Technology
Services
Resources
Whether it’s making headlines for its commanding role in the political advertising sphere, its record-setting viewership levels, or its popularity among younger generations, it’s no secret that connected TV (CTV) is one of the most talked about—and fastest-growing—advertising channels.
However, rapid channel growth is often accompanied by increased risks, and CTV is no exception. Factors like its fragmented nature and lack of standardization make it vulnerable to fraud, from inflated ad impressions to wasted spending on inactive devices. At the same time, advertisers face the possibility of their ads being placed next to low-quality content or content that conflicts with their brand values, which can erode audience trust. Fortunately, there are solutions to address these risks, which allow teams to harness the full potential of this booming channel in a way that protects against ad fraud and brand safety threats.
The TV landscape has undergone a dramatic transformation in recent years, as connected TV and over-the-top (OTT) have exploded in popularity and traditional linear TV viewership has declined. Over the past five years, time spent with CTV has increased by more than 137%, and time spent with traditional/linear TV has decreased by nearly 17%. Even more, in June 2024, streaming amassed the highest share of TV usage—a whopping 40.3%—surpassing the previous record set by cable in June 2021.
However, the fast-paced influx of CTV ad dollars has attracted attention from fraudsters and other bad actors, making ad fraud a growing threat on the channel. This is of particular concern when it comes to programmatic CTV: In Q3 2023, 15% of programmatic CTV advertising traffic was found to be invalid.
At the same time, more than 80% of CTV ad buyers feel significantly concerned about securing brand suitable ad placements. Because the landscape is so fragmented—with viewers watching across a variety of apps and platforms on their connected devices—it’s more difficult for advertisers to control precisely what content and/or programming their ads run alongside. As a result, teams that overlook a brand safety plan when investing in the channel could very well end up with fraudulent placements and/or ads served next to content that is unsuitable for their brand or client.
Part of the reason ad fraud in the CTV landscape is increasing is because advertisers are spending more programmatic dollars on the channel. While CTV makes up a relatively small fraction of the overall programmatic market, more than 2 in every 5 new programmatic dollars spent are going to the channel. Without proper safeguards, programmatic inventory becomes more vulnerable to fraud, driven by reduced ad verification, increased traffic volume, and a fragmented supply chain.
Bot fraud, which artificially boosts the number of video ad impressions, is one of the most common types of ad fraud in the CTV open marketplace. DoubleVerify and Roku recently identified “CycloneBot,” a highly sophisticated fraud scheme that not only spoofs impressions but also simulates prolonged CTV viewing sessions, making the invalid impressions more difficult to detect. The bot can spoof 1.5 million devices, equating to 250 million invalid ad requests every single day. Fortunately, thanks to Roku’s Advertising Watermark and DoubleVerify’s verification process, the bot was detected. Moving forward, Roku is looking adapt their watermark into an industry standard to better combat such fraud schemes.
Beyond these fraud risks, CTV’s rapid rise in popularity has also led to significant brand safety challenges. Without safeguards in place, advertisers’ CTV ads could end up running alongside low-quality or unsuitable content—or, in more extreme cases, harmful or misleading misinformation or disinformation.
Take, for instance, YouTube’s dominating presence in the connected TV space. In early 2024, Nielsen announced YouTube was the top streaming platform by time spent watching by viewers for an entire year, with viewers across the globe watching more than 1 billion hours of YouTube content on their connected TVs each day. But platforms like YouTube pose a substantial brand safety risk, given that they are filled with user-generated content (UGC). While ads on the channel might run alongside more traditional tv programming that viewers are accessing via streaming on their CTV, they could also very well appear next to UGC that may or may not be a brand suitable environment.
Made-for-advertising (MFA) CTV apps pose an additional brand safety challenge. Much like MFA websites, MFA CTV apps often employ aggressive tactics that create a low-quality experience for viewers. And like ad fraud, this problem is more common in the open marketplace, with an estimated $144 million in programmatic ad spending going to such low-quality CTV apps each year.
Overall, while CTV was once seen as a brand safety haven, its rapid growth and evolution now require advertising teams to carefully consider brand safety when investing in the channel.
Another brand safety concern advertisers must navigate in the CTV space is its meteoric popularity among political advertisers.
Traditional linear TV has long been a go-to for political advertisers, and it’s no surprise that political CTV advertising has exploded as viewers have shifted to streaming. In fact, in 2024, 45% of all digital political ad spending is forecast to go to CTV. For some teams, serving ads alongside political content might be viewed as a boon, as this content often draws a lot of attention. On the other hand, political content and ads can be negative and divisive, making adjacent ad placements unsuitable for some teams. And with the explosion of generative AI, coupled with many tech behemoths making significant cuts to their trust and safety teams, the prevalence of political mis- and disinformation is growing all the more rampant in digital spaces. This adds an additional layer of consideration for advertisers looking to make the most of CTV in 2024.
As advertisers consider their CTV brand safety plans, it’s critical to think through the implications of advertising alongside political content, particularly during high-impact time periods like the weeks leading up to Election Day.
Amidst this complexity, how can advertisers meaningfully prioritize brand safety on connected TV? Though this is still an area that is evolving and developing, there are steps advertisers can take now to maximize the CTV opportunity while protecting against fraud as well as brand safety and suitability concerns.
First, teams can take advantage of high quality, premium inventory offered through programmatic guaranteed and private marketplace deals. “When it comes to these types of deals, the brand safety plan is essentially built into the deal itself,” says Kali Baldino, VP of Media Investment at Basis Technologies. “When you’re working with the provider to build these premium deals, you’re indicating what types of content you want to run on—and what types you want to avoid—from the start.” These options offer a higher level of control and quality assurance compared to open marketplaces, reducing the risk of ad fraud. They also offer enhanced control over where ads are placed, allowing advertisers to ensure their ads are appearing in brand suitable placements.
Additionally, when bidding on the open marketplace, advertisers can use tools like allowlists, blocklists, or CTV-specific contextual targeting segments to focus their ads on desired placements. “We’ve seen a lot of success by focusing on the types of content teams do want their CTV ads to appear alongside and building a brand safety strategy around that,” says Baldino. “However, I’d advise against getting too specific, as that can limit a campaign’s reach.” By using these tools intentionally, teams can achieve a balance between brand safety and campaign reach, maximizing the impact of their campaigns while mitigating potential risks.
In addition, advertisers can ensure fraud prevention, brand safety, and brand suitability on CTV by working with partners to help monitor and validate ad placements to ensure they meet teams’ brand safety standards and reduce the risk of fraud both pre- and post-bid. For instance, partners like Grapeshot and Peer39 can help protect brand safety through contextual targeting solutions that ensure ads are placed in suitable environments; Comscore provides audience measurement and analytics to help verify ads and ensure they are being shown to legitimate viewers on CTV platforms; and DoubleVerify offers solutions to verify ad placements, prevent fraud, and measure viewability, as well as to ensure ads are not placed alongside inappropriate or unsafe content. Just how effective are these types of brand safety and ad fraud verification? One study found that advertisers not using verification experienced an 11.2% fraud rate, compared to a rate of 0.6% for those who did use verification to protect their CTV campaigns.
Finally, when it comes to navigating political content, there are several steps that teams can take to ensure their CTV ads are not running alongside unsuitable political content and/or misinformation or disinformation. First, during times when political content is most prevalent (i.e., the weeks leading up to Election Day or primaries in battleground states), advertisers can up their spend on platforms where political content is not allowed, such as Netflix and Disney+, and may choose to suspend their ad spend on platforms that tend to see more divisive political content, such as X. Additionally, they can use blocklists or allowlists to eliminate placements known to be associated with political content and/or misinformation. Even more, contextual targeting can help teams to place ads only within content categories that are relevant and appropriate, thus minimizing (though, admittedly, not completely eliminating) the chances they appear next to controversial or undesirable political content.
By approaching CTV campaigns intentionally and with a strong brand safety plan in mind, teams can navigate the complexities the channel poses and avoid potential brand safety and fraud risks.
Connected TV advertising offers significant opportunities to advertisers, but it isn’t without its drawbacks. Amidst its soaring popularity in recent years, ad fraud and brand safety concerns have become more pronounced on the channel, making it more critical that advertising teams craft intentional and proactive plans to ensure suitable ad placements that inspire trust and foster connection with target audiences.
By seeking to understand the ad fraud and brand safety challenges in the space, crafting a CTV brand safety plan, and working with partners to avoid fraud and ensure ads meet brand safety standards, advertisers can make the most of the CTV opportunity while protecting themselves from the rising threats of ad fraud and brand safety risks.
__
Want to learn more about connected TV advertising, especially within the context of a more holistic digital video approach? Check out our guide, Video Unleashed: The Ultimate Guide to Digital Video Advertising.
Largely speaking, TV was simpler in the days of yore. Sure, there was the stress associated with missing the start of your favorite sitcom (in the days before DVRs or streaming), or the conflict that arose when two of your go-to shows aired opposite one another. But just a decade ago, watching TV was relatively straightforward.
