Programmatic advertising is now a part of every digital ad strategy. It would not be stretching things to say that programmatic has re-defined the way digital advertising works. Programmatic has enabled better conversions and higher market returns for brands. In fact, the total spending on ads sold programmatically worldwide is estimated to hit a staggering USD 155 billion by the end of 2021.
As with any sector, evolution is ongoing in the programmatic advertising sector as well. Newer trends in personalization, cost efficiency, and improved conversion are being witnessed as trends change daily.
While evolution is inevitable, it’s worth understanding the factors that drive this transformation of the programmatic landscape? This is key for building a competitive advantage for brands and ad agencies holding back from making significant inroads into newer programmatic domains due to a lack of knowledge.
Let us explore the four main factors that are credited for driving transformational experiences in the programmatic advertising sector:
Evolving digital economy:
Worldwide, the quest for digitally-enabled experiences is surging to an all-time high. The pandemic accelerated the push to a digital-first model of operation across nearly all sectors. In fact, a McKinsey study reported that digitization that may have been expected to occur in months (or years) was achieved in mere weeks in the wake of the pandemic. People shifted en masse to working from home. Lockdowns and lingering fear of contamination made digital natives of us all.
The scope and scale have both increased dramatically. More people go online now in search of digital experiences for a range of activities like education, entertainment, shopping, banking, and many other activities. For brands, this means that they have a substantial digital footprint to cover for their advertising campaigns. For this, their programmatic advertising ecosystem needs to accelerate content delivery, spot target customer base from a more expansive web real estate, and close conversions faster before the competition reach their eyes.
Diversified Demands of Advertisers
Traditional display ads and textual engagement content are no longer enough to drive meaningful ad impact. Today brands have a deeper understanding of the highly dynamic content preferences that their consumers consume daily. Advertisers need more authentic advertising content in various formats, from textual display to short videos and even interactive AR or VR guided content experiences to fulfill their expectations. The programmatic landscape must undergo significant transformation to accommodate a more diverse set of powerful content and personalization requirements. The demands of advertisers are changing, and there is a need to set new standards for budget utilization and reporting metrics. Reporting and analytics are both in focus.
There is growing complexity in customer experience dynamics that brands and advertisers need to understand. How consumers consume media and their expectations for everything from privacy to relevance are changing all the time. More granular levels of personalization, lesser obstruction to usability, and a considerable effort to ensure privacy are the pillars of a “preferred” digital experience for consumers. The advertising sector has to take note. Driving personalization requires customers to willingly part with data that can help brands to meaningfully create tailored content for reaching out to them across the digital channels of their choice. Businesses need to ensure that their operational systems are equipped to capture precise and accurate data about customer behavior. This can serve as a vital input for programmatic advertising to enable better conversations with the right ad display at the right spot and the right stage in the consumer’s journey.
Technology is the core of programmatic advertising. Modern platforms enable advertisers to manage a large inventory of ads and offer coverage across a wide array of digital channels seamlessly without having to supervise ad performance manually. Automation via such platforms is becoming a hot investment area in the ad industry. Studies estimate that by 2027 there will be a USD 33.7 billion being spent on programmatic advertising platforms. While platforms are inevitable, the evolving nature of technologies that power these platforms will be the key driver of transformation for the programmatic landscape.
Artificial intelligence and machine learning will reshape how such platforms leverage data to offer personalized ads to consumers. SaaS solutions will enable more players to leverage programmatic advertising capabilities once the domain of agencies with deep pockets. Technology evolution will democratize the programmatic advertising industry and help bring new competence, added reliability, and improved efficiency for all stakeholders in the value chain.
As the world returns to normalcy from the pandemic, the strides made on the digital front are likely to linger. There will be shifts in consumers’ behavior, and they will demand more authentic information and engaging content in ads. They will be highly selective for their final conversion due to the range of choices available. Programmatic advertising is poised to evolve to match this dynamic market and enable sustainable innovation in the advertisement industry. Get in touch with us to explore more about the next big thing in programmatic.