contextual advertising

Programmatic Advertising

Programmatic Advertising Trends Shaping the Digital Industry

Like always, new technological developments continue revolutionizing the way we conduct business online. However, at the same time, growing concerns around privacy and the subsequent moves by tech giants to address said concerns are also influencing how online businesses reach out to their consumers. While trends like the declining use of third-party cookies and the rise of stringent privacy laws may make it seem like it is the end of the road for programmatic advertising, the reality is quite the contrary. Sure, these things have a direct impact on the way programmatic advertising is used, but their influence will simply mean that advertisers will have to get more creative with their approaches. In fact, since these changes have been in the works for some time now, advertisers are beginning to adapt. It is clear that despite the changes in privacy laws and the decline of cookies, programmatic advertising is here to stay. However, for marketers who want to keep reaping the benefits of this amazing advertising technology, it has become imperative to keep up with the current trends. That’s exactly what this article is about. We will cover some of the most significant trends surrounding programmatic advertising. Let’s jump right in: Top 7 Programmatic Advertising Trends 1. In-House Programmatic Run Many ad agencies and brands are expected to stop outsourcing their programmatic ad management and pull those operations in-house. The trend has been prevalent for the last few years, with more companies focused on squeezing out the maximum possible ROI from ad investments (more on this later). With lower spending on the management aspect of advertising, this move, when executed correctly, can provide a significant boost to ROAS (Return On Ad Spend). For those working in an in-house marketing team, this will mean developing new skills just to stay relevant in the industry. That said, those who can adapt proficiently will find themselves in an advantageous position, having learned a high-value skill for the future. 2. Rise in First-Party Data Solutions The European Union introduced the General Data Protection Regulation or GDPR in 2016. The legislation is aimed at protecting the online privacy of individuals. In 2018, the USA introduced its version of GDPR, known as the California Privacy Act. Since then, many countries have introduced laws that prohibit or heavily restrict the collection and use of third-party data. These legal frameworks all prevent the tracking of online user data without getting clear consent from the user. Major tech companies like Apple, Firefox, and Google have stopped supporting third-party cookies in their devices and browsers, and the trend is expected to continue. For programmatic advertising, these developments all point in the same direction- the use of first-party data solutions. There have been some attempts to facilitate the same, like Google’s now defunct Federated Learning Of Cohorts (FLoC) and Interactive Advertising Bureau’s DigiTrust service, but they have not seen a lot of success. Currently, the Trade Desk’s Unified ID 2.0 or UID 2 framework is the most successful attempt to facilitate the collection and sharing of personal information with user consent. However, it is safe to assume that more and better solutions will start populating the marketing landscape soon. This is because first-party data is a superb alternative to third-party data. It does not invade anybody’s privacy and gives advertisers access to users who have given their consent. Sure, the volume of data available will diminish, but marketers can expect great improvements in quality. 3. Growth of CTV Digital TV Research estimated that OTT (over-the-top) streaming revenue in the US was nearly $157 billion in 2022, and this number is expected to increase by another $17 billion by the end of this year. Some estimates predict that online video streaming revenue will hit $750 billion by 2031. Don’t let the recent relative decline in the user base of giants fool you into believing that the popularity of streaming services is dying. A close observation of the current trends in the industry shows that the reason behind this reduction is that the market is being populated by new players every year. With each passing day, users have more streaming options to choose from. For programmatic advertisers, this means that the popularity of connected TV (CTV) programmatic advertising is only going to grow. It is estimated that this year advertisers will spend $26.92 billion on CTV programmatic ads, an increase of over 14% from last year. With that said, there is still a lot of room for growth in CTV advertising, and advertisers that jump in now are expected to be poised to enjoy an early mover advantage. 4. Rise in DOOH Ads This year, digital-out-of-home (DOOH) advertising revenue in the US is expected to be around $2.94 billion. To put this number into perspective, it accounts for nearly a third of the total out-of-home (OOH) revenue in the US for 2023. With the absence of COVID restrictions and the rising number of digital screens across locations with high foot traffic, DOOH spending is only going to increase in the coming years. While programmatic technology does not have a large share of the market currently, current trends indicate that this will change in the future. The many advantages associated with DOOH, such as no invasion of user privacy, the unobtrusive nature of ads, and no resistance from ad blockers, make DOOH an excellent opportunity for advertisers to reach their audience. Not to forget, with video and audio capabilities, DOOH placements offer a lot of creative freedom to advertisers that can create memorable DOOH experiences with virtually no extra resources. The best part is, that the same ads that are created for DOOH placements can work well on other platforms, such as YouTube. When used correctly, DOOH ads, in combination with other digital ads, can deliver significant improvements in top-of-the-funnel metrics such as brand awareness, recognition, and recall value. 5. Focus on ROI will increase As mentioned earlier, because of the declining use of third-party cookies, the way programmatic advertising is implemented is set to