Fast forward to today, and watching your favorite TV content has become an increasingly complex and decision-riddled endeavor.
First, there’s the question of what device to watch on: Your phone? Tablet? Smart TV? Laptop? All of the above (and, perhaps, all at the same time)? Then, there’s the consideration of where to watch: Hulu? Netflix? Disney+? MAX? Peacock? YouTube TV? Or maybe even good ol’ cable? Finally, there’s the choice of just what you’re going to watch—that is, if you have enough decision-making energy left to tune into anything other than your go-to comfort reruns.
For advertisers, this shift in audience habits and emerging opportunities has invited a host of new challenges: Just where, exactly, is my audience? How do I navigate the increased fragmentation of the TV landscape across linear and streaming? And how can I best meet my audience where and when they are watching to fully capitalize on the convergent TV opportunity?
This complexity has all culminated in convergent TV: a new mindset for TV advertising wherein strategies extend beyond any individual channel and instead account for the proper balance between traditional/linear TV, over-the-top (OTT) streaming, and connected TV (CTV). And though OTT and CTV are increasingly establishing themselves as forces to be reckoned with among viewers, linear TV still maintains a strong foothold.
Here, we’ll dig into everything advertisers need to know about convergent TV in 2024: from the lay of the land today, to emerging trends, to new innovations—and how viewers feel about them.
The last few years have seen significant shifts in the convergent TV landscape, including the 2023 writers’ and actors’ strikes, more streaming platforms releasing their own ad-supported tiers along with new original content, Netflix announcing plans to introduce its own adtech platform, an increase in streaming-exclusive live event broadcasts (including MLB and NFL games), and more.
Alongside these shifts in the TV landscape itself, audience viewership and ad spend trends have evolved as well.
Here’s where things stand in TV land in 2024:
In terms of viewership, traditional TV is on the decline: In June 2024, streaming amassed 40.3% of all TV usage, surpassing the previous record set by cable in 2021. As streaming grows in popularity, more and more viewers are opting to cut the cord (or, in the case of younger viewers, have never used a cord at all).
Over the past five years, time spent per day with traditional TV has decreased by nearly 17%. It’s likely not a coincidence that, during that same time period, OTT streaming services have exploded in popularity, and that time spent with CTV has increased by more than 137%. Though connected TV is especially popular with younger generations—millennials and Gen Z turn to CTV for more than half of their TV screen time—older viewers are doing a good amount of streaming themselves.
So, just what is driving these trends? Pandemic lockdowns famously helped accelerate the shift toward streaming and drove substantial CTV adoption. And in an age when consumers have grown accustomed to content being available on-demand and on-the-go, the increased convenience and flexibility that streaming offers—not to mention the ability to watch across multiple devices—also plays a significant factor. Additionally, beyond the extensive libraries of classic content that's long lived on streaming platforms, the emergence of new original content produced exclusively for streaming services has further increased the appeal of OTT and CTV. Coupled with a significant slowdown in new scripted content on linear TV in 2023 due to Hollywood labor strife and it’s not a huge shock that linear TV fell below 50% viewing share for the first time last year.
As more and more viewers choose a bundle of streaming services over a bundle of cords, advertisers are following in kind, attempting to connect with audiences precisely where they’re consuming their TV content.
Here’s what the convergent TV advertising landscape looks like in 2024:
This growth in OTT and CTV ad spending has, unsurprisingly, coincided with increased viewership on those platforms, but their advertising appeal extends beyond just eyeballs. CTV and OTT also lend themselves to highly targeted advertising, enhanced flexibility and customization based on user demographics and behaviors, and enhanced analytics and measurement capabilities. And, with increased signal loss and privacy-friendly advertising being top considerations for advertisers in 2024, CTV in particular can appeal as a privacy-first haven for digital advertising—after all, CTV has always allowed advertisers to connect with audiences in a targeted and privacy-friendly way.
Then, of course, there’s the other story that’s shaping the convergent TV landscape in 2024: political advertising.
Basis data shows that political programmatic CTV spend grew by 67% from 2020 to 2022, and strong growth is forecast for this year’s election cycle as well. In fact, of the $30 billion in projected total CTV ad spending this year, election year political spending is forecast to account for upwards of $1.8 billion—or more. With a controversial presidential race at the top of the ballot, combined with many other high-profile races and causes, advertisers across all industries will feel the effects of the 2024 election and should be aware of its potential impacts—particularly within the convergent TV landscape.
Linear TV has long been a staple of political advertising. With its familiar, lean-in viewing experience, it allows campaign teams to connect with and educate viewers in an emotion-driven way that fosters memorability. And though streaming is overtaking the convergent TV landscape, linear/traditional TV will still play a significant role in the 2024 election cycle, with 51% of total political ad spending during the 2024 cycle forecast to go toward broadcast television.
That said, political advertisers are increasingly taking a balanced approach to TV advertising by complimenting their linear ad buys with CTV and OTT. Digital video offers political advertisers many of the same benefits as linear TV, plus the ability to target and measure ads more precisely. It can also help them reach voters (particularly younger voters) who might not be tuning into linear TV—an increasingly pressing need given that 65% of likely voters prefer streaming to linear TV and 82% use ad-supported streaming services.
There are a variety of ways for political advertisers to tap into CTV inventory, spanning the open exchange, programmatic guaranteed, private marketplace (PMP) deals, and select partnerships with premium and/or exclusive inventory. By leveraging a well-balanced media mix and utilizing advanced targeted technologies such as automatic content recognition or district-based geopolitical targeting, political teams can turn to CTV to connect with key audiences.
Taken altogether, political advertising is set to spend, spend, spend across the convergent TV advertising ecosystem this year—and that will have a significant downstream impact on non-political advertisers, too. Linear, OTT and CTV inventory is likely to be more limited (and certainly more costly) in the days leading up to state primaries and Election Day itself. This is especially true in “purple” battleground states such as Pennsylvania, Arizona, and Georgia.
To adapt, non-political advertisers should be prepared to either pay significantly inflated rates for broadcast TV, or to shift dollars away from that channel during the weeks leading up to the election as political ads gobble up much of that inventory. When it comes to streaming, advertisers should consider leaning more heavily on other channels in their omnichannel mix or tapping into streaming inventory that does not allow political ads, such as Netflix, Amazon Prime Video, and Disney+. Additionally, advertisers should be especially mindful of brand safety and perception implications during the politically charged campaign season. By proactively understanding and adapting to the changes that political advertising will have on the larger convergent TV landscape, non-political advertisers can manage campaign costs, prioritize brand safety, and effectively reach target audiences in the runup to November 5.
In 2024, convergent TV presents a significant opportunity to all advertisers—particularly as more and more consumers shift towards streaming.
Across both linear and streaming, live sports advertising continues to be a powerhouse opportunity for advertisers looking to reach large and engaged audiences. And whereas live events used to be available only via cable/broadcast (think: the Super Bowl being broadcast live exclusively on CBS back in 2010), these events are increasingly being streamed simultaneously via connected TV and on OTT platforms (for instance, Super Bowl LVIII being broadcast on CBS, Nickelodeon, CBS.com and Paramount+). Some games are even being aired exclusively through these streaming services (see: Peacock’s exclusive NFL playoff game in January 2024 or the many NCAA sporting events that air on ESPN+).
In the year ahead, linear will continue to be a majority of viewers’ go-to home for live sports—and, in turn, a great way for advertisers to engage broad and captivated audiences in real-time. And as viewers increasingly turn to streaming for sports and other live events, advertisers can experiment with targeting these audiences via tailored and contextually relevant ads, ensuring their message resonates during these high-impact moments wherever those viewers happen to be tuning in. With Disney, Fox and Warner Bros. Discovery having announced a new ad-tiered streaming bundle where viewers can access live sports content from ESPN, FOX Sports, TNT, and more, those digital opportunities will only continue to increase in the months ahead.
Advertisers also have an array of new and emerging ad-supported tiers available to them on different OTT streaming platforms. Netflix’s ad-supported tier amassed 23 million monthly users less than two years after its launch, and Disney+ was sitting at just over 5 million ad tier subscribers in late 2023. Add in Amazon’s new ad-supported tier, and this all amounts to a significant amount of high-quality inventory that advertisers can use to connect with highly engaged audiences. And, by tapping into this inventory via private marketplace deals (PMPs) and programmatic guaranteed, advertisers can align their ads with streaming content most likely to resonate with their unique audience.
Viewers today consume content across a variety of devices—and often, on multiple screens at once. To capture and hold audiences’ attention, many advertisers are embracing interactive elements in their linear TV, OTT and CTV ads.
Innovations like shoppable ads and QR codes, in particular, can enhance the TV advertising experience and deliver value to consumers and marketers alike. Shoppable TV allows advertisers to seamlessly integrate e-commerce elements into their content, providing viewers with a direct pathway to make purchases. QR codes can play a similar role, offering a quick and convenient way for viewers to access additional information or promotional offers, and giving advertisers an easy way to meaningfully measure impact and attribution for specific ads.
