The programmatic advertising market is evolving in response to recent technological developments and changing user behavior patterns. While the changes aren’t overwhelming, programmatic industry stakeholders should familiarize themselves with the new trends defining 2022 to get the most out of their programmatic ad spend. Roman Vrublivskyi, director of SmartHub White Label Ad Exchangetalks about what he sees as the 5 trends defining the programmatic sector in 2022.
Reinventing customer targeting and data collection practices
Over the years, advertisers and ad technology companies have relied heavily on third-party cookies to programmatically target and display advertisements to users. Unfortunately, the use of third-party cookies will soon be history.
The question is: why are third-party cookies being phased out if they were effective to begin with?
To deliver relevant ads to the right audience, the advertiser or programmatic ad partner needs to have specific user information. With third-party cookies, advertisers have obtained this information freely and often without consent. Usually, the cookie, also known as a tracker, is stored on a user’s computer to collect information and track their digital footprint for ad targeting.
The lack of a transparent consent mechanism has raised serious privacy concerns. Most popular browsers (including Safari and Firefox) no longer support cookies in response to the issue of privacy breaches and unethical data collection. Google has also announced that the use of third-party cookies will be phased out in 2023.
Although most marketers (about 80%) rely on third-party cookies for ad targeting, change is inevitable, and programmatic ad ecosystem stakeholders are already exploring other ethical targeting solutions.
New trends that replace the use of third-party cookies
Contextual targeting: With this method, ads are served based on a site’s content rather than audience information. Essentially, rather than targeting individuals directly, advertisers will target web platforms with similar content to their advertisements.
According to a report, 51% of marketers admit to spending more of their advertising budget on contextual targeting and 43% are pretty enthusiastic about it.
Contextual targeting will eliminate the need to harvest user information for targeting.
Consensual data collection methods: Companies may collect information from consumers through voluntary exchange, such as opt-in forms and surveys. Publishers may also incentivize users to provide information for ad targeting in exchange for bonuses.
Partnership with ad technology companies: Solutions that will effectively replace the use of third-party cookies are currently under development. Some of these solutions include;
Unified Identity 2.0
Apple Skad Network
Depending on their advertising goals, advertisers may use one or more of these options for attribution or targeting.
Embrace programmatic DOOH
Digital outdoor advertising has been a major outdoor advertising strategy in recent years. Advertisers use electronic billboards and other outdoor digital signage channels to deliver advertisements. While it was quite successful – because people are drawn to electronic screens – there was a gap that caused DOOH (mostly pandemics) to fail. However, after the pandemic is over, DOOH may become particularly popular.
With programmatic DOOH, media buyers can target viewers and outdoor audiences in relevant ad settings based on important factors, such as time of day, weather, societal events, and more. This implies that relevant advertisements will be projected programmatically to adapt to each moment, hour and occasion for more precise targeting. Programmatic DOOH uses data analytics, AI, and deep learning to curate, compile, and deliver ads to a targeted audience. This allows advertisers to better manage their campaigns and employ a data-centric approach to targeting. According to research, interactive ad media attracts more of an audience and drives 100% more conversions than the static media type for DOOH ads.
Programmatic ads on connected TV
CTV programmatic ads have become popular in recent years, and the pandemic has been a crucial factor in this increase. CTV advertisements involve the presentation of digital advertising content on web-connected devices, such as smart TVs, game consoles, monitors and other internet-connected devices.
COVID has had a significant impact on users’ content consumption habits as we now spend more time on screens. People have been forced to stay indoors due to movement limitations, leading to increased time spent watching TV and streaming videos. Nearly a third of our waking hours were spent watching television or streaming videos on the Internet. Also, people spent twice as much time in front of the television during the pandemic than before.
Following these habits, more brands and advertisers adopted CTV programmatic ads, as more people now had access to CTV. According to a survey, over 80% of the UK population has access to a smart TV. Additionally, 77% of customers are comfortable watching ads in exchange for free content.
Although lockdown restrictions are softer now, those habits have persisted, and CTV programmatic ad spend has grown from $4.5 billion in 2020 to $6.9 billion in 2021. CTV ad spend is estimated to will record a new high of $8 billion in 2022.
The Rise of Digital Audio Ads
Digital audio content attracts a large audience; hence the growth of programmatic audio ads. In recent times, podcasts and audiobooks have become a major media preference for many young people. According to recent reports, over 60% of the US population listens to audio content online every week – the average weekly listening time in 2021 was 16 hours and 14 minutes. Other reports suggest that online audio accounted for 11.7% of total media time in the United States in 2021.
Programmatic audio ads involve the embedding of relevant advertisements in digital audio content, such as podcasts, music streaming, audio articles, etc. Brands and marketers can use the automated, data-centric approach of programmatic systems to improve conversion while targeting an audio audience. According to research reported by Nielsen, audio ads had a 24% higher recall rate than display ads and were twice as likely to increase purchase decisions.
The audience for digital audio continues to grow and advertisers have begun to take advantage of this niche to target users programmatically. Audio ads are effective for conversion, as the Midroll Report found that 60% of podcast listeners made a purchase after hearing an audio ad on the podcast.
In-app video ads
There are over 3.4 billion smartphone users in 2022, and other research indicates that around 3.25 billion people play mobile games on their smartphones. This is a huge audience that online marketers can take advantage of. Brands and advertisers often serve in-app advertisements, especially in video formats, to mobile gamers and other mobile app users.
Mobile video ads tend to have high view rates because people watch videos often, and many users (54%, according to HubSpot) prefer to see more video content from brands.
In-app video ads can come in different variations; including playable and award-winning videos. Reward videos are mostly used in mobile games because they allow users to earn a reward or incentive for watching an advertisement. Mobile video ads are engaging; therefore, they are great for targeting and converting users.
For advertisers, it is essential to know the evolution trends of programmatic advertising and to integrate them into their 2022 campaign approach. Third-party cookies will soon be obsolete; instead of waiting until then, start transitioning to new targeting choices and new data collection techniques. Above all, be adaptable and ready to experiment with less popular ad formats, such as audio, video, and digital outdoor advertising. If you’re unsure how any of the trends work, it’s best to contact an ad tech company or ad agency for advice.