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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