Using these interactive elements can significantly boost conversion rates, as viewers can instantly act on their interest in a product or service. And, better yet, the features seem to be resonating with audiences, with one study finding that 70% of viewers like TV ads with QR codes and 62% would scan a QR code if they saw one in a relevant ad.
By leaning into new opportunities in the convergent TV landscape to capture and maintain audience attention—and, of course, balancing linear, OTT, and CTV ads with other channels to create a holistic, omnichannel experience for viewers—advertisers can engage with audiences intentionally and elevate their campaigns.
With the waves that artificial intelligence is making across the digital advertising landscape, it’s no surprise that it is also poised to shape the future of convergent TV advertising. GenAI, in particular, has the potential to revolutionize how ads are targeted, personalized, optimized, and integrated into content, particularly within the streaming landscape.
Take, for instance, contextual targeting. Contextual advertising has long been used in the TV advertising space to align ads with the content viewers are watching. Think: ads for kitchen gadgets during cooking shows, vacation ads during travel programming, home security systems during true crime shows, etc. Prior to recent advancements in AI, contextual targeting was less precise and relied on broader categorizations, such as whether a show was a comedy vs. a drama or was geared towards adults vs. teenagers. Now, thanks to GenAI, contextual targeting can tailor ads not only to specific shows but also to individual scenes within a show. For example, during a heartwarming family reunion scene in a popular drama series, an AI-driven platform could identify the emotional tone and insert a commercial for a family-oriented product, such as a minivan or a family vacation resort.
In fact, at the upfronts this year, several major streaming players showcased their new AI features: NBCUniversal shared how they are using GenAI to better identify and categorize the emotions of individual shows and movies in their collection to place ads more impactfully, for example, and Disney touted their new AI product that “ties mood to messaging.”
Another significant effect of generative AI on convergent TV is its ability to enable dynamic content creation for ads. Traditional TV ads are static, offering the same message to every viewer. However, with generative AI, advertisers can create countless sets of variables for personalization. For example, a car commercial can be dynamically adjusted to feature different backgrounds, music, and even dialogue, tailored to match the viewer's preferences and viewing habits. If a viewer is watching a suspenseful thriller, the commercial might take on a darker, more intense tone, whereas the same commercial might be lighter and more playful if the viewer is watching a comedy. This level of personalization ensures that advertisements are more engaging and relevant to individual viewers, thereby increasing their effectiveness.
And, GenAI's ability to synthesize vast amounts of data and create highly personalized content extends beyond just visuals and tone. It can also adapt messaging based on demographic data, viewer behavior, and real-time feedback. This means that an ad campaign can continuously evolve, optimizing itself to better resonate with its audience. For example, if data shows that a particular segment of viewers responds better to humorous content, AI can adjust the ad to incorporate more humor, making it more appealing to that specific audience.
The next several years will continue to see evolution in the convergent TV landscape, as the shift from linear dominance to streaming supremacy continues. Advertisers who navigate this complex terrain with agility, embracing the emerging trends and opportunities, are poised to make the most of this transformative era in TV advertising.
__
Looking for a deeper dive into how TV advertising fits into your video advertising strategy? Explore how savvy advertising teams can leverage digital video channels effectively and cohesively to create customer journeys that engage audiences and inspire action with Video Unleashed: The Ultimate Guide to Digital Video Advertising.
Though marketing to Generation Alpha might seem like a far-off reality (after all, wasn’t it just yesterday we started to talk about connecting with Gen Z?), today’s youngest generation is already beginning to demonstrate a remarkable influence. With Gen Alphas forecast to amass $5.46 trillion in spending power by 2029, the time for brands and marketers to begin understanding these young consumers is, well, now.
Born between 2010 and the present day (the generation will include those born through 2025), the oldest Gen Alphas are just entering their teen years. With an estimated 2.8 million-plus Gen Alphas being born each week across the globe, they are projected to number more than 2 billion in total by 2025. As the first generation born entirely in the 21st century, they have grown up with near-constant access to technology, and their digital habits are already being formed.
Gen Alphas are not passive online users. They actively engage, create, and influence digital content, and prefer personalized, immersive, and interactive online experiences. As such, this generation’s emerging online behaviors and media preferences are already redefining how every sector interacts with them. For advertising teams to effectively connect with these young consumers when and where they’re spending time, they must understand what motivates them, how they’re currently engaging online, and how their behaviors are anticipated to evolve in the coming years.
Following in Gen Z’s footsteps, Gen Alpha is predicted to be the largest and most diverse generation yet. In the United States alone, there are approximately 45.6 million Gen Alphas now and they have already surpassed the general population in diversity. And by 2025, they will outnumber baby boomers.
This young generation is already showing distinct characteristics that are key for brands and marketers to understand. For instance, a striking 92% of Gen Alphas believe it is important to be themselves, reflecting a strong sense of individuality and authenticity. And, interestingly, most Gen Alpha parents report that their kids would rather play outside than in front of a screen, suggesting that traditional forms of play still hold significant appeal despite the rise of digital entertainment.
When it comes to Generation Alpha, the impact of the COVID-19 pandemic cannot be overlooked. Many of this generation’s members were born during the height of the pandemic or started school in its midst, experiencing firsthand the uncertainty and turbulence it brought. Gen Alpha’s early exposure to such a significant global event influenced their general outlook and mental health significantly. Notably, 75% of 8- to 10-year-olds say they are already thinking about mental health, and 37% of Gen Alpha parents are concerned their children will be worse off than they were in this regard.
Though they are showing distinct and unique preferences and behaviors, members of this generation are also significantly influenced by their parents. With more than half of this generation being born of millennial parents, researchers have dubbed them “mini millennials,” since so many of them are developing similar habits and brand preferences as their parents. That said, like each generation that has preceded it, Gen Alpha represents a new segment of consumers whose unique life experiences and values will shape the future of marketing.
Generation Alpha is the second wave of true digital natives, with an even deeper immersion in the digital world than the first digital native generation, Gen Z. In the US alone, there are 36.2 million children aged zero to 11 who are active internet users in 2024, nearly 12 million more than those aged 12 to 17. This early and extensive exposure to the internet sets Gen Alpha apart and will likely shape their online habits, preferred media channels, and other behaviors in the years to come.
Notably, 43% of Gen Alphas have a tablet before the age of 6, and 58% have a smartphone by the age of 10. This early and widespread access to digital devices from such a young age means that Gen Alpha is not simply familiar with technology—they are growing up with it as an integral part of their daily lives. For brands and marketers, understanding this deep digital integration will be key to engaging with this generation effectively as they grow older.
Additionally, 39% of Gen Alpha spends at least three hours a day looking at screens, and 24% spends at least seven hours a day on smartphones, underscoring how substantial a role technology already plays with this generation. And in 2024, 80% of internet users aged 11 and under will use a tablet at least once per month; 59.6% are connected TV viewers at least once per month; and 29.2% are smartphone users at least once per month. Even when they aren’t directly interacting with them, screens are everywhere in Alphas’ lives—in their classrooms, their parents’ hands, their living rooms, and even the stores they frequent. This pervasive digital media presence shapes their experiences, preferences, and behaviors. As they grow older, brands will need to think about how they will be able to connect with Gen Alpha given their deep immersion in the digital world.
It will be several years before Gen Alpha reaches an age where they can be advertised to. However, by seeking to understand their behaviors and preferences today, marketing teams will be well-positioned to connect meaningfully with them when they come of age.
Despite how young they are now, this generation is already forming brand affinities, both because they’ve gained some brand savvy through encountering different products and ads online, and because of their parents’ influence. In fact, just under half of Gen Alpha’s parents report that their kids already have favorite brands, and the cultural phenomenon of Gen Alpha “Sephora Kids”—aka kids dropping substantial money on skincare aimed at adults—has been making headlines. This early brand affinity presents an opportunity for marketers to start building brand awareness now by engaging with Gen Alpha’s parents. At the same time, it’s important for marketers to understand this generation’s emerging behaviors around digital video, gaming, and social media so that they can craft marketing strategies that will meet their unique needs when they reach an age when they can be directly marketed to.
Digital video is already establishing itself as an essential channel for reaching Gen Alphas: In 2024, 81.4% of internet users aged 0-11 watch digital video at least once per month, and half of Gen Alphas are streaming video daily.
In the US, children spent an average of 64 minutes per day on online video apps, representing a significant amount of their daily media consumption. YouTube tops the list as the most popular video app in the US for this audience, with Alphas averaging 84 minutes per day on the platform, followed by Netflix (49 minutes), Disney+ (30 minutes per day), and Hulu (30 minutes per day). The amount of time spent on these video platforms highlights their central role in Gen Alpha’s daily routines.
For advertisers, the fact that Alphas are spending such a significant amount of time on digital video now indicates that it will likely be a primary channel for engaging and connecting with them in the years to come. Unlike Gen Zers, who primarily discover brands through traditional social media, 51% of Gen Alpha say they first hear about brands through YouTube videos. Popular content types such as “storytime,” “review,” and “day in the life” videos captivate these young viewers, making them effective formats for brand messaging. Given the popularity of this digital channel now, it will likely only become more critical for connecting with Gen Alphas as they step closer to adulthood.
