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CO2 emissions and climate change: Subjects typically reserved for discussions among the world’s politicians, environmentalist groups, the scientific community, non-governmental organizations, and multinational conglomerates. But are they relevant to the digital advertising industry? You bet—and more than that, they present an opportunity for marketers.
Many of the world’s largest brands are working to tout their green credentials and communicate their milestones—successes like innovating packaging to reduce waste or optimizing their supply chain to become net zero. But what about the environmental impact of serving ads highlighting those efforts throughout the online ecosystem? The carbon cost involved in that process is meaningful, and it has often been overlooked...until now.
Indeed, two drivers have nudged this issue into the marketing spotlight:
In other words, brands willing to tackle the issue head-on stand to gain a more positive brand perception and higher ROI on ad spend. Like nearly every facet of society, digital advertisers have a role to play in decarbonizing the economy to meet the goals outlined in the Paris Agreement, and there are great rewards available to marketing organizations that tap into growing green value pools and actively participate in the sustainability movement.
A seminal environmental impact assessment review of online advertising estimated that in 2016, one-tenth of all emissions emanating from the internet—between 20.38 to 282.75 terawatt-hours (TWh) of energy—were attributable to online advertising. That was seven years ago! In the time since then, digital advertising has exploded and evolved, then exploded and evolved some more—and all the while siphoning dollars away from traditional offline media (radio, print, and TV).
Of course, it’s difficult to grasp whether that percentage share has increased on an annual basis up to now—especially considering the emergence of other data-hungry internet-related systems like cryptocurrency, non-fungible tokens (NFTs), and generative AI—but it would be difficult to argue that the total energy usage of digital advertising hasn’t grown considerably. Of the $370+ billion US marketers are forecast to spend on advertising this year, a shade under three-quarters of that (74.6%) will go to digital channels, up from just 37.6% back in 2016. And there are no signs of this trend slowing down anytime soon, with that share projected to continue climbing every year through at least 2027, indicating the industry’s carbon footprint is only likely to keep increasing.
According to Good-Loop’s online carbon calculator, a sample ad campaign comprised of a 100-megabyte video file that delivers 100,000 impressions in the UK equates to around 5.4 tons of carbon. For a little perspective, that’s the same as driving over 13,000 miles in an average gasoline-powered passenger vehicle. Sum all the millions of digital activations that brands are collectively running at any given time and the energy and emissions implications become clear.
At question here is the mechanism by which ads are delivered to audiences, particularly as it pertains to programmatic buying. In the nanoseconds it takes for an ad to load on a webpage, a plethora of technology companies (such as ad agencies, data-management platforms, data clean rooms, ad exchanges, ad servers, ad verification firms, demand-side platforms (DSPs), supply-side platforms (SSPs), and brand-safety vendors) take part in a bidding process to win the auction that puts the ad in front of the consumer. In the process, thousands of servers are springing into action, requiring electricity to realize each ad call.
In essence, there is a significant amount of computing firepower at the heart of digital advertising, and as the landscape expands and grows more complex and fragmented, leaders must take urgent steps to first curb, then reduce, the carbon cost of its operational infrastructure.
Consumers today care about more than just the products and services a business creates and provides—they increasingly want to see actions that demonstrate strong societal and cultural values. Brand purpose is emerging as a key decision criterion, and consumers across the generational spectrum are putting environmental impact at its center:
Of course, what’s top of mind for consumers must be top of mind for brands. After facing a digital transformation imperative in the wake of the pandemic, marketing organizations are now dealing with a sustainability transformation imperative. To ignore it is to risk reputational fallout…and to miss a seriously golden green opportunity.
