The Future of Programmatic
Programmatic advertising and the first demand-side platform (DSP) took the marketing industry by storm about 10 years ago. Since that time, the programmatic industry has grown at least 100 fold. It's now a major and well-established component of the digital advertising landscape. This exponential growth has beenfuelled by the constant evolution
and iteration of programmatic advertising that's paved the way for new data partners, products and DSPs to consistently enter the market. In an industry that's constantly innovating, it's hard to know what's ahead.
The following key trends are poised to shape the future of programmatic advertising.
Though the concept of blockchain might be primarily tied to cryptocurrency in many people's minds at present, that perception is due to change rapidly. As the system gains acceptance with brands outside the cryptocurrency space, its advantages for industries like programmatic advertising become clear.
Blockchain came into being about the same time that programmatic advertising did -- about a decade ago. Basically, a series of records, or blocks, that are connected by encryption, blockchain is stored on computers across the globe via a distributed database.
A primary advantage of block chain -- beyond its obvious ability to organize huge amounts of data from all over the world -- is the security that it offers those companies that use its technology. The marketing industry is taking notice with a partnership between Keith Weed from Unilever and IBM's business strategy sector, IBM iX paving the way to more widespread adoption by other programmatic advertising companies. The purpose of this union is to add a greater element of transparency and trust to its functions. This is an especially crucial point as the industry continues to move toward an increased reliance on automation.
2. Digital Creative Optimization
While digital creative optimization isn't a new concept, it's one that is poised to come well into its own during the remainder of 2018 and beyond. The dynamic elements of display ads -- for example, the colours, ad copy, click-through actions and graphical elements -- can already be assembled so they are tailored to a particular audience.
With digital creative optimization, though, the process is taken several steps further to provide an experience that's even more customized. Advertisers can purchase programmatic advertising based on attributes such as browsing behaviour, gender, weather/climate, location, time, first- and third-party data and other signals. This approach brings a focused refinement to programmatic advertising that increases its effectiveness for the client.
3. Artificial Intelligence
Artificial intelligence has become the buzzword for 2018 but what does it really mean and how can it be integrated into programmatic advertising? First, it's important to understand what's meant by artificial intelligence before its role in furthering programmatic advertising can be fully appreciated.
An overarching term, artificial intelligence describes the ability of machines to not only complete certain, complex tasks but also their capacity to perform said tasks more efficiently and effectively over time. This ability is programmed outside the realm of a restrictive rules-based interface.
Artificial intelligence has the capability of collecting the pertinent data -- both structured and unstructured -- from the right sources before extracting insights. These actions take place with astonishing speed so that marketers always have the latest real-time data to use when making decisions. Even more exciting is the fact that the ability of artificial intelligence gets smarter and more effective the more it is used as it learns from the marketer's decisions, systems and processes as well as from the data it extracts.
Programmatic advertising can use artificial intelligence to focus on predictive consumer behaviour instead of relying solely on past actions. Marketers can create look-alike models using data gathered with artificial intelligence to improve targeting of particular subsets of customers or to estimate the chances of a consumer responding favourably to an ad and tailor their bid to match that probability.
It's estimated that in 2017 global television advertising spending reached nearly $182 billion with $591M spent in New Zealand alone according to ASA full year 2017 figures. Programmatic advertising is set to bring explosive change to television advertising in 2018 and beyond.
How exactly will programmatic advertising be used on television? Savvy marketing professionals will use this data-rich and automated approach to purchase and efficiently deliver ads via video content on television. Some ad elements include those that are served across connected televisions, mobile devices and the internet.
Linear television ads will be served by using boxes placed atop the sets. By using data and automation to more effectively target particular segments of
consumers, the fusing of programmatic advertising and television will help clients experience a higher return on investment (ROI). In effect, advertisers can harness the reach of television with the focus of programmatic to deliver more targeted ads.
5. Out of Home
ASA figures for 2017 show that $140M was spent on Outdoor advertising. This was up from $118M the year prior. Based on this growth and global predictions that suggest a 12% growth year on year for 2018 the Outdoor Advertising market continues to strengthen.
Programmatic advertising on out of home media, such as billboards, enables brands to target particular clusters of consumers. When paired with elements such as mobile and social media, out of home programmatic advertising can target those consumers who have opted to have their locations tracked and refine their ads to meet their habits.
Clients can use programmatic advertising data to display their ad only if certain parameters are met. For example, to capture an audience who usually heads to a competing coffee shop on their way to work in the morning, a brand might use programmatic advertising on billboards along the route to entice them to visit their stores instead.
Programmatic advertising will continue to stretch the boundaries of the marketing industry. Look for its influence in the five trends outlined above and get ready to experience its life-changing effects!