Another key channel for marketers to consider for connecting with Gen Alpha is gaming, given that 47.7% of internet users aged 0-11 engage in digital gaming at least once per month. Where relaxation is the number one reason for Gen Z to game, Alphas tend to see games as a way to express themselves or embrace their creativity. This distinction highlights the potential for brands to engage with this young audience by creating interactive and customizable in-game advertising experiences that allow Gen Alpha to explore their identities and showcase their creativity.
Though digital media is a near inextricable part of most Gen Alphas’ daily lives, members of this younger generation are showing early indications that they want a balance of online and in-person experiences. For instance, 78% of young consumers—including Gen Alpha—say they prefer shopping in-store. Gen Alpha’s preference for brick-and-mortar both paves the way for in-store digital advertising, such as digital out-of-home and retail media, as well as underscores the importance of crafting holistic omnichannel advertising experiences that remain consistent from digital spaces to in-person experiences.
Despite most social media sites requiring their users be 13 or older, many underage users are still accessing these platforms. Case in point: 65% of those between ages 8-10 already spend up to 4 hours a day on social media. And as they grow older, Gen Alphas appear on track to catch up to their Gen Z predecessors in terms of time spent on these platforms. This emerging trend underscores the growing importance of social media in Alphas’ daily lives.
For Gen Alpha, social media isn’t just about connecting with friends and family; it’s also about engaging with creators they admire and trust and discovering new things. In fact, 49% of kids say they trust influencers as much as their own family and friends when it comes to product recommendations. This offers brands a unique opportunity to collaborate with influencers and creators who resonate with Gen Alpha’s values and interests, thereby fostering deeper connections and brand loyalty. Additionally, younger generations are increasingly turning to social media rather than traditional search engines as their primary search tools, a trend likely to continue with Gen Alpha. This reliance on social media for search provides brands with an additional way to connect meaningfully with this younger generation in the years to come.
Like each generation that has come before it, Gen Alpha is poised to reshape the digital advertising landscape with their unique characteristics and preferences. As one of the first generations to grow up entirely in the digital age, their engagement with technology, digital video, gaming, and social media is already profound—and will likely only continue to deepen as they grow older.
For brands and marketers, understanding this dynamic generation now will be key for connecting with them as they amass more buying power. By focusing on authenticity and creativity and aligning with Gen Alpha’s values, brands can build lasting connections with what is poised to be the largest and one of the most influential generations.
Despite continued privacy and cybersecurity concerns from regulators within the US and beyond, the TikTok era of social advertising marches on. Moving way beyond its roots as a forum for lip-syncing and dancing teens, the short-form video app has blown up the model of what a social network can be, and is increasingly a must-buy for a growing number of advertisers.
To excel on this channel, brands must embrace creator-led, user-generated, unfiltered content to tell their story. And above all, they must be authentic. Indeed, nailing the creative in a way that is real and raw should be priority number one for advertisers on TikTok.
Powered by a dynamic algorithm that quickly gauges individual user preferences and then curates a highly personalized “For You” page (FYP), TikTok doesn’t have its users tell the platform what they want to see—rather, it tells them. And the internet, and advertisers, seemingly can’t get enough. The app is continually developing and implementing ad capabilities and features, and there is already much for media buyers to get excited about, particularly since it offers a complete in-app experience where users can shop directly through LIVEs, in-feed videos, or links on brands’ or creators’ profiles and check out without ever having to leave the TikTok app.
Of course, it’s not a channel without its share of troubles and controversies. Over four years after the Trump administration threatened to ban the app if its Chinese owner ByteDance didn’t divest, TikTok is once again facing an existential threat. In April, President Biden signed a law that will ban TikTok in the US unless its parent company, ByteDance, sells its stake in the app within a year, citing perceived risks to national security and user safety. That said, the law has already faced numerous legal obstacles, with a US court set to hear challenges to the potential ban this September.
Even in the face of all the controversy, TikTok has become a go-to app for millions of users and a must-use for countless advertisers. Here, we explore the evolution of TikTok through a collection of stats and facts. We’ll cover all the good stuff and all the ban-related stuff as we look to paint a picture of why TikTok continues to be the talk of the digital advertising town.
It is, quite literally, a multi-billion-dollar question: Just how did TikTok go from being a niche player to one of the most popular apps on the planet? The reality is there is no single answer, but instead a combination of factors: simple and easy-to-use video creation tools that blur the metaphorical line between creator and consumer; shrinking attention spans that pave the way for short-form video to thrive; a vast library of licensed music that allows users to easily enrich their clips with audio without fear of copyright infringement; and a community and collaborative feel within the platform (think hashtag challenges and Stitch). Its model is so successful, in fact, that it has frightened Meta and YouTube (among others) into disrupting their own business—Instagram Reels and YouTube Shorts, anyone?
“Don’t make ads, make TikToks.”
That was the invitation TikTok laid out for advertisers when it opened its brand-facing wing back in 2020. And with the company’s revenues skyrocketing, it appears that challenge has been gleefully accepted. TikTok’s ad business made its first foray into performance marketing with lead-generation ads that empower brands to collect information from prospective consumers through forms and contests. Since then, TikTok has been busy significantly expanding upon those offerings, rolling out formats like interactive add-ons, search ads, and collection ads that together play a fundamental part in the app’s monetization strategy.
TikTok has disrupted how an entire generation connects, shops, entertains and educates itself, and ultimately perceives the world. To understand why TikTok is so popular with Gen Z is to understand their inherent characteristics. Research shows that one of the defining features of this generation is that they view consumption as an expression of “individual truth.” They are also the first generation of digital natives, so they’re well-acquainted with digital advertising tactics and therefore naturally drawn to fresh ideas and creative storytelling (for example, unfiltered videos!). The fact that TikTok facilitates self-expression and celebrates authenticity plays right into their hands. In other words, TikTok and Gen Z were made for one another.
For a long time now, TikTok has been the elephant in its competitors’ boardrooms. The app’s advances in ad technology, measurement capabilities, and expansion into the digital marketing ecosystem (for instance, through music streaming and mobile gaming) indicate that TikTok is not content to simply sit in the realm of short-form video. The platform is siphoning ad dollars away from Meta, but the diversification of its portfolio could soon pit TikTok against the likes of Spotify, Apple, Amazon, and Google as it transforms into a public square for news and conversation.
After the US federal government and numerous states outlawed use of the app on government-issued devices (something many other countries have done as well), earlier this year, President Joe Biden signed a law that will force ByteDance to sell its wildly popular app—or face an outright ban across the US.
This isn’t the first time that TikTok has felt the metaphorical heat, and the months ahead should provide greater clarity on the future of the app in the US. Creators on the app, as well as TikTok itself, have filed lawsuits against the federal government in the wake of this law, and hearings are set for September. Even barring a federal ban, the app is facing regulation and scrutiny at a variety of levels.
TikTok grew into a digital advertising powerhouse seemingly overnight. Its consumer appeal and high engagement rates across numerous verticals make it a worthy option for ad spending for a wide variety of marketing teams. But as a new(ish) channel, figuring out just where it fits into the digital media mix and how much budget should be dedicated to the platform remains up in the air for many brands. And with the threat of a ban looming, marketers would be wise to start scenario planning and maintain flexibility with social ad buys so they can quickly pivot to an alternative video platform quickly if needed.
One thing is for sure, though: TikTok remains social media’s golden child, and there are great rewards available to those that get it right.
If there’s one trait that sets winning advertising teams apart, it’s the ability to adapt to change. From shifting consumer behaviors and digital media habits, to new and ever-evolving technologies, to dynamic social and economic influences, digital advertisers must constantly adapt to stay at the top of their game.
This need for adaptability is particularly evident today, as rapid technological innovation (we’re looking at you, generative AI) coupled with shifts in which generations hold the most purchasing power are forcing advertising teams to rethink how they connect with target audiences. This is particularly evident in the search and social spaces, which are seeing significant changes in usage among younger internet users.
To succeed in this landscape, digital advertisers must remain agile by staying up to date on the latest technological developments and seeking to understand how they are influencing how younger generations engage online. In doing so, marketing teams can create tailored strategies that resonate with younger audiences and maximize their impact in today’s ever-evolving digital world.
Today, digital marketers must connect with both audiences who grew up with the internet and those who did not. Looking towards the future, however, teams must be prepared to engage primarily with full digital natives, or those who have always known a connected world.
At present, nearly half of the global population is part of either the millennial or Gen Z generations. And the number of Gen Alphas, the generation that follows Gen Z, is forecast to surpass that of baby boomers by 2025. While millennials grew up with the internet as it evolved, Gen Z and Gen Alpha are the first two generations born into a world where the internet has always been an integral part of their lives.
Because they grew up with the internet woven into their day-to-day, younger consumers often expect a high degree of continuity and personalization from channel to channel. Whether they’re scrolling on TikTok or Instagram, playing a game in an app, or navigating a brand’s website, they generally anticipate a consistent and integrated experience. And, younger generations have made it clear that personalization should be a priority for advertisers, with 57% of millennials and a whopping 81% of Gen Zers saying they like personalized ads.
