Where Programmatic Advertising is Headed In 2020

Programmatic advertising spending will exceed USD 127 billion in this year and 69% of media will be programmatic according to a survey by Zenith Media. That alone is a pointer to just how important it is to target 4 billion and odd people who are on the internet. As with other technologies, programmatic ad tech too is advancing with the help of artificial intelligence and machine learning. It is also shaped by changing laws such as those relating to privacy and third party cookies. With these figures and increasing competition to grab increasingly wary customers, programmatic is moving ahead and fast.

Programmatic all set to grow fast

Brands focus more on digital display ads through the programmatic route. US, UK, Europe lead in programmatic ad spends with Pacific Asia region not far behind. Not surprisingly, Facebook and Google will gobble up a huge piece of the programmatic revenue. US will witness about 87% growth; the UK about 82%, European countries will account for 80% and China will account for 30%, rising to over 41% by the end of 2020. Talk of China and the talk veers towards walled gardens, a trend that is likely to grow to enable marketers to address captive audiences.

Creative ads will be at the top

Unlike Google’s PPC ads that are solely text based, programmatic welcomes all types of display ads including video. This gives advertisers a chance to create highly impactful creative display ads that will include short videos and animations. It is all about grabbing visitor attention while he is on a page. Static ads will continue but the future is ads that have ingrained motion.

Get direct

Advertisers rely on third party data gathered through cookies and data sets. However, the trend these days is to get direct first party data gathered by activity on websites or even making the visitor submit details if he wishes to view a particular page. Each brand can thus derive specific data and precisely target ads assuring better returns. Personal first party data also lets programmatic advertisers reach out through emails.

One noticeable trend is for advertisers to include user generated content in the ad and thus achieve higher credibility. Dynamic personalization is the key. It shows in the way advertisers are creating ads that also relate to the time of the day and weather. In a way, Europe’s General Data Protection Regulation, accentuates accuracy and quality of user data. For advertisers this means fewer targets but higher chances of positive responses.

Blockchain in programmatic

Image credit: CryptoNote

The beauty of programmatic is that it is all automated, based on sophisticated algorithms that lead to placement of contextual ads in milliseconds. The ugly side is that algorithms can be tweaked and this leads to losses for advertisers. They may end up bidding against themselves or having their ads served on pages which are not relevant. This leads to huge losses. Blockchain is set to set right this imbalance by bringing in transparency to transactions.

Blockchain will connect advertisers and publishers as well as target audiences in a safe transaction chain. It was a common practice, and still is, for some ad platforms to inflate metrics and charge more from advertisers as well as direct fake bot traffic. Publishers may get less than they expect due to manipulative tactics. Blockchain disrupts these practices. It helps define rules for automated campaign. The technology also helps transparent data management for better decision making for advertisers and publishers. Another area where it will be useful is control of how many times the same ad is served to the same viewer on the same site or on other site through tracking. With better blockchain ad tech, advertisers can limit views.

AI & ML

Apart from a deluge of data there are plenty of other things going on in programmatic that would take days to sift through and balance to arrive at a decision. Happily, AI and ML play an increasingly important role in audience management strategy as well as sifting through data.

AI brings in more precision, accuracy and speed to helping programmatic deliver ads based on real time analysis of age, gender, location and preferences. Talk about pursuit and you will see that programmatic is increasingly making use of data from wearables too. Wearables can provide not only location data but also health metrics and inferred lifestyle, allowing advertisers to fine tune targeted ads delivered to the right person at the right place and at the right time.

TV ads making a comeback

TV is not just satellite dish and cable networks. It covers on demand streaming OTT video and streaming services like Netflix. Magna Global estimates advertisers will spend up to $ 5 billion by 2020. TV advertising is making a comeback of sorts but it is the programmatic way with personalized ads that match viewer’s interests. One advantage of TV, whether it is satellite or streaming, is that ads cannot be blocked.

Mobile and digital out of home

Programmatic can be relentless in pursuing targets. Mobile location data and digital out of home ads prove this point and will be a big thing in programmatic in the time to come. This technology is apt for brick and mortar retailers who begin the ad journey in one place and then follow the target using location data and then target specific ads that improve purchase intent as well as brand awareness. Link this with voice activated ads.

Millions of people are using devices like Alexa and voice commands to search for and buy products from the comfort of their homes. A typical scenario: you issue a voice command and get a response informing you of possible nearby locations or direct to home suppliers. An ad can be slipped in, recommending a particular seller.

5G

It's gaining traction and should become widespread by 2022. This opens up even more opportunities for more sophisticated adtech to serve up high resolution video ads and carry out faster real-time analytics. Ads could even become interactive unlike the present system of inviting targets to click through. 5G will facilitate AR and VR. Creative programmatic ad tech will occupy center stage.

There are exciting possibilities for advertisers to spend less and experience higher conversions with programmatic in 2020 and beyond. However, you do need a good understanding of how programmatic works or a good programmatic ad tech agency to do it for you.