Despite a global pandemic, the programmatic advertising industry is booming. Statista found that programmatically sold advertising was worth $129.1 billion in 2020 — the highest number yet — and according to eMarketer, 9 out of 10 digital display advertising dollars will involve automation by next year. That’s not all; this upward trend is likely to continue. In 2021, Statista expects programmatic advertising spending to reach $155 billion. However, there are changes on the horizon.
With heightened data privacy, the rise of new programmatic ad formats and a potential increase in ad fraud, the already complex adtech ecosystem is growing increasingly difficult to navigate. Advertisers will have to adapt fast in order to stay ahead of the game.
The Growth of New Programmatic Ad Formats
Audio
The rapidly evolving adtech ecosystem has opened the doors for new and exciting programmatic ad formats, one notable option being audio. In the past, audio ads were primarily reserved for radio; it has a massive reach, it’s easy to target, and it’s highly influential. However, radio isn’t the only place people listen to music anymore.
Whether it’s due to the pandemic, our changing interests, or advancing technology, streaming platforms have exploded. Statista found that streaming revenue has increased from 1.9 billion U.S. dollars in 2014 to 10.1 billion in 2020 — and with apps like Spotify and Pandora taking the world by storm, it’s easy to see how. Of course, music isn’t the only type of audio we’re listening to. Podcast advertising has been gaining traction over the past few years as well.
Audio ads offer unique targeting opportunities that are difficult to come by with other ad types. Advertisers can not only target listeners by demographics or device type, but by genre, playlist, mood or topic. And since there are many niche podcasts, advertisers can get extremely specific; a baby brand could advertise on a parenting show, a creative software company could advertise on a graphic design show, a kitchen appliance manufacturer could advertise on a cooking show, and the list goes on.
Digital Out-Of-Home
Out-of-home (OOH) advertising, like the name implies, is any form of visual advertising we see outside of our homes and personal devices, such as billboards, bus shelters, and murals. OOH isn’t a new method by any means, but with the rise of digital OOH, it’s taking on a whole new dimension.
A huge benefit of digital OOH is that you can rotate multiple ad versions and you’re only paying for a fraction of the medium’s real estate. Plus, ad blockers are powerless against an OOH ad; they’re impossible to skip. And unlike the static OOH ads of the past, digital OOH allows advertisers to display more dynamic content.
Digital OOH also offers some unique targeting opportunities. While we can’t necessarily target OOH solutions in the traditional sense by personal behavior or interest, we can target more broadly by looking at information on location, time, weather, and even current events. This vast array of data the programmatic landscape provides allows advertisers to change which ads they show according to the situation, boosting their effectiveness. \
Connected TV
Connected TV (CTV) refers to TV devices on which advertisers can purchase over-the-top (OTT) inventory. OTT inventory can also be accessed across other devices, including mobile, desktop & tablet. CTV includes streaming services such as Netflix, Hulu, Sling & more. At the Ward Group, we consider all long-form streaming TV (CTV & OTT) to be “Advanced TV”.
Connected TV is an excellent alternative (or addition) to TV advertising; many people have transitioned from cable to almost exclusively streaming their shows. In fact, The National Interest found that over 80% of U.S. households with a TV have at least one Internet-connected TV device. And not only does CTV have a huge potential audience, it’s also highly targetable, as CTV targeting is based on specific audiences, not channels. That being said, it can be difficult to get a spot; inventory is limited and the demand is huge. Plus, only a tiny fraction of the inventory ever reaches open bidding. CTV advertising deals largely happen in the private marketplace, which is invite only.
Changes to Data Privacy
The adtech ecosystem is facing major changes from a data standpoint as well. Third-party data is data sourced from multiple locations (such as websites and apps), purchased by large aggregators, and sold to advertisers. Until recently, advertisers relied heavily on third-party data; it was incredibly useful when it came to targeting. However, that was before Apple announced the upcoming changes to its ID for advertisers (IDFA). Once the changes are implemented, every app will have to ask explicit permission to track and sell its users’ data.
But that’s not all. Google recently announced that their free web browser, Chrome, will be joining Firefox and Safari in phasing out third-party cookies, digital files stored on a computer or device that contain information about the user. According to Oberlo, Chrome is the largest web browser in the world, holding over 65% of the market share. Needless to say, the removal of cookies in Chrome will have major repercussions for the adtech ecosystem.
Creating Authentic, First-Party Interactions
As a growing number of companies, governments and other entities begin prioritizing user privacy, things may seem bleak for programmatic advertisers. Luckily, there are strong alternatives to third-party data, one of the best being first-party data, the information a company, website or app collects themselves. However, people are no longer willing to give up their data for no reason. Invasive popups, tracking cookies and misleading data acquisition methods won’t work in the modern adtech ecosystem.
Instead, advertisers should focus on creating authentic interactions with visitors. By providing worthwhile and informative content, advertisers won’t have to bombard people with spammy tactics, people will want to engage with the brand. It can help to think about the instances when you’ve willingly given a company your information; what made you trust them? How did they ask? What did they use it for?
Preparing For A Potential Increase In Ad Fraud
Along with this new adtech ecosystem comes new opportunities for crime. Ad fraud occurs when malicious actors trick advertisers into paying for something of no value to them, and a popular method is invalid traffic sources. This occurs when fraudsters artificially inflate the number of clicks, listeners or impressions, often through bots, increasing the advertiser’s costs and/or the publisher’s earnings. To identify invalid traffic sources, it can help to look at the numbers; a huge spike in traffic, clicks or impressions without reason could be a red flag, as could an abnormally high bounce rate.
According to The Drum, another form of ad fraud, one we’re likely to see increase with the emergence of audio ads, is impersonation. With podcasts rising in popularity, everyone wants to advertise on a major show, and fraudulent characters have found a way to capitalize on that fact. The problem is that virtually anyone can make a podcast these days, including perpetrators of ad fraud. Recently, fraudsters were caught making their own podcasts with similar names to popular shows, intentionally tricking advertisers into purchasing worthless spots.
All of that being said, audio ads are largely protected from many types of fraud common in other ad formats. For example, fraud in the form of pixel stuffing, where ads are compressed into a single pixel on a publisher’s page, and ad stacking, where multiple ads are placed on top of one another, aren’t possible with audio. It’s a trade-off.
Navigating The Adtech Ecosystem With The Ward Group
The adtech ecosystem can be confusing, and with advancing technology and new privacy laws, it’s only getting more difficult to navigate. With over three decades in the industry, The Ward Group’s media planners and buyers understand the adtech labyrinth, and we’re here to help you do the same. No matter how you’re looking to advertise — digital, video, audio, you name it — we have the resources and experience necessary to make the most of your advertising dollars. Contact us today to get started!