Given that these generations are progressively acquiring more buying power, understanding how they use the internet will be critical for advertisers looking to connect with millennials and Gen Zers now, as well as Gen Alphas as they grow older and amass more purchasing power.
Millennials, Gen Z, and Gen Alpha are all deeply familiar with the internet, with many members of these generations having never known a world without it. They spend a significant amount of time online, and use online tools in different ways than prior generations.
Take, for instance, social media. Where baby boomers, seniors, and about half of Gen Xers tend to use these platforms primarily for messaging, Gen Zers and millennials rely on them for news, short-form videos, product and service insights, and other information as well. For brands and advertisers, this presents a distinct opportunity to connect with these younger users when they’re actively searching for products, news, and other information. In fact, social media has overtaken search engines as the primary search tool for discovery among Gen Z and millennials, representing a significant shift from prior generations’ reliance on search engines for their queries.
“Social media is very much a discovery engine, as it’s visual and browsable,” says Lindsay Martin, Group VP of Search Media Investment at Basis Technologies. “To compete and attract younger audiences that are increasingly turning to social for their search needs, Google is working on enhancing their search experience by including new offerings such as Circle to Search or Google Lens.”
In addition to the social search trend, another major force is impacting how younger generations behave online: generative AI. Advertisers must understand these evolutions in behavior and plan for how they will continue to change as generative AI further disrupts the landscape.
Though ChatGPT has only been around for a couple of years, 61% of Gen Z and 53% of millennials report that they are using AI tools in place of search engines when seeking information on a topic. And, recent reports have found that search engine volume could drop by 25% by 2026, thanks to AI chatbots and other virtual agents.
Additionally, search engines are integrating genAI features that will further change the broader search landscape, likely in an effort to appeal to these younger audiences. Google, for example, recently introduced AI overviews, which provide an AI-generated summary as the first “search” result when users turn to the platform for a query. Since this overview appears before all organic search content, it could very well decrease the amount of organic web traffic from what websites have been able to generate in the past.
“In this context, there will likely be an even greater emphasis on paid (rather than organic) search,” says Martin. “The paid ad experience will also continue to evolve to monetize the AI experience. For instance, at Google Marketing Live earlier this year, Google made announcements about testing Search and Shopping Ads in AI Overviews, though this is still in early stages.”
Social media platforms have been quick to embrace AI-driven features as well. Meta AI, for example, is a new AI-powered assistant that answers questions and helps connect Meta platform users to more relevant content. As social media continues to evolve with the help of GenAI, more unique opportunities will become available for brands to connect with younger users as they spend time connecting with others andsearching for new information and products on these platforms.
The question, then, is how advertising teams can adapt to younger generations’ unique online habits amidst these technological shifts. Leaders should consider the following strategies as they strive to connect with younger generations:
Even as their media habits change and the channels themselves evolve, younger consumers expect a seamless experience across all digital channels. To implement an effective omnichannel strategy, teams can use data to identify key consumer touchpoints and preferences, work cross-functionally to ensure different departments are aligned and working towards a unified brand message, and leverage advancements in machine learning and AI to automate and optimize personalization efforts. Additionally, making optimization a priority and regularly reviewing and refining strategies based on real-time data can help teams stay ahead of trends and maintain a cohesive brand experience.
Advertisers should ensure they have systems in place to effectively collect, organize, and analyze customer data to understand how younger audiences are engaging with different platforms, particularly as those platforms evolve. To that end, leaders might consider investing in newer tech offerings—for example, CDPs, which streamline the collection, organization, and use of first-party data; or automation solutions, which allow teams to access and action critical data through a single platform. By making it easy to both gather and analyze insights, advertisers can create personalized messaging that resonate with target audiences’ unique needs.
As younger generations’ online behaviors evolve amidst technological advancements, it can be easy to see this complexity as an obstacle to success. However, leaders who reframe this change as an opportunity for experimentation and growth will be able to maintain relevance and forge meaningful connections with young audiences—both today, and in the years to come.
For instance, leaders might encourage their teams to experiment with different forms of interactive content that is particularly impactful with young audiences today (i.e., short form videos or gamified ads), use A/B testing to determine which iterations and placements yield the highest engagement rates, and then use insights from these experimentations to inform future marketing efforts. By embracing experimentation, teams can bolster media efficacy, hone their creativity, and create a team culture centered on adaptability.
Digital advertisers today face the challenging task of adapting to younger audiences’ preferences and online habits, particularly as these habits shift based on new technologies and advancements. By seeking to understand these consumers’ online behaviors amidst profound digital transformation, advertising leaders and their teams can gain crucial insights to effectively capture the attention and loyalty of today’s digitally savvy consumers.
Specifically, identifying how technological innovations in search and social are influencing younger consumers’ behavior is key for today’s advertisers. By researching and implementing strategies based on these shifts, advertisers can create content that resonates with younger audiences, meets them when and where they’re spending time online, and fosters connection in today’s ever-evolving digital landscape.
Earth Day may have already come and gone, but that doesn’t mean the opportunity to reflect on how we can protect the future of our home planet has passed. And, given the bleak outlook recent reports have presented on the health of our environment, it’s critical these conversations continue year-round.
Projections on the trajectory of climate change are growing ever more dire, with targeted carbon emissions goals looking increasingly out of reach barring swift and major regulatory and/or corporate changes. The severity of the situation even led to UN Secretary General António Guterres’ recently calling for countries to ban advertising from fossil fuel companies, calling these corporations the “godfathers of climate chaos.”
In the face of all this, organizations continue to tout their climate pledges and roll out marketing campaigns—or, depending upon who you ask, PR stunts—demonstrating their commitment to environmentally friendly values and practices. But as the scientific community continues to sound the alarms on the coming climate crisis, many sustainability-minded consumers are making it clear that they aren’t buying what brands are selling. And with consumers increasingly looking to corporations for leadership on the climate crisis, the old methods of green marketing just aren’t good enough.
The past few years have seen a major step forward in the advertising industry’s efforts to combat inaccurate and anti-science climate claims, as Google, YouTube, Pinterest, and others announced policies banning ads for (any monetization of) content that denies climate change.
But for marketers, there is still a significant amount of work left to do in the green space, considering that consumers are increasingly skeptical of many brands’ Earth-friendly sustainability claims. Case in point: 52% of people globally report they have encountered misleading or false information about brands’ sustainability efforts. At the same time, emerging GenAI technology both holds great promise for advertising teams and poses a significant climate challenge due to its energy usage. Given these complexities, marketing leaders looking to authentically champion sustainability must be proactive and intentional in both how they approach climate- and sustainability-focused advertising, and in how they leverage new technologies like AI.
If you take only one thing away from this article, let it be this: Consumers today don’t have time for sustainability claims that your brand can’t back up. More than half of Canadian consumers distrust brands’ “green” or sustainability claims, while 67% of global consumers feel that brands only involve themselves with social issues like sustainability for commercial reasons.
Beyond consumers’ greenwashing concerns, recent months have seen a flurry of regulatory activity to combat greenwashing, with the EU approving a new greenwashing directive that imposes stricter regulations on companies’ sustainability claims and the Canadian government passing new corporate greenwashing rules into law in late June. The new regulations in the EU tackle the issue of generic and/or unsubstantiated claims, introducing very specific rules for how and when companies can make environmental and sustainability claims. Similarly, the new law in Canada prohibits companies from representing “a product’s benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change that is not based on an adequate and proper test.”
Amidst this heightened regulatory action and consumer distrust, advertising leaders and their teams must be intentional and authentic in the claims they make. A particularly helpful resource for evaluating sustainability claims is the World Federation of Advertisers’ Global Guidance on Environmental Claims, which identifies six key principles for marketers who want to establish their brands as trustworthy and avoid greenwashing accusations.
In essence, advertisers must accept that when it comes to the environment and sustainability, the bare minimum isn’t good enough anymore—so if that’s all you have to tout, then it’s probably not worth sharing. Consumers (particularly young consumers) will see right through it, and—depending on how egregious your exaggerations are—call you out on it.
Indeed, marketers should embrace what might as well be the new climate advertising Golden Rule (or, in this case, Green Rule): “If you don’t have anything meaningful to say, don’t say anything at all.”
Since its public debut in late 2022, generative AI has garnered significant attention—both within digital advertising and beyond. In fact, 77% of agency professionals believe it is the trend that will most shape the next decade of digital advertising.
But this emerging technology comes with a hefty price tag—specifically when it comes to its energy usage. According to the International Energy Agency’s (IEA) 2024 forecast for global energy use, the average energy demand of a ChatGPT request is nearly 10 times that of a typical Google search. If ChatGPT were to be used for the nine billion searches that happen daily, this would require nearly 10 additional terawatt-hours of energy each year. That’s more energy than 952,000 average US households use in a year!