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Adapt or Fail: Contextual Advertising in a Post-Cookie Landscape

All over the world, the rising concern about data security and user privacy has led to a major transformation in the way online marketing is conducted. Regulations like GDPR rendered cookies less effective, and now the third-party cookies which are the backbone of behavioral tracking for marketers, are being removed by browsers. By 2024, marketing campaigns will no longer be run by tracking using the third-party cookies that helped to identify the customers online and show them ads wherever they go. The ad placement in the cookie-less world will be defined by contextual advertising. What Is Contextual Advertising? Contextual advertising is a practice wherein marketers place ads that are relevant to the content of the web pages where they will be shown. For instance, a car ad would be shown on a website related to automobiles, and you might see a toothpaste ad on an oral healthcare portal. There might also be an advertisement for pens in a news article about school exams. Contextual Advertising targeting programmatic is not based on cookies, but on keywords or the topic of the website. This is not only going to make targeting more efficient for the marketers, but it will also improve the experience for the consumers as they will not be bombarded with irrelevant and repeat advertising across platforms during their online activities. Contextual Advertising Is the Future Contextual advertising is changing the way digital advertising works. In the future, no web browser will use third-party cookies (Apple and Mozilla have already done away with them), and that’s when context will become the king. The marketers will need smart AI/ML-driven contextual targeting programmatic solutions to identify the context of a web page and display the right ad to the right users. It would ensure that if you are selling a beauty product your ad is not shown beside a sports website Contextual advertising is compatible with various privacy laws such as the GDPR or potential data privacy bills that might soon be introduced in a country like India. Further, the ability to use advanced AI/ML solutions to understand the context of a webpage accurately will ensure the delivery of messaging that appeals to the visitors of that webpage. It might be in its early stages, but it is estimated that contextually relevant advertising will be a segment worth over $375 billion within the next five years. Prioritizing Contextual Advertising for the Post-Cookie World Google Chrome is the world’s leading web browser, and it will block third-party cookies starting in 2024. The technology to block the cookies has already become available, and Google has decided to wait until 2024 to allow developers and marketers to get used to cookie-less marketing. As a marketer, now is the time to act and ensure that you keep generating the desired results through contextual ad targeting. This not only helps in protecting the customer’s privacy but also increases the ad relevance and potentially higher ROI for the marketers. Within the next 2-3 years, contextually relevant advertising would become the standard approach for digital marketers, and early movers always have an advantage. Let’s take a look at some of the key benefits of contextual targeting programmatic for businesses: Better Targeting – Since the cookies are not going to be there, marketers can’t chase audiences with ads related to their preferences since that data won’t be accessible. However, they can easily use AI/ML tools to identify the most relevant web pages for ads and cater to an audience that is already interested in products/services similar to their offerings. Adherence to Privacy – With data anonymization and strict privacy laws mandating that advertisers can’t discreetly use cookies; contextual advertising ensures complete adherence to such privacy measures. Better Audience Engagement – Since the web page context and the ad content is going to be similar, there is a much greater chance of the ads engaging people than the conventional methods. This would boost the click-through rates and conversion rates of the campaigns. Superior Brand Safety – Contextually relevant advertising significantly reduces the chances of ads being published on irrelevant web pages. Thus, marketers can prevent ad fraud, reduce risks to brand value, and also optimize their ad spend. Let’s take a slightly deeper look at how AI and ML-powered solutions can make contextual marketing a safe haven for brands. Contextual Advertising and Brand Safety Customers in 2023 are not only more challenging to convert, but we are also more sensitive toward the content that is displayed through advertising. In the post-pandemic world, there are a number of sensibilities and emotional or sentimental considerations that need to be taken care of. Content that could have gone viral in the 1960s might be considered inappropriate or even offensive by modern audiences. That’s where brands need to constantly ensure that their advertisements are aligned with positive content, and don’t end up offending the target audience as far as possible. Failing to do that can lead to a significant dent in the brand’s reputation and potential financial costs and penalties. In Europe, 70% of marketers believe that ensuring brand safety is their top priority, and things are no longer any different in territories like North America, Asia, etc. For marketers to overcome this risk and ensure brand safety contextual AI holds the key. Contextual AI tools are capable of analyzing the content of a webpage including the images on it. This enables the system to identify whether the content is safe, positive, and aligned with the ad or not. The contextual programmatic solutions would place ads only on websites or apps that have content and values resonating with the ad content. Contextual advertising can also help businesses identify high-value platforms that they might have earlier missed out on in the conventional cookie-driven behavioral tracking approach. Way Forward Contextual advertising is going to be one of the effective ways for advertisers to survive in a cookie-less world. Contextual advertising will help advertisers be seen by the relevant audience. However, in case of unsafe ad placement, the brands have to face serious repercussions. Therefore, to advertise

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