Programmatic advertising: these 5 trends will shape 2024
For years now, programmatic advertising revenues have only been going in one direction: up. But how will the end of third-party cookies and other challenges change that? We look ahead to the future!
Programmatic advertising is still growing
There’s no doubt about it: despite a range of challenges, programmatic advertising (PA) will continue to dominate the digital advertising market going forward. That’s if the figures are anything to go by. While global programmatic advertising spend already reached 550 billion U.S. dollars in 2023 according to a Statista study, experts predict that it will increase to 800 billion U.S. dollars in 2028.
Below, we take a closer look at the programmatic advertising trends we can expect in 2024 and beyond.
#1 The end of third-party cookies is prompting new PA strategies
For years, programmatic advertising has mainly relied on third-party cookies to track and target users. Despite postponing the date yet again, Google has decided to finally bid farewell to third-party cookies, forcing advertisers to find alternatives and adopt new approaches that make data protection and privacy a priority. The key will be to develop strategies that leverage first-party cookies, contextual targeting, and privacy-friendly identifiers in order to optimize the effectiveness of programmatic advertising campaigns. For example, by focusing on closed, directly negotiated media sales such as private marketplaces and run-of-site deals, advertisers can reduce any wasted coverage and improve their targeting precision.
#2 Generative AI as an influencing factor
Ever since its breakthrough at the end of 2022, generative AI has been shaking up digital advertising. And it’s clear that the hype is here to stay. In 2024, the use of generative AI will continue to present both new opportunities and challenges for the programmatic advertising scene. Advertisers will need to carefully control the use of programmatic advertising and AI.
AI is by no means a new topic for the sector, as pointed out by Eric Hall, founder of Halls of… and chairman of the Programmatic Advertising focus group at the German Association for the Digital Economy (BVDW): “Artificial intelligence has been used in digital advertising for a long time and has given rise to groundbreaking innovations and transformation processes that are mostly based on processing huge amounts of data. Particularly in programmatic advertising, AI-based algorithms ensure that a bid for an ad placement is made at just the right time, for example. Only by utilizing AI can you achieve the ROI performance that is typical in today’s market when analyzing and optimizing campaigns. A plethora of alternative data and signals will also need to be interoperably linked in a cookieless future. In this respect, AI will safeguard the future of digital advertising.”
#3 Connected TV is playing a key role in programmatic advertising
In 2023, there was a clear shift in investments in programmatic advertising, with Business Wire reporting that connected TV (CTV) accounted for more than 40 percent of spending. This programmatic advertising trend will continue in 2024 and an increase in spending of nearly 18 percent is predicted for programmatic video ads on CTV in the U.S., meaning that 88 percent of overall CTV ad spend would then be programmatic. This development reflects the decrease in traditional TV viewers and the rise of ad-funded streaming platforms such as Amazon Prime Video, Netflix, Disney+, and Max, which are continuing to grow.
In the U.S., the election cycle will also influence the programmatic advertising market in 2024. The market research company eMarketer predicts record ad spend to the tune of 12 billion U.S. dollars in connection with political campaigns.
There is also a growing demand for programmatic addressable TV (ATV) and programmatic connected TV (CTV) in Germany. One-to-one targeting using ATV is particularly gaining momentum, with monthly budgets for programmatic ATV campaigns growing by almost 50 percent in 2023, as reported by d-force – a joint venture between ProSiebenSat.1 Media SE and the media group RTL Deutschland.
#4 Omnichannel campaigns are growing
The increasing relevance of CTV can be attributed to the fact that it is not dependent on cookies. With advertisers having to shift away from third-party cookies, CTV is obviously an extremely attractive channel for programmatic advertising. By using a combination of channels, including social media, streaming, digital out-of-home, and display advertising, advertisers can also create holistic, omnichannel experiences that reach audiences across their preferred platforms. Market research institute Nielsen predicts that the programmatic OOH market will grow significantly in the coming years, with spending set to increase from 291 million euros in 2023 to 522 million euros in 2026. That means the market share of programmatic in the out-of-home segment will grow from 20 to 30 percent.
#5 Efficiency and sustainability in programmatic advertising
Many marketing segments have jumped on the trend toward efficiency and sustainability – so it’s not surprising that programmatic is getting on board, too. In light of growing concerns about digital ad wastage and its environmental impact as a result of bot traffic and ad fraud, advertising teams should focus on quality over quantity in 2024. By favoring high-quality placements and targeted creativity over simply chasing as many impressions as possible, they can get the most out of their advertising budget. Ads that capture the attention of users for longer also reduce CO2 emissions. At a time when programmatic advertising contributes to a company’s digital carbon footprint, aiming for fewer but better impressions can bring enormous advantages and ensure that advertising strategies are harmonized with global sustainability goals.
Women in Programmatic – a network for female empowerment
Not only is the way in which companies advertise changing, but the industry itself is also undergoing a transformation. The digital sector is all about progress and plays a pioneering role in the economy. However, it is still largely dominated by men. The BVDW’s Women in Programmatic network offers women networking opportunities and helps them find their place in programmatic advertising.
“The Women in Programmatic network aims to enable and empower women, in other words give them more courage. To that end, we offer a platform for networking and interacting in a safe space. The network already has 200 members, making it one of the BVDW’s most active groups,” explains Sabrina Büchel, Executive Director at BurdaForward and one of the two patrons of the Women in Programmatic network.
Nicole Mortier, the network’s other patron and SVP of Account Management&Platform Solutions at Virtual Minds GmbH, tells us more about the network’s practical advantages: “Networks like Women in Programmatic are essential for increasing the visibility of women in the industry, fostering interaction, and encouraging women to aim for leadership positions. As a result of women in the industry networking, mentoring programs can be created to help women boost and develop their skills and expertise in the digital advertising industry.”
Programmatic advertising trends of 2024 shaped by creativity and growth
In 2024, programmatic advertising will continue to be one of the key disciplines of digital marketing. With that in mind, the AI hype has merely given the segment even more momentum since 2023. At the same time, there is still plenty of development potential: On the one hand, networks are empowering women in the PA segment. On the other hand, the discipline will have to prove itself in a cookie-free future. The outlook is positive in both respects – just like it is for the discipline itself.