Businesses who value environmental responsibility must understand this aspect of generative AI to ensure their campaigns are energy efficient. Though there are many ways this technology can streamline campaigns, being intentional about its use and staying abreast of new developments in more energy-efficient ways to leverage GenAI can help mitigate potential climate impacts. By using generative AI thoughtfully, teams can significantly reduce unnecessary energy consumption, thereby supporting sustainability and responsible business practices.
When it comes to planet-conscious marketing, the most successful brands will be those that find creative ways of addressing climate change that feel authentic to their existing images.
Take Patagonia, for example. In 2011, the outdoor apparel brand made waves with its “Don’t Buy This Jacket” ad on Black Friday, where it broke down the specific environmental cost of making one of its items (down to the amount of water used and carbon dioxide generated) and encouraged audiences to buy only what they need. Since then, it has launched a Worn Wear initiative, where consumers can both trade in their own used gear and purchase others’ pre-loved items, thus further reducing their environmental impact.
And in 2022, Patagonia’s owner Yvon Chouinard set a new bar for corporate environmental leadership when he made Earth the company’s only shareholder, pledging all profits to the fight against climate change. Over the years, Patagonia has consistently used clever, on-brand marketing to advocate for good—all while backing up their efforts with real, measurable action. Though not all brands will go to the same lengths to demonstrate their commitment to the environment, advertising teams can look to companies like Patagonia for inspiration for how to meaningfully engage in the climate change conversation.
Lastly, when you’re running your sustainability-focused digital advertisements, make sure they appear alongside content that reflects those same brand values—and, ideally, support the kinds of publishers that promote similar ideals. Work with partners that prioritize brand safety and take advantage of programmatic solutions like block lists, allow lists, and high quality inventory such as programmatic guaranteed and private marketplaces (PMPs) to eliminate the risks of problematic content and/or sites that endorse climate-damaging products or industries. In prioritizing brand safety, you can turn yourself into a trusted messenger that’s more likely to appeal to values-driven consumers.
Digital marketing leaders and their teams are at a critical juncture in their approach to sustainable advertising. Amidst escalating climate warnings, there is no space for greenwashing—a fact that is underscored by the recent flurry of regulation aimed at curtailing such misrepresentations. Additionally, industry professionals must be aware of the energy costs of generative AI, and use those insights to inform how and when they leverage the technology within their campaigns.
To succeed in this evolving landscape, teams must embrace transparency and authenticity, steering clear of misleading claims and unsustainable practices. By embracing ethical advertising strategies that meet consumers’ demands for transparency as well as new regulations, fostering creativity that aligns with their unique brand values, and approaching new technology intentionally, marketers can not only build trust with consumers, but also contribute meaningfully to the urgent global need to address climate change.
If it seems like everyone around you has been getting the adventure itch lately, they’re in good company: More than 90% of Americans are planning to take a trip in 2024, with 50% intending to travel more this year than they did last year.
While concerns over inflation linger, with 54% of Americans reporting that the economy is impacting their travel plans, more than half still have ranked travel as a budget priority for 2024. And with "relaxing and recharging” ranking as the number one reason Americans want to travel this year, it seems that a good portion of consumers value the opportunity to unwind enough to feel that travel is worth the splurge, despite inflationary concerns.
Airlines, hotels, and other travel businesses looking to connect with these budget-conscious, relaxation-seeking consumers face new and unique challenges, from shifting consumer habits to rapidly evolving technologies. To set their teams up for success and make the most of the opportunities available to them in 2024, marketing leaders will need to understand these challenges and implement fresh strategies to address them proactively.
Inflation has been a constant thorn in consumers’ and marketers’ sides in recent years, with consumer price inflation increasing by a whopping 19.32% between January 2020 and April 2024. Many consumers are adjusting accordingly and have begun dedicating more of their budgets to travel: Where only 24% of Americans planned to set aside $4,000+ for travel in 2023, that number has risen to 52% in 2024.
Still, price is still top of mind for many consumers—15% have cancelled or postponed a trip in 2024 due to the cost of travel—and travel marketers would do well to factor that into their advertising messaging, emphasizing discounts, low rates and bundles while highlighting value for price-conscious consumers.
Loyalty programs should also be front-and center, as 50% of US consumers in 2023 were airline travel rewards members, and 49% were hotel travel rewards members, according to a panel done by Basis Technologies in partnership with GWI. By crafting ads that highlight value and low rates, travel marketers can speak directly to the factors that are most relevant to consumers.
The initial years of the pandemic brought about many shifts in consumer behavior that are still with us today, including (but certainly not limited to): An explosion of remote work, a renewed focus on health and sustainability, increased digital engagement, and a heightened sense of budget-consciousness. All these factors are now driving new audience segments and travel trends.
For example, the rising number of people who now work from home has helped spur the formation of a new audience segment: “bleisure travelers,” or people who travel for a combination of business and leisure. At the same time, solo travel has increased by 42% among US consumers since before the COVID-19 pandemic, according Basis/GWI research. And, surprise trips are gaining ground amongst US consumers this year, with 52% of travelers interested in taking a vacation where the location and all the accompanying details are a surprise until departure.
Each of these audiences display unique characteristics and behaviors that advertisers can use to connect with them more effectively, and travel marketers who want to reach them should adjust their tactics accordingly. This could be by leveraging a customer relationship management (CRM) platform to collect, organize, and research customer data; using machine learning technology to analyze first-party data and identify patterns, trends, and other insights; or investing in a researcher (or team of researchers) to organize and dig into existing data so it can be used effectively. Regardless of which method(s) they use, advertisers must consider the unique wants and needs of these new and emerging groups and adapt their campaigns to meet those needs.
Which leads us to our next challenge…
While personalization in digital marketing has become a must-have for all industries, it’s particularly impactful for travel and tourism brands. In fact, 86% of travelers say they’re looking for personalization during their travel experiences and interactions. And personalization isn’t just a trend on the marketing side—businesses are leaning into it to improve product and service experiences as well.
Delta Airlines, for instance, uses personalization technology to deliver personalized in-flight entertainment, onboard amenities, and more to customers. Hilton also leverages customer data—specifically, data obtained through their Hilton Honors loyalty program—to provide a more intimate and individualized customer experience.
Marketers should personalize the experiences they curate for consumers to complement personalization on the product and services side. For example, a hotel brand might craft one variation of ad creative that emphasizes amenities that would appeal to families, and another that’s geared toward solo travelers. Or, a tourism company that offers immersive local experiences might target audiences 21+ with creative that features alcoholic beverages.
Capturing audience information and leveraging it, however, are two different things entirely. Marketing teams need systems to both collect this data and connect it to their CRM platforms to create personalized advertising experiences. The challenge? Many marketing teams today use a variety of point solutions to navigate the complexity of the digital media landscape. And, as a result, many travel marketing teams struggle with poor data quality and a lack of data consolidation.
There are a variety of ways to address this, from upping your team’s number of data analysts to investing in tech like customer data platforms (CDPs) and universal reporting systems. Marketing teams with robust and secure systems for gathering, storing, and making the most of customer data will be well-positioned to create meaningful and personalized campaigns—especially looking ahead to the cookieless future.
While it might be tempting to imagine that Google will continue to delay the loss of third-party cookies in Chrome in perpetuity, the cookiepocalypse will inevitably arrive, and it will do so in the not-too-distant future. According to Google’s latest announcement, the tech giant’s current goal is to begin cookie deprecation in early 2025. If all goes according to plan (which, granted, is a pretty big “if”), that means travel brands and agencies only have about six months to get their ducks in a row before losing the targeting and attribution enabled by third-party cookies. As such, it’s critical that travel brands and agencies proactively strengthen their team members’ fluency with cookieless targeting and attribution this year in order to set their businesses up for success once third-party cookies are gone for good.
In terms of cookieless advertising solutions, activating first-party data should be a top priority, as most travel brands have the ability to collect large amounts of first-party data from customers and prospective customers through their interactions on brands’ websites and social media pages. However, that data is often siloed across many different third-party vendors, preventing advertisers from leveraging it to its full extent. As such, travel brands must adopt systems like CDPs—which can collect first-party data from many different sources, process and standardize it, and perform real-time segmentation for targeting—to unify their first-party data and use it for cookieless targeting and attribution. CDPs can also empower advertisers to map out their consumers’ buying journeys to assist with attribution.
Contextual advertising will also be an essential targeting solution for travel advertisers in a cookieless world. Given that the majority of US consumers use digital resources to research their trip accommodations before booking, there’s a big opportunity for travel brands of all kinds to connect with consumers in ideal moments as they plan their vacations.
To better connect with their target audiences throughout their customer journey, travel marketers need to keep a pulse on shifts in consumer behavior. By first identifying key shifts in consumer behavior, travel brands can ensure that audiences are seeing the right messages at the right time.
What might this look like in practice? Well, a brand who wants to earn solo travelers’ dollars might focus on streaming video ads to build awareness of their products and services, since these travelers often watch online videos to occupy their down time on their solo travels. Teams could then retarget these prospective travelers via paid search or native ads as they move from awareness towards consideration and purchasing.
