Programmatic advertising is the main advertising tool in the digital space today — it accounts for over 70% of total digital display ad spending worldwide.
With the booming development of programmatic technologies, display advertising remains very relevant, and CTV and DOOH channels are gaining specific popularity. We studied the trends in programmatic advertising that attract the attention of experts in both the U.S. and Europe.
Businesses need to follow the trends of programmatic advertising all the time in order to take full advantage of it. Programmatic buying has a lot of benefits to offer for businesses in 2023, so it’s important to review all of its hottest trends now.
CTV: TV time is back, but not as everyone expected
The pandemic and the isolation had the effect of bringing TV screens back to everyday life but in a new format — streaming video services replaced popular cable TV. People were actively seeking entertainment while clinging to their SmartTV screens.
In 2021 and 2022, the trend of spending more time in front of the TV screen is not going anywhere. Since Covid restrictions remain part of our daily routine, there is a good chance that this trend will continue in 2023.
This channel gives ample opportunity for programmatic advertising. Moreover, users are ready to see advertising products in streaming services, as stated in Adjust The Mobile Streaming Report 2021, citing a study by VAB. In addition, the report talks about the growth of the AVOD (free video with ads) model — by 2025 ad spending could reach $53.5 million.
Leading streaming platforms, including Netflix and Disney+, are also launching viewership models that are supported solely by advertising.
According to MIQ, CTV is one of the top three platforms in the advertisers’ media plan in major emerging advertising markets. This channel is relevant to one-third of marketers worldwide on average, and there is no doubt that its importance will only continue to grow.
Programmatic advertising in games
The gaming industry is growing rapidly. According to Statista, there will be 3.78 billion players worldwide by 2023. Also, in the first quarter of 2022, there were more than 700,000 game apps on Google Play.
The Interactive Advertising Bureau (IAB) has published a comprehensive reference on native advertising in video games. The primary goal of the guide is to set down and disseminate standards for measuring the effectiveness of Intrinsic In-Game Advertising (supported by the purchase and sell sides for in-game advertising)
This past spring, Microsoft made public the debut of its advertising platform, which would enable the placement of advertisements on Xbox Free-to-Play. According to the article, the corporation intends to establish a private advertising platform to which only a small number of brand names will have access. There is a growing tendency among businesses to adopt private advertising platforms, as evidenced by the fact that Sony’s PlayStation and Amazon’s Twitch have already stated their intentions to develop products in this category.
Major media agencies aren’t lagging behind either and are implementing integrations through agreements with leading gaming companies. WPP, for example, has partnered with Epic Games to provide brands with interactive advertising in the Metaverse.
Innovative games, like Fortnite, are creating an entire industry of creative agencies developing new formats for advertising in the meta-universe.
Programmatic advertising plays a big role in these innovations. For example, one of the most popular types of advertising among developers is rewarded video ads. Players who watched a rewarded ad are 6 times more likely to make in-app purchases. The reason for this is that a rewarded video ad gives the player access to premium in-app resources in exchange for ad-watching. Reward video is also one of the most popular formats of in-game advertising:
Another important trend in programmatic is playable advertising. It allows the player to get an idea of how the gameplay works and what kind of game experience they will get before downloading the app promoted within a playable ad. Technically, airing campaigns with such ads is quite easy if you use a good and proven programmatic platform.
Omnichannel: old word, new trend
Omnichannel is called the trend of 2023, although it’s been evolving for a long time — it involves constant interaction with customers through different channels. Consistency is the key, as you need unified ad messaging. Since programmatic technology is available in different formats — both desktop and mobile, DOOH and CTV — the omnichannel approach becomes important for the company. And programmatic platforms allow you to run and manage omnichannel campaigns without much effort while using a single dashboard interface.
New gadget models are being released continuously. For example, even 5 years ago, few people would have thought of advertising smart watches or fitness bracelets, but today it is already kind of the norm.
In the days of smart gadgets — tablets, smart speakers, and voice assistants — browser ads with cookies are becoming rather obsolete.
It’s important to remember that omnichannel is different from multichannel. Whereas multichannel advertising aims to distribute ads to several different channels, omnichannel is focused on the user and their experience. This strategy takes into account that the user can view ads from different devices, however, their experience should be unified. This way an omnichannel approach is a next step after multichannel advertising.
IAB Tech Lab announced the finalization of the OpenRTB 2.6 project and noted that the new standard is ready to be implemented. Particular attention in the development of the new version was paid to CTV, in order to take into account and eliminate the shortcomings of the previous version, which was not accurate enough. The new protocol also addresses the lags of the old version that hindered effective media trading of the fast-growing streaming inventory.