Now here’s the interesting thing: Becoming a more climate friendly brand doesn’t have to mean spending more money—in fact, the opposite is true. By making small tweaks to campaign KPIs and optimizing the digital supply path, marketers can start to minimize their carbon emissions in a way that is also beneficial for overall campaign performance. What’s the saying? Two birds, one stone? Let’s explore:
Attention metrics are on the rise: A trend fueled by the idea that the old proxies for performance—the likes of viewability, reach, and frequency—are no longer optimal since they fail to provide an accurate measure as to whether target consumers actually see ads. Attention data technology works by filling that knowledge gap, providing more definitive insights into how audiences engage with a brand’s content on specific domains.
How does this relate to cutting carbon costs, you may ask?
One study found that by removing impressions that receive less than 0.5 seconds attention time, brands can reduce total emissions by 53% while increasing the average attention time per impression by nearly 40%. Or, to put it another way: advertisers that pull spend from publishers they know are offering little-to-no bang for their buck can weed out wasted spend and lower their carbon footprint in the process. Win-win.
Remember all those technology companies involved in the programmatic bidding process? Momentum is building toward a more streamlined—and, therefore, more efficient—network. Eliminating redundant auctions for the same inventory and optimizing the flow of data not only makes sense from a business perspective, but also reduces the amount of computing power needed to run the overall ad ecosystem. It also cuts costs by opting out of relationships that don’t provide value as part of this change and opting in to relationships that simplify the digital campaign workflow (be that centralizing planning processes, consolidating reporting, or reconciling financial data). And side note: With new data privacy laws coming into play requiring a more detailed understanding of who has access to consumer data throughout the bid stream, there has never been a better time to conduct a partner review. Win-win-win.
So, the carbon footprint of digital advertising is growing, consumers are invested in it, and incorporating climate friendly initiatives into larger business goals turns out to be not just a moral imperative but also a financial one.
What’s the hold-up, then, when it comes to greater action across the industry?
It boils down to these reasons: A lack of standardization, a lack of regulation, a lack of urgency, and a lack of education. Marketers are many things—creative thinkers, performance forecasters, data analysts, investigative journalists, and idea generators, to name a handful—but they are not climate experts. Only 24% of marketers say their company has set targets to address the carbon cost of online ad campaigns, and a negligible number say they have already reached net zero. Clearly, there is ample room for progress. But until the industry collectively garners a greater understanding of the issues at hand and agrees on common measurement methodologies, change will likely continue at a glacial pace.
Fortunately, though, help is on the way in the form of new tools and initiatives:
Then there are the stories of big brands already making proactive moves:
Without many global benchmarks and standards for marketers to follow, it is these stories and these actions that are sparking the conversation. More are bound to follow as the benefits of adopting sustainable digital practices come increasingly into view. Could 2023 be the tipping point? Only time will tell.
Advertisers and consumers alike are waking up to the carbon cost of digital advertising. Brands are facing myriad challenges in 2023 (most notably planning for the cookieless future and keeping up with all the latest regulations), but sustainability shouldn’t be deprioritized in planning discussions. As marketers start or continue their journey to become more sustainable, it’s important to focus on efficiency as a route to achieving success, and embracing greener digital ad buying efforts and shoring up the supply path are great places to begin. Those that do so now can gain the early mover advantage and set themselves up to foster greater brand loyalty and cost savings down the road.
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Looking for more tips to kickstart your sustainability transformation? Check out our blog post that dives into all the do’s and don’ts for digital marketers when it comes to climate change and sustainability advertising.
The TikTok era of social advertising marches on.
Moving way beyond its roots as a forum for lip-syncing and dancing teens, this short-form video app has blown up the model of what a social network can be, and it is increasingly a must-buy for a growing number of advertisers. TikTok isn’t the same as Facebook, Instagram, Twitter, or YouTube, where advertising typically equates to buttoned-up and polished productions. 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, yet there is already much for media buyers to get excited about, particularly with TikTok’s next phase of ad growth enabling advertising both down the funnel and deeper into social commerce.
Of course, it’s not a channel without its share of troubles and controversies. Nearly three 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. US lawmakers on both sides of the aisle are renewing calls to remove it from US app stores, citing perceived risks to national security and user safety. As a result, TikTok has become a symbol of rising geopolitical tensions between the world’s two largest superpowers, and there is unlikely to be any resolution to this saga any time soon.
