Faster, more efficient, broader: Factors for long-term programmatic advertising trends
For some time now, a number of general developments have become apparent that will impact the efficiency of various forms of programmatic advertising over the long term. These are, on the one hand, the technological advances in the areas of:
- artificial intelligence (AI)
- machine learning (ML)
- data transmission standards (5G)
And on the other hand, the burgeoning spectrum of available and playable advertising channels, including:
- Digital Out-of-Home (DOOH)
- Programmatic podcast and audio advertising
- Native integration of voice control (dynamic voice activated ads or voice enabled ads)
- Interactive and autonomously operating smart devices
The diversification of various channels’ offerings not only opens up more possibilities for marketing, but also promises an even more authentic and personalized consumer experience that is not perceived as encroaching.
Programmatic advertising trend #1: New horizons
Target group identification, targeting, and campaign analysis and optimization are core elements of programmatic advertising. They are indispensable for reaching the right person with the right message at the right time. In doing so, the ensuing data torrents can only be managed and used effectively through the use of AI and machine learning.
Multivariate campaigns that correlate and combine place and time with other variables – such as weather information, major events currently being held in a region, or present traffic conditions – can thus be implemented in larger numbers, with less effort, and in shorter timeframe. Location-based services (LBS) offer an unimaginable source of opportunities for this that is still far from exhausted.
The better the two components AI and machine learning interact with, and complement, one another, the faster it becomes to mine datasets, recognize patterns, predict results and guide every client individually on his or her customer journey. This further improves the efficacy of the ad placements, helps eliminate unsuited audiences, and allows optimal use of marketing budgets.
The new data transmission standard, 5G, will further expedite the delivery of advertisements, thereby paving the way for more elaborate advertising, such as in video format. And beyond the introduction of the new transmission standard, the future beckons with technologies such as augmented reality- and virtual reality-enabled advertising displays.
Programmatic advertising trend #2: There’s life in the old dog yet!
The much-discussed demise of the cookie in the wake of the E-Privacy Regulation has already been identified as the starting point for the inevitable end of programmatic advertising and return to the CPC model. But the mobile market has long survived without cookies, relying, by contrast, on systemic identifiers. Networking and optimizing alternative technologies to cookie-based tracking is a trend that will produce promising new innovations, and unleash significant creative potential.
Put simply, GDPR prohibits any form of personalization without the user’s consent. Consequently, ever-more targeting technologies will emerge that can get by with greatly reduced amounts of user-specific information. Contextual targeting, for example, is already enjoying a massive innovation boost.
While the reachable target groups will inevitably shrink, particularly due to the ditching of third party cookies, this should be compensated for by the higher quality of the available data obtained directly from the user. Transparency and greater trust are positive side effects when you rely on zero-party data. The relevant trend is thus towards quality rather than quantity.
Programmatic advertising trend #3: Digital Out-of-Home
Out-of-home advertising is becoming increasingly digitalized. Outdoor advertising on digital screens is all the rage and also offers potential for programmatic advertising. If buying and trading in digital outdoor advertising space becomes programmatic, advertisers will be able to broadcast their advertising so as to reach their relevant target groups where they are most likely to be at any given time.
DOOH advertising spaces are a medium suited both to brand and performance marketing. They combine the advantages of classic media – namely publicity and reach – with those of digital advertising in the form of moving images and targeted delivery control based on e.g. time, location and weather conditions, and at the desired showing frequency. Using programmatic advertising in the DOOH segment boosts efficiency, thereby achieving a better ROI than for classic OOH advertising spaces.
OOH audio advertising – such as in the form of background advertising in shops, elevators or waiting rooms – is another potential use case for programmatic advertising, as demonstrated by the first example applications in the USA. It is questionable, however, whether this trend will also be able to establish itself in Germany over the short term.
Programmatic advertising trend #4: On all channels
As the possibility of playing ads via DOOH advertising already shows, the areas of use of programmatic advertising are spreading to new channels and media genres. We are observing a shift towards using a single programmatic system to control all inventories centrally, spanning all media genres. The goal is to achieve holistic omnichannel marketing, providing for a individual customer experience across all touchpoints.
Radio commercials can already be controlled via DSPs. Advertising slots in online and digital radio broadcasts, on music streaming services such as Spotify and Soundcloud, as well as in podcasts, have long been bookable programmatically, and continue to offer growing potential. Television is on the path towards programmatic TV, with the currently available addressable TV (ATV) model that allows targeted broadcasting of TV commercials on smart TVs.
The unchecked multitude of streaming services offers huge opportunities for showing programmatic advertising content. Popcorntimes, for instance, wants to disrupt the streaming portal market and, in contrast to the subscription top dogs Netflix, Amazon Prime and Co., wants to finance itself solely through programmatic ads.
Programmatic advertising trend #5: Voice search
Voice search via voice assistants and voice commerce are playing an increasingly important role, also in Germany. The search behaviour and necessary SEO measures for voice search differ from conventional methods used in search engine optimisation.
Programmatic advertising can play the critical role in providing marketers with the best rankings for searches from smart devices and voice assistants. The voice assistant then responds to the user’s search request by playing the desired information with a more- or less-subtly packaged brand message. These techniques are already in use in the USA.