Or, a travel agency working with a brand that wants to reach road trippers might focus on connected TV (CTV) and other digital video channels during early stages of the customer journey, as well as roadside digital out-of-home (DOOH) billboards, since these travelers watch a lot of online videos and spend a significant amount of time on the road. With retargeting, advertising teams can then place additional, personalized ads across digital channels like audio (for the drivers listening to their favorite music and podcasts) and social media (for the passengers posting photo dumps of their travels) to move these customers further down the funnel. By both leaning into current consumer trends and thinking holistically about their path to purchase, travel brands can make meaningful connections with travelers throughout their individual journeys.
For travel marketers to ensure great experiences for their target audiences and consumers, it’s critical that they embrace the latest technological innovations. And the last couple of years have seen particularly rapid advances in this area, as generative AI has become more popular with consumers and advertisers alike.
First and foremost, travel companies need to ensure their customer-facing technology ensures a great experience, as consumers’ path to purchase is increasingly digital. As noted previously, most US consumers use digital resources to research their trip accommodations before booking, with more and more younger consumers in particular using generative AI tools to assist in their travel planning. And consumers are increasingly reserving their travel digitally, which is driving a growth in digital sales. Data from Vivvix and Pathmatics show that the travel brands who spend the most on advertising are also the top digital advertising spenders, indicating that top brands are tailoring their strategies in response to the rising preference for digital.
For brands, perfecting a digital presence will help with both garnering new customers and retaining existing ones. At the very least, a brand’s digital presence must ensure a good customer experience: When prospective customers see an ad for a company but encounter overly-complex or faulty tech when they click on it (i.e., their click brings them to a “page not found” error on the company’s website or to a hard-to-navigate app), that experience can have negative impacts on conversions, not to mention customer loyalty.
Additionally, travel marketers should take advantage of newer technology-driven tactics to maintain a competitive edge. One prominent example of a technology-enabled tactic that travel advertisers can embrace is dynamic pricing. Advertisers working for airlines and hotels can use factors such as time of year, day of the week, and corporate versus leisure travelers to estimate the right price point to drive conversions. Using technology backed by artificial intelligence, it’s possible to make these adjustments based on daily changes in market demand. Some pricing engines have the power to update fares as often as every 15 seconds, and businesses are starting to see the huge difference this makes in bookings.
Though this new technology-driven strategy can result in significant benefits for travel advertisers, it can also present distinct challenges. To use dynamic pricing requires much more than just investing in the tech: Marketing teams must also rework their data management processes, including integrating CRM and revenue analytics. This can be made even more difficult if customer data is messy or has not been consolidated to a single interface—another reason why it’s so important for travel and tourism advertisers to prioritize data quality and tech stack consolidation.
More and more travelers are looking for environmentally sustainable travel options, with 80% of travelers worldwide agreeing that sustainable travel is important. And while it’s true that marketing teams may not have much say in their company’s larger sustainability initiatives, there are ways they can prioritize the environment through their advertising practices.
First and foremost, marketing teams should avoid greenwashing at all costs. Making sustainability claims that a brand can’t back up is inauthentic and diminishes consumer trust. And, these damages often extend beyond tarnishing a brand’s reputation: Making false or misleading claims can negatively impact customers’ experiences with the products or services they provide.
Additionally, there are strategies that digital advertising teams can use to help minimize their carbon footprint. One such strategy is to prioritize capturing audience attention over serving as many impressions as possible—especially since anywhere from 30% to 40% of online ads are “not ultimately viewed by consumers.” Another is by streamlining internal processes to reduce the amount of computing power needed for a typical campaign workflow. Rather than using many point solutions, consolidating to a single, automated platform for every step of the campaign can help advertising teams further minimize their environmental impact.
By leaning into sustainability, even in ways that may not be immediately apparent to consumers, travel and tourism brands can back up authentic statements about their commitment to the environment—and in doing so, match their consumers’ values.
All in all, one of the most important factors in marketing teams’ success this year will be how well they understand their consumers’ behaviors, values, and expectations.
To meet the needs of these travelers, marketing teams must be flexible and intentional, consider the entire customer journey, lean into personalization, emphasize their value in an authentic way, and adapt to innovations in technology. It’s a lot to consider, but hey—so is making all the arrangements for a memorable getaway!
—
Agency marketers working in the travel industry are adapting not only to shifting consumer behavior, but also to massive changes taking place in the advertising industry and in the agency world specifically. Curious as to how your agency peers feel about their jobs, their agencies, their industry, and the challenges and opportunities that are shaping their futures? Check out our 2024 Advertising Agency Report to find out.
From an increasingly complex media landscape, to the Great Resignation and an ongoing talent crunch, to prolonged economic uncertainty, to signal loss and heightened regulatory action, advertising agency leaders have faced a myriad of challenges that have impacted their operations, strategic planning, and financial profitability over the past several years.
Beneath the surface of these more visible challenges, a quieter yet equally significant issue plagues agencies: inefficiency. In fact, in a recent survey of agency professionals, respondents identified inefficient processes as the biggest challenge facing their agency today. These processes show up in a variety of critical areas, spanning project management, communication methods, resource allocation, client management, technology utilization, workflow processes, and more, and add an additional layer of complexity to the challenges advertisers are already navigating.
Not only do inefficient processes drain valuable time and resources, but they also hinder agencies’ ability to deliver high-quality campaigns promptly. When teams are burdened with inefficiency, it can create a ripple effect that damages client relationships, leads to employee burnout and turnover, and ultimately impacts an agency’s bottom line. As such, assessing and improving process efficiency is crucial for agency leaders who want to remain competitive, adapt to rapid industry changes, and ensure sustainable growth.
High turnover rates have long been a challenge for advertising agencies, with recent years seeing an outsized impact on junior-level employees. Though many factors impact employee turnover, inefficient processes can be a significant driver—particularly at a time when agency professionals already feel as though their jobs are harder than they were in the past.
Amidst these pressures, inefficiency can severely affect wellbeing and job satisfaction. Inefficient, duplicative workflows exacerbate stress, leading to frustration as employees spend excessive time on repetitive, low-value tasks. This also leaves less time for mentorship and meaningful collaboration, both of which are critical for engaging and retaining younger generations of talent. Frustration from inefficiency often culminates in burnout and/or disengagement, as workers feel overburdened by obstacles that impede their productivity and hinder their ability to deliver high-quality work.
For agencies that are already navigating talent retention woes, inefficiency can further exacerbate them: As skilled professionals become disillusioned with the lack of progress and innovation within their team, they might become more likely to seek opportunities elsewhere. And, the resulting high turnover rates not only disrupt team dynamics but also incur significant costs in terms of recruitment, training, and lost expertise. Research has found that employee disengagement and attrition could cost a median-size S&P 500 company $228 million per year—or more.
Addressing inefficiency is therefore crucial for building a positive workforce culture and preventing turnover and burnout—particularly as many agencies strive to accomplish more with fewer resources. By carefully evaluating processes and looking for ways to streamline operations, agencies can significantly improve both productivity and job satisfaction.
Specifically, leaders might consider using employee surveys and/or an internal efficiency audit to gauge how existing processes are working—or not working—within their agencies. For instance, if team members are overwhelmed by repetitive tasks, AI tools could help optimize workflows and free up employees to focus on more strategic, creative, and high-value projects. Such tools not only enhance collaboration but also allow for a more dynamic and responsive work environment, in which agency professionals feel empowered and fulfilled by their work. Or, if employees are making errors due to using too many different communication channels, leaders might consider unifying those efforts into a single platform to minimize errors and allow their teams to focus their energy on more creative, fulfilling tasks. By leveraging employee insights to identify ineffective processes, leaders can ensure they’re prioritizing the efficiency improvements that will have the greatest impact on their teams’ work and wellbeing.
Beyond impacting agency workforces, efficiency—or lack thereof—shapes client relationships. Nearly half of agency professionals say client relationships are more strained today than they were two years ago, and that sentiment is even more pronounced among those who feel that digital advertising has grown more difficult over that same time period.
When agencies struggle with inefficient processes, project timelines can become unpredictable, leading to missed deadlines and delayed campaign launches. Clients rely on timely delivery to meet their marketing goals, and any delay can disrupt their strategic plans, resulting in frustration and dissatisfaction. Additionally, inefficiency can lead to inconsistent communication and coordination, eroding trust and weakening the client-agency relationship over time.
Inefficiency can also compromise the quality of the work produced. When teams are bogged down by redundant tasks, they have less time to focus on creativity and innovation. The resulting campaigns may lack the strategic insight and originality that clients expect, ultimately affecting their brand’s performance in the market. As agency leaders look to minimize inefficiency among their teams to improve client relationships, tools like advertising automation software can prove particularly useful: By breaking down siloes and integrating all advertising activities in one place, leaders can ensure better coordination, communication, and execution across their teams.
