Programmatic advertising, we were promised so much for this year. GDPR, AI, and the blockchain revolution were all set to make an impact. But to what extent have these predictions come true and what should you look out for in 2018 and beyond?
This year we have witnessed many miraculous things: Barbra Streisand cloned her dead dog, a man in America consumed his 30,000th Big Mac of the year, and a Dairy Queen drive–through served a bear ice cream.
But what can we say for programmatic advertising?
At the beginning of the year, the coming of GDPR was likened to the Mayan apocalypse. It would either revolutionise the way we, as marketers, operated forever or damn us for eternity.
And for a short while, there was some confusion. In the immediate aftermath of May 25th, European ad tech companies reported a 40% drop in media spend and automated ad requests declined as much as 25%.
The loss of third-party data and the impact it would have on targeted campaigns were world ending to some.
But months on from GDPR and media buying is recovering to its previous position. Contextual targeting, as well as first-party data, has risen to the occasion. It’s safe to say programmatic advertising is in the clear…for the moment. As a trend for 2018, you can throw GDPR to the depths of your closet alongside those juicy velour tracksuits and jelly shoes (what were those 90s kids thinking?).
Instead, expect new strategies for targeted advertising to emerge in the coming months. As well as literature ready to guide you in best practice for 2019.
Video and programmatic
But what of video? We were told at the advent of 2018 that video advertising’s share of ad spend would rise, exciting formats would become more prominent, and programmatic advertising would come to linear TV.
Well in this regard, video is delivering.
In fact, it’s predicted that by the beginning of 2019 video ad spend will rise to $13.43 billion. Video adverts experience the highest click-through-rates of 1.84%. So it’s unsurprising that their share of ad spend continues to rise. What’s more, formats such as outstream and social in-feed ads now account for more than half of video spend.
We predict that video and programmatic’s share of the TV market will continue to rise in 2018 and beyond.
Ad fraud: Blockchain and Ads.txt
When asked what the nirvana of media buying might look like, many marketers hail blockchain as the solution.
Market leaders are talking about the possibilities for blockchain in combatting ad fraud. Transactions which run across computers worldwide mean that records cannot be altered retrospectively. And almost anyone can contribute to that chain. The longer the chain becomes, the more resistant it becomes to tampering, fraud, and cybercrime.
Companies such as Unilever have invested in blockchain for the future of programmatic buying. But it is not without its limitations. The technology is currently unable to keep up with the speed of programmatic buying. There are issues surrounding sustainability, security, as well as regulation too.
Instead, the alternative solution, ads.txt, has seen a remarkable rise in 2018. The IAB’s project has gained traction among publishers and advertisers alike. As of February 2018, 51% of websites worldwide had adopted ads.txt.
However, you should not discount blockchain all together for 2018. Ads.text is just a band-aid and as a trend, probably as fleeting as Pokemon Go. At this juncture, blockchain still presents the best solution to ad fraud in the long-term. Some companies are already beginning to use blockchain, and we expect others to begin testing in the new year.
Cross-channel targeting was something that many spoke of in the lead up to 2018. There have been some ingenious uses for omnichannel with companies like Disney and Starbucks leading the way.
Today, the average digital consumer owns 3.2 devices. Your brand must be present on every one to engage their interest and stay hyper-relevant.
Artificial Intelligence (AI) and programmatic
AI has been the buzzword of every predictive piece of 2018. Why wouldn’t it be? The likes of AI-driven dynamic creative optimisation (DCO) presents exciting opportunities for advertising. They offer ways of taking personalised advertising to the next level.
Bannerflow’s Head of Insights, Antonia Lindmark, is intrigued by the future of AI in ad tech. “We can see that AI is being used increasingly to predict consumer actions, rather than focusing on historic patterns. From a marketing context, exciting initiatives are driving things forward.”
In addition, AI has its uses for big data and media buying too. IBM have launched their own AI technology for programmatic media buying in the UK and US markets. IBM’s Watson can reduce cost per click (CPC) by as much as 71%.
Yet, according to the CMO Council and IBM Watson, some 42% of supply chain and 37% of commerce executives have yet to use AI. With AI, it may be cool and flash but not everyone can pull it off.
It’s true that we’ve seen some exciting developments in AI for 2018, but don’t expect widespread adoption of AI yet. It’s one to watch for 2019 though (and probably for 2020 too…).
The Mobile World Congress launched 5G for mobile earlier in the year. With Huawei launching the first systems capable of 5G CPE. This means devices are able to support download speeds of up to 2.3Gbps.
For programmatic ad buying, this represents an exciting opportunity. By 2025, it’s estimated there will be 1.1 billion 5G connections. Transactions can occur in a few milliseconds rather than hundreds. This infinitely speeds up how fast you can present your ad to viewers.
But for many across Europe and the Americas, the advent of 5G will pass them by. For 5G to make an impact outside major metropolises, infrastructure needs to catch up to provide the majority with 3G in the very least first.
The growth of In-app marketing
Another area that’s on the rise in 2018 is in-app advertising. According to eMarketer, the average US mobile internet user will spend 208 minutes within apps per day in 2018. In contrast to a mere 33 minutes in mobile browsers.
In-app is exciting because it reduces issues with ad fraud; with software developments kits (SDKs) that track in-app audiences. Furthermore, OpenRTB 3.0 which is due to be released soon, will simplify the way in which ad exchanges interact with in-app advertising. Soon marketers will be able to filter ad spend and target audiences with ease in-app… In plain English, this means that media buying in-app will be as easy as pie.
In fact, chatter surrounding in-app advertising is nothing new. Remember FlappyBird? That brief fad earned $50,000 a day for its developers through in-app advertising and sales. But with programmatic, as well as the proven success of reward video for ROI, in-app advertising can be more profitable for both sides.
We’re halfway through 2018 and we’ve seen some great things develop in programmatic advertising: GDPR, blockchain, and 5G to mention a few. They might not be universally adopted by the end of the year, but they’re still exciting to watch ready for 2019.
Digital marketing is an ever-changing arena and to succeed you need to keep up to date with your strategies. That’s why you need a platform that’s prepared to do it all. Contact us to find out more.
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