Programmatic advertising transformed digital advertising through the use of algorithms and software to buy and sell ads in real-time rather than through manual ad placements and negotiation. The approach has unlocked unprecedented efficiency and precision for brands engaging with audiences, allowing them to leverage data analytics to dynamically optimise ad campaigns and improve performance and ROI. However, programmatic advertising continues to evolve as technology improves and market requirements change. Here we look at some of the key programmatic advertising trends that every publisher and advertiser should be aware of.
The programmatic advertising landscape
Starting in 2024, the programmatic advertising industry will undergo significant change. Responding to emerging data privacy laws globally as well as consumers’ growing preference for privacy-preserving approaches to marketing, Google has started to deprecate third-party tracking cookies from Chrome.
Although the jury is still out on whether it will achieve its ambition of 100% deprecation by the end of the year, it’s clear that cookies’ days are numbered, having already been deprecated in Safari and Firefox. This is of huge significance for the programmatic industry as cookies have played a crucial role by tracking users’ online behaviours, preferences, and interests, enabling advertisers to deliver highly targeted and personalised ads to potential customers.
In the medium term, technological evolution and sustainability considerations will also drive change.
When it comes to AI, this is arguably the most important change driver. AI can enhance programmatic advertising by automating and optimising ad buying processes, using machine learning algorithms to analyse vast amounts of data, to better target advertising messages that then deliver higher engagement and greater conversion rates. According to Statista, 88% of marketers working with AI report that it helps them personalize the customer journey across channels.
However, when it comes to sustainability, the programmatic advertising industry is currently not doing so well and needs to evolve at a greater pace. It’s calculated that programmatic advertising generates 215,000 metric tons of carbon emissions every month across five major global economies – equivalent to more than 24 million gallons of gasoline being consumed.
Programmatic advertising market growth
The impact of these change drivers on the programmatic industry are outlined below. What’s clear is that although the industry faces significant challenges in the years ahead, the outlook is promising. According to one study, the programmatic advertising market is predicted to reach $28.12 billion in 2028 at a compound annual growth rate (CAGR) of 22.6%.
Analysis by Allied Market Research suggests that the growth of programmatic will largely be attributable to a surge in the adoption of smartphones, improved communication networks, and increasing advertising spending on digital media across industries.
Three programmatic advertising trends
While the programmatic advertising landscape is set to prosper in the years ahead, it will have to change. Here are three key programmatic advertising trends to look out for:
- The rise of interoperable privacy-first technologies. With Google currently struggling to get its Privacy Sandbox off the ground (its privacy-preserving alternative to tracking cookies), innovative adtech companies are producing viable privacy-first programmatic alternatives that promise to maintain personalised advertising at scale across the open web. Rather than relying on a single technology, as in the era of tracking cookies, expect publishers and brands to rely on a range of identifiers and other technologies to gather consented data to profile users and create audiences. In this new age, interoperability will be key as the programmatic ecosystem becomes more fragmented and offers publishers and brands greater choice.
- New players will enter programmatic. As part of the evolution of adtech, expect new players to enter the programmatic advertising landscape. Telcos are a likely candidate. Their network intelligence promises to serve as the ideal basis for audience verification services, which in turn will enable publishers and brands to enrich and activate their first party data and engage with the right audiences with the right message at the right time.
- Waste will no longer be tolerated. With the industry needing to become more sustainable, campaign optimisation will become important beyond simply ensuring a good ROI or campaign performance. Poorly optimised campaigns that share advertisements with incorrect audiences and resources lost to programmatic ad fraud need to be addressed with urgency. By using approaches that verify audience data at source, advertisers and publishers can verify that their campaigns are going to exactly the right audience every time.
The programmatic advertising ecosystem has driven the digitalisation of marketing and helped to transform the industry, but in the past these benefits have come at the cost of web users’ privacy. The future of programmatic will deliver all the benefits of personalisation and real-time engagement, while prioritising user privacy. These advances will not only provide greater benefits to consumers, advertisers, and publishers, but with increased efficiency and lower wastage, will make digital advertising more sustainable as well.