Inefficiency can also significantly impact agencies’ bottom lines by draining resources and reducing overall profitability. For instance, consider an advertising agency tackling multiple high priority client campaigns during a particularly busy period. Due to outdated project management processes, employees spend excessive time completing manual data entry, communicating with clients over a variety of disparate channels, and navigating repetitive approval processes. Instead of using a unified platform, the team relies on multiple spreadsheets and email chains to track project progress, leading to confusion and errors. This disorganization requires employees to work overtime to meet deadlines, resulting in higher labor costs. And when working overtime to manage inefficiency becomes the norm, high rates of burnout and turnover are sure to follow.
Even more, despite those additional hours worked, the quality of the output does not improve—that extra time is spent on managing chaos rather than enhancing creativity or delving more deeply into strategic planning. The campaigns delivered likely lack the innovative edge expected by clients and fail to capture audience attention in today’s competitive digital environment. This can lead to the agency’s profitability suffering as they pay more wages without seeing an improvement in deliverables, suffer from strained client relationships, and face the potential of lost business as a result of this strain.
To address these inefficiencies, this agency might opt to centralize their task management, workflow, communication, and collaboration into one unified platform, reducing their reliance on spreadsheets and email chains. Additionally, they could use AI tools to help with the low-level tasks that currently monopolize their employees’ time, freeing them up to focus on more fulfilling, creative work.
Addressing inefficiency, then, not only helps agency leaders to build a strong workforce and maintain good relationships with their clients, but also increases their profitability and ensures their long-term sustainability. By streamlining processes, adopting automation and AI tools, and fostering a culture of efficiency, agencies can reduce labor costs, enhance the quality of their work, deliver more impactful campaigns, and set themselves up for long-term growth and profitability.
Though advertising agency leaders face a variety of challenges, inefficiency is one that cannot be ignored. With its potential to strain workforces, worsen talent retention woes, burden client relationships, and hurt agencies’ bottom lines, ignoring inefficiency comes at a steep price. In prioritizing efficiency, agency leaders can not only enhance productivity and morale but also position their businesses for long-term success in an increasingly competitive industry landscape.
__
Want more insights on how agency professionals feel about the challenges and opportunities impacting their jobs, agencies, and industry as a whole? We surveyed advertising professionals across the US to understand how they feel about the state of advertising agencies in 2024. Check out our 2024 Advertising Agency Report for all the top takeaways.
Artificial intelligence (AI) has played a significant role in digital advertising for years now. Initially used for basic data analytics and targeting, the technology has evolved considerably since its first applications in advertising, and its use has grown more advanced and widespread in kind. Today, digital advertisers rely on AI for campaign automation, data-driven decision-making, creative optimization and personalization, audience insights, and more.
Over the last several months, a specific type of AI has been making big waves—specifically, the kind that can write and perform songs, turn images into poetry, and clone individuals’ voices with an alarming level of accuracy. Since generative AI (GenAI)’s public debut in late 2022, leaders have begun to test its new features within their campaigns, particularly those related to content creation, design, and creative optimization/personalization. And given GenAI’s pattern recognition and data processing abilities, this technology also has the potential to have a significant impact on analysis, media buying, and even strategic decision making. All in all, it’s not hard to imagine a world where the efficiency, speed, and ease of launch GenAI offers shapes nearly every aspect of the digital marketing process.
But with the opportunities it offers come warnings and concerns from a variety of experts, as well as questions around its appropriate usage and regulation. With GenAI regulation in its beginning stages, leaders must understand what aspects of GenAI use will likely become regulated and stay abreast of legislative developments in order to make the most of the technology while maintaining compliance and fostering consumer trust.
In summer 2023, the EU came out with the world’s first comprehensive AI regulation: the EU Artificial Intelligence Act. The law was approved by the European Parliament in March 2024, and the EU has since established an AI Office that is tasked with implementing the regulation.
The EU AI Act approaches AI regulation by classifying different AI technologies and outlining specific obligations for providers of those technologies according to their level of risk. Beyond outright banning certain types of high-risk AI systems, it also establishes regulation for lower risk and general purpose GenAI. For instance, the act requires that GenAI providers comply with existing copyright laws and disclose the content used to train their models. It also requires that companies disclose when their content has been manipulated by AI.
Though agency leaders and brands not operating in the EU aren’t legally required to comply with this legislation, they can benefit from understanding, and perhaps even embracing aspects of, the AI Act. For example, some teams may want to disclose when their content has been AI-generated or modified—not just because the AI act requires companies working in the EU to do so, but because 75% of consumers feel it’s important. Whether or not businesses working outside the EU choose to comply with parts of the AI Act, understanding its requirements for advertisers is beneficial, as they may reflect consumer preferences around AI, and may eventually be adopted in US legislation.
The US, on the other hand, has yet to implement any nationwide, comprehensive AI regulation. But that doesn’t mean it hasn’t been a topic of significant discussion and focus.
Over the last few years, Congress has held committee hearings on oversight of AI, and in September 2023, Senate Majority Leader Chuck Schumer convened a closed-door AI insight forum where tech leaders, two-thirds of the Senate, and labor and civil rights leaders gathered to discuss major AI issues and implications.
Since then, many bills have been introduced aimed at regulating AI. Additionally, House leaders recently announced a new, bipartisan AI task force that will explore how Congress can balance innovation and regulation as AI technology continues to evolve—with a focus on its intersection with safety and security, civil rights issues, transparency, elections, and more.
Beyond these developments on Capitol Hill, President Joe Biden signed an executive order in late October 2023 on the “safe, secure, and trustworthy development and use of artificial intelligence.” Though this order outlines clear action steps for the oversight and regulation of AI—including implementing standardized evaluations of AI systems, addressing security-related risks, tackling questions related to novel intellectual property, and more—these are just strong recommendations at present and would require congressional action to become enforceable law.
This order also tasks the Department of Commerce with developing a report that outlines potential solutions to combat deepfakes and to clearly label artificial content. Though the results of this report are forthcoming, brand and agency leaders should be aware that its outcomes could have an impact on how they label marketing collateral that is AI-generated. The executive order specifically cites watermarking as a potential way to label such content, and it’s possible that marketing teams could be responsible for watermarking all AI-generated content in their campaigns in the future.
Additionally, the Federal Trade Commission (FTC) has made it clear that AI oversight and regulation is one of their current areas of focus. They have proposed new AI-related protections, and, at the IAB’s recent Public Policy & Legal Summit, they emphasized how critical it is for advertising leaders to be aware of the risks of bias, privacy, and security posed by GenAI, and to regularly conduct AI-focused risk assessments to help mitigate these potential risks.
In terms of US copyrighting-related regulations, AI-generated content currently cannot be copyrighted. However, the Copyright Office recognizes that “public guidance is needed,” especially when it comes to works that include both human-generated and AI-generated content. As such, they have launched an agency-wide initiative to further explore these issues.
At the state level, nearly all US legislatures in session are considering AI-related bills. Many of these are focused on algorithmic discrimination, which is when an AI-powered tool treats an individual or group of people differently based on protected characteristics. Like the EU’s AI Act, several of these bills approach AI regulation by distinguishing between high-risk AI systems vs. more general-purpose AI models, with different regulatory requirements depending on a tool’s classification.
Though AI-related regulation in the US remains primarily in the realm of guidance for now, advertising leaders can proactively utilize this guidance to plan for the impacts of forthcoming regulations. By building out systems to safeguard consumer safety and trust against the risks posed by AI now, advertising leaders can foster an environment of ethical AI usage, and set their teams up to adapt effectively as regulation becomes more concrete.
In many ways, what we’ve seen so far is just the beginning of AI regulation, and advertisers can expect to see a lot of movement in this space in the months and years ahead. Those brands and agencies that seek to understand current guidance to develop ethical AI practices will be well-positioned to adapt as these new regulations and recommendations arise.
At present, advertising and marketing leaders can benefit from expanding their knowledge and understanding of new GenAI tools, as well as their potential risks. Digital advertising leaders should be aware of the top threats GenAI poses to advertisers, including its ability to:
To navigate these risks, it can be helpful for teams to conduct AI-focused risk assessments and to request their partners/vendors do the same, so they can identity and proactively address any challenges specific to the tools they are using. And, when it comes to using AI-generated content, simply ensuring that all materials are reviewed and edited by a human can help prevent biased content from ever leaving the chat box or image generator, and can halt the spread of mis- and disinformation. By implementing these processes now, brands and agencies will have a leg up as more concrete AI regulation develops in the future.
As generative AI continues to evolve, so too will the regulations that govern it. Marketing and advertising leaders will be well-served to approach this technology in a balanced way that allows them to both harness its power and navigate its risks. By putting systems in place to evaluate and assess AI tools and to address their potential risks head-on, leaders will not only ensure they’re using this technology in safe and productive ways but will also prepare their teams for complying with the types of legislation we’re likely to see coming down the line.
__
Want insights on how marketers and advertisers are using generative AI and how they think it will change the industry moving forward? We surveyed over 200 marketing and advertising professionals from top agencies, B2B and B2C companies, non-profits, and publishers to understand how industry professionals feel about GenAI’s impact on the advertising industry—and how it could shape the future of marketing.