The Next Big Programmatic Advertising Trends In 2023

“Nothing in this world is permanent except impermanence“. Most likely, the person who said it was very right. After all, the impermanence of the world has recently reached the point where we do not know what will happen the next day or the next hour and whether it can turn our whole life upside down, as it has happened several times in recent years.

This same statement remains true for ad tech as well, as it rolls with the world and begins to follow new currents. Of course, as specialists in this field, we follow all trends, analyze them to understand which ones are really promising and which are not so promising, and implement them in our products.

Spending on advertising and advertising technology continues to grow steadily, which means that this area remains profitable and perspective in the market.

digital advertising spending worldwide stats

In this article, we’ll talk about a few programmatic advertising trends that will definitely be relevant in the coming 2023.

White Label Solutions

This phenomenon is not new on its own, but in 2022 it has gained a new wave of popularity. 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, and the location of different sections can be defined.

Such a solution is obviously useful for companies that seek more control over their advertising inventory and expand their advertising capabilities. White Label also allows ensuring maximum transparency of all programmatic processes, as well as providing 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. So 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).

Automating everything and anything

Automation saves time and resources to channel into further business development. And with the development of machine learning and AI, automation is becoming more omnipresent in programmatic advertising.

Neural networks, big data insights, and GPT-3 deserve special attention. All of these will remain relevant in 2023. AI technology reduces the amount of human labor as well as increases sales efficiency. Many brands are actively using AI to promote their products, as it is an extremely profitable and timely investment.

The automation of the advertising process already has a huge impact on the performance of marketing initiatives within a company. For example, automated bid assignment allows automatic bidding for keywords and ad groups. It turns out that in addition to being a big time saver, it also allows you to optimize your price per conversion to increase your ROI.

Cookies are done?

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’s systems, something should replace them.

In this case, 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.

Advertisers can use proprietary data in the following ways:

Expanding the set of user data;
Overcoming registration barriers;
Audience segmentation and contextual targeting.

We must remember that contextual targeting is not a new phenomenon, but as third-party cookies disappear, we can expect to see new technologies emerging that allow us to collect the data we need for marketing. The planned reforms will greatly affect online advertising and force marketers to experiment with new methods of delivering ads without compromising user privacy.

But this is rather good news. After all, the greater the privacy on the Internet, the greater the trust users have in brands.

DSPs and SSPs are becoming less and less different

Just as close friends acquire each other’s habits or begin to use the same speech patterns frequently over time, DSPs and SSPs are becoming more and more distinct from each other as their development progresses.

This year, for example, 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, reports that it generated 27% of its revenue in the fourth quarter of 2021 by helping advertisers buy higher-quality displays. That 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.

2023 is a time for software platforms to diversify their business model, create their own inventory ecosystem that brings buyers, sellers, and publishers together on one platform, and make that system coherent, efficient, and transparent.

5G as an engine of programmatic advertising

5G is the fifth generation of mobile communications, capable of 20 times the speed of LTE (Long-Term Evolution) and reaching 20 GB/sec.

average 5G download speed in selected countries

Why is that important for programmatic advertising?

It’s very simple. Higher download speeds mean faster bids, which implies more efficient platforms. In addition, this higher Internet speed allows you to create ads in higher dpi, and put more emphasis on video ads in mobile format.

Another important advantage that 5G technology offers us 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.

Digital out-of-home advertising (DOOH)

By 2023, the course of the COVID-19 pandemic will be even more controlled, which means that there will be more people on the streets of the cities. 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 growth and spending. Statista expects spending on digital outdoor advertising in the U.S. to grow to $15.9 billion by 2027.

DOOH advertising allows you to create unique, creative campaigns that attract multiple customers. And given the programmatic targeting tools that continue to evolve and become increasingly sophisticated in this area, it becomes a very powerful tool for increasing reach.

In addition, 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.

Voice Ads

Now a lot of brands are releasing voice assistants that can be accessed through a smartphone or PC, and the speakers are sold separately. Voice assistants can control smart home systems, search for something on the Internet, and turn music or videos on and off. Basically, they can do everything your phone or computer can do when your hands are busy.

Voice assistants 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 its conversion rate is much better than in the same social networks due to the high level of user concentration and lack of banner blindness to this type of information transfer.

Advertising in games

The video game market hasn’t stopped growing since 1997 and is already worth an estimated $196 billion. In addition, 67% of adults and 76% of children under the age of 18 in the U.S. play video games, making it one of the most promising markets in terms of advertising.

Advertising in games allows you to monetize them and generate income even from small indie projects, as well as allowing large companies with multiple projects to generate additional income.

Video game advertising 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. 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 is automatically increased.

So if you are looking at in-game advertising but are hesitant to approach it, 2023 is a good time to learn more about it and start working in that direction.

CTV and OTT marketing

During the pandemic, a great number of households around the world have become more active in using CTV and OTT devices to consume content. In the U.S. in 2022, 92% of households were accessible through programmatic advertising for CTV. This is an amazing figure, which nevertheless is overshadowed by some complexities, like conditional ad display (when an ad is counted as shown even though the device was inactive) and not the most accurate targeting, since a variety of people in a household may use the same device.

But that’s not even the most important thing. The most interesting numbers await us in statistics from Statista, which says that 73% of households prefer to watch free ad-supported content. It means that, unlike traditional linear TV, advertising in the CTV and OTT segment will be relevant in any case, and therefore is an excellent direction for the development of programmatic platforms.

Conclusions

2023 will be a banner year in the development of programmatic advertising. As the world finally wakes up after the pandemic and technologies do not stand still, there will be many exciting discoveries and unexpected conclusions. However, we can already predict many changes, so be prepared for them.

SmartHub is always moving with the flow of technology, so check out our blog for the latest industry news. If you have any questions regarding boosting your performance or reinforcing capacities with current trends, don’t hesitate to contact us and we will help to make your wish come true with our White Label technology!