
Third-party cookies are responsible for a variety of ad settings, including targeting, frequency limitation, measurement, and attribution. However, if they will no longer be supported by Google and other systems, something should replace them.
Proprietary data can provide advertisers with a huge amount of really useful information, from user preferences to consistent purchase sequences. This data is also full of other possibilities, and marketers can use it in the following ways:
We must remember that contextual targeting is not a new phenomenon, but as third-party cookies disappear, we can expect to see new technologies that will allow us to collect the data we need for marketing. The planned reforms will force marketers to experiment with new methods of delivering ads without compromising privacy.
But this is rather good news. After all, the greater the privacy on the Internet, the greater the trust users have in brands.
Along with the growth of the programmatic advertising market size, the programmatic advertising landscape is also changing. For instance, recently, one of the largest independent DSPs, The Trade Desk, offered direct integration with premium publishers through its OpenPath initiative, which many interpreted as a direct threat to the traditional SSP role.
Meanwhile, SSPs are increasingly partnering with media agencies. Previously, such relationships were traditionally facilitated by DSPs. For example, PubMatic, formerly an old-school SSP, reported in 2021 that its total desktop business (comprising display and online video) performed with revenue up 26% yearly on top of the prior year’s 28% growth.
Helping advertisers buy higher-quality displays is, in fact, acting as a DSP. Another example is Integral Ad Science, an ad verification company. However, recent innovations have made it work more like a large SSP.
2024 is a time for software platforms to diversify their business models, create their own inventory ecosystem that brings buyers, sellers, and publishers together on one platform, and make that system coherent, efficient, and transparent.
5G is the fifth generation of mobile communications, capable of 20 times the speed of LTE (Long-Term Evolution) and reaching 20 GB/sec.
Why is that important for programmatic advertising? Higher download speeds mean faster bids, which implies more efficient platforms. In addition, this higher Internet speed allows for creating ads in higher dpi and puts more emphasis on video ads in mobile format.
Another important advantage is the speed at which the page loads. Many users install ad blockers because it increases the page load speed. Accordingly, if the loading speed increases, then the ad blocker won’t be needed, which means the visibility of ads will also increase.
By 2024, COVID-19 is almost a memory, which means that there are more people on the city streets. More people means more potential customers who can see outdoor advertising.
In 2022, digital out-of-home advertising began to finally wake up from its pandemic hibernation and gain momentum, accelerating programmatic growth and spending. Statista expects this type of advertising revenue to reach almost $21 billion by 2028.
DOOH advertising enables the creation of unique, creative campaigns that attract multiple customers. Given that programmatic targeting functionalities continue to evolve and become increasingly sophisticated in this advertising landscape, it becomes a very powerful tool for increasing reach.
Besides, DOOH advertising will be a very strong player in the future cookie-free world because its targeting algorithms are inherently different and respond to other triggers.
Now, numerous brands are releasing voice assistants that can be accessed through a smartphone or PC (speakers are sold separately). Such assistants can control smart home systems, search for something on the Internet, and turn music or videos on and off. They have great potential to increase search queries, as well as push the trend toward more flexible ad customization.
In addition, voice ads can also include audio ads, which are usually placed on streaming music services like Spotify and Apple Music. Such advertising is still not very popular, but it is worth noting that it can be very effective due to the high level of user concentration and lack of banner blindness to this type of information transfer.
While voice ads are still in their early stages, their potential cannot be overlooked. As technology continues to evolve, so will the effectiveness and popularity of voice-based advertising. Early adopters can establish a strong foothold in this space, driving brand awareness and building meaningful connections with their target audience.
The video game market is expected to reach over $282 billion in revenue in 2024, while by 2027, its market value is forecasted to exceed $363 billion. In addition, 62% of adults and 76% of children under the age of 18 in the U.S. play video games (as of 2023), making it one of the most promising markets in terms of advertising.
Video game advertising allows for monetizing them and generating income even from small indie projects. It can be a tool for engaging the user in gameplay, which is a truly unique phenomenon. Perhaps no other advertising platform can boast the same high level of engagement through advertising.
We are talking, of course, about rewarded videos, which are among display latest advertising trends. Such videos allow you to give the user a prize in in-game currency after watching the video. 62% of developers said their user retention rates increased after the introduction of video ads with rewards.
Such advertising works especially well with fine-tuned targeting because if the user sees a useful ad and then also gets some bonuses in the game, the positive impression is reinforced, and the loyalty to both the advertised brand and the game increases.
So, if you are looking at in-game advertising but are hesitant to approach it, 2024 is a good time to start working in that direction.
VR and AR keep conquering the advertising market, with expected worldwide revenue of $174 million and over $5 billion, respectively (in 2024). Marketers are steadily adopting these technologies. For instance, AR can be used to allow customers to visualize products in their homes. Facebook has already allowed advertisers to launch ads using augmented reality camera effects.
But what about programmatic advertising? Can it enter virtual or augmented reality? Well, currently, there are no programmatic platforms supporting such ads. However, in the future, we can expect VR and AR ads to become a part of the programmatic environment. These technologies allow for creating an immersive experience, so that’s just a matter of time. In the meantime, it’s essential to keep an eye on the evolving digital landscape. Doing so is a way to adopt top advertising trends quickly and remain competitive.
The future of programmatic TV advertising seems pretty bright. For instance, in the US, CTV ad spend was expected to exceed $25 billion (in 2023), which is an increase of over 21% in comparison to the previous year. By 2027, this number is forecasted to surpass $40 billion. This programmatic advertising growth is inevitable since the number of video streaming users keeps growing — by 2029, it’s forecasted to reach 6.3 billion.
CTV advertising, a part of programmatic video trends and not only, is much more efficient than traditional TV ads, allowing for precise analytics, cost-effectiveness, and high viewability rates. Since more and more people are subscribing to streaming services, advertisers across multiple industries have the opportunity to reach their target audiences. If you aren’t among them yet, consider reviewing your strategy.
Blockchain is one of the most promising ways to combat ad fraud and enhance transparency in the programmatic environment. Yes, its development (in terms of advertising) is still in its early stages, but the potential is huge. With blockchain technology in place, advertisers can be sure that they reach real users, not bots (every impression is authentic), while publishers can validate their traffic. The whole advertising ecosystem simply gets safer.
There are no success stories to share at the moment, but blockchain is projected to gain momentum in programmatic advertising, so tracking this progress is essential.
Talking about the programmatic advertising news, the sphere has already reached significant heights, but it keeps evolving, and all the parties involved in the industry should stay on top of the trends. The reason for this is simple — being aware of the current and future practices allows businesses to remain competitive and reach their goals more effectively. Moreover, certain trends, like cookieless advertising, steadily become a must to adopt.
SmartHub is always moving with the flow of technology and latest programmatic news, so check out our blog for the latest industry news. If you have any questions regarding boosting your performance or reinforcing capacities with current programmatic trends, don’t hesitate to contact us and we will help to make your wish come true with our White Label technology!
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