The IAB also released a new specification, Ads.txt.1.1, which adds new values necessary for buyers to easily identify the owner and inventory manager. The update is also aimed at reducing fraud by publishers. Previously, publishers often incorrectly listed their relationships with exchanges and resellers in the Ads.txt file. The new variables added in the updated tech standard eliminate the possibility of such speculation.
Among other things, IAB Tech Lab announced the launch of Transparency Center, a public database for companies involved in the digital advertising supply chain. This database is created to share essential data that is necessary for effective media trading. The repository contains structured metadata about publishers, technical intermediaries, and buyers in an explorable and downloadable format.
Significantly, the self-certification program allows companies to publicly state which specification and version of the IAB Tech lab they use in their production environment. Transparency Center has the potential to significantly reduce or even completely eliminate supply chain fraud, greatly increasing the safety of programmatic advertising and expanding its measurable effectiveness.
DOOH: outdoor advertising with digital capabilities
Several years of pandemics negatively affected outdoor advertising because there was simply no one to look at it. However, as time passes, restrictions become less stringent, and outdoor advertising evolves. Now one of the most innovative trends in outdoor advertising is Digital Out-Of-Home advertising. This is programmatic outdoor advertising.
In simple words, DOOH includes all the digital screens and panels that you can see outside your home: large screens in the city, screens in public transport, screens in elevators, and screens in shopping malls. Such inventory should also be able to integrate and process data in order to change the ad messages according to different variabilities — weather conditions, products left in stock, and more.
In 2023, 76% of marketers plan to increase spending on outdoor advertising. Based on recent projections in the U.S., DOOH ad spending will rise to $367 million, which is a 15% increase over DOOH ad spending in 2021.
Today programmatic platforms make the process of placing and targeting ads outdoors much easier and more accurate. Google, for example, has made digital out-of-home (DOOH) advertising available to all users of its Display & Video 360 (DV360) advertising marketplace. Many major DSPs are already partnering with this platform.
So far, DOOH is in a phase of active development and faces many obstacles, which are mainly related to creating a robust data infrastructure for DOOH advertising. However, the technology evolves rapidly and the first DOOH programmatic platforms gradually come to the scene.
In any case, this area of programmatic advertising remains surprisingly promising. The DOOH advertising market is expected to reach the $55-60 billion mark by 2026.
Audio advertising is profitable again
The extraordinary growth in the popularity of podcasts has marked recent years. And that means that advertising in them has become very lucrative. In the third quarter of 2022, the price per thousand ad impressions on podcasts increased to $26, up from no more than $22 in the same period in 2021.
This is because podcasts are becoming more and more popular. Because of this rise in popularity, you can reach 50% of weekly U.S. listeners if you target ads to Sirius XM Media, Spotify, iHeartRadio, and NPR, which are the four biggest podcast providers right now.
In 2023, we should expect a wave of partnerships between digital audio companies and programmatic media platforms. This is a good opportunity for growth.
For marketers, it’s also a great opportunity to increase reach with minimal investments, since it’s much easier, faster, and cheaper to record audio ads than video commercials.
Cookies are becoming a thing of the past: is that bad?
For several years, marketers expected Google to drop cookie support, but in mid-2022 the company announced that it would delay the innovation until 2023.
The reason is that companies need to prepare and find viable alternatives. The main solution for brands can be first-party data, which means data obtained directly from the user. Existing customer databases are also suitable, but third-party data lifespan is very limited and the volume of third-party data will be shrinking along with tightening privacy regulations.
Advertisers can use first-party data in the following ways:
- Expanding the user data set;
- Audience segmentation and contextual targeting.
However, don’t take the imminent disappearance of cookies as something negative, because abandoning them would mean increasing online privacy for users. In addition, new solutions are constantly emerging to make data-gathering mechanisms more privacy-friendly.
And for mobile applications, the presence or absence of cookies does not matter at all. User actions are tracked via Device ID. In addition, an alternative in the form of SKAdNetwork has been added after the IDFA restriction on IOS.
Innovation in the programmatic industry may seem to be moving too fast, but it is not. Innovation is always going with the flow of time and if you are behind the innovations in some area, it means that you are behind the times.
We hope this article has given you an idea of where the world of programmatic advertising is going right now. We will continue to keep abreast of developments and share our observations and tips with you.