Nevertheless, 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. Let’s go.
It is, quite literally, a multi-billion-dollar question: just how did TikTok go from being a niche player just four years ago 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 (and 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 look set to 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 today’s youth is an expression of “individual truth”. They are also the first generation of online natives—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—and on their increasingly regular disappointing earnings calls. The app’s recent 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 already 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.
As of early 2023, rumblings about a possible TikTok ban in the US have grown from a whisper to a roar. 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), a House panel went a step further and voted to approve a measure that, if passed by Congress, would give President Joe Biden the power to remove TikTok in the US outright.
Feeling the metaphorical heat, TikTok has been offering a series of olive branches to regulators in an effort to cool the pressure—for example, providing more transparency into its famed algorithms and restructuring its US-based business operations. They don’t appear to have been particularly well-received, though, judging by the pummeling TikTok CEO Shou Zi Chew got from a congressional committee back in March. All said, TikTok is stuck between a rock and a hard place right now, and all the scrutiny it’s under may well stand in the way of its US growth and brand marketing ambitions. Only time will tell.
TikTok has become a digital advertising powerhouse seemingly overnight. Its consumer appeal and high engagement rates across numerous verticals make it a worthy option for ad spending at a time of economic uncertainty. 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 a significant challenge for brands. There’s also the threat of a ban to at least consider, and while nothing is likely to happen in the immediate future, marketers would be wise to start scenario planning and stay flexible with social ad buys so they can 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.
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Want to learn more about how to approach TikTok advertising? Check out our blog post, The Do’s and Don’ts of TikTok Marketing to get all the tips and tricks you need to succeed. Or, if you’re looking for more general advice about your media campaigns yet don’t know where to begin, our Media Strategy & Activation team can point you in the right direction.
Unless you’ve been doing nothing nowhere all at once for the past, say, 10 months or so, you know that artificial intelligence (AI) and automation have seized the marketing limelight.
Most of the current buzz centers around the potential business impact of new tools within the field of generative AI. But even before this boom, agencies and brands have been increasingly leaning into automation and AI technologies to unlock efficiencies and improve collaboration. One study found that 90% of marketers are using them to strengthen customer interactions, 89% are using them to enhance data integration, and 88% are using them to personalize the customer journey across channels. Other use cases include resolving customer identity, driving best offers in real-time, and bridging online and offline experiences. Indeed, marketing organizations today have so much disparate data at their fingertips and so many disparate systems to manage throughout any given campaign lifecycle that leveraging automated technologies to save time and cut costs is critical to unlocking success.
Automation and AI are spurring brands’ digital transformations, igniting conversations, and capturing headlines…but what exactly do we mean when we talk about “automation” and “AI”? The terms are often used interchangeably, but in order to make smart decisions about how to invest in them and grasp their possible impact, it’s important to know how they differ and where they fit into the marketing and advertising ecosystem. Here, we unpack all that, and more.
The sometimes-synonymous use of these terms stems from the fact that automation is a broad category encompassing an entire class of technologies that includes AI itself. In advertising parlance, however, there are some key distinctions to be made.
The automation umbrella refers to a type of software that follows pre-programmed rules—it substitutes human labor across the campaign workflow, tapping into patterns to perform tasks that are repetitive and predictable. In the process, it enables scale that is virtually impossible to achieve without it.
AI, on the other hand, describes software designed to simulate human thinking—it is, as the name suggests, intelligent. Predicting outcomes under conditions of uncertainty is one of the most challenging aspects of digital advertising, and AI platforms can be a powerful ally in that fight by dynamically identifying and analyzing situations and crafting conclusions.
Simply put: automation works with data, while AI understands data.
Digital advertisers use basic automation in an assortment of ways—for example, in leveraging programmatic media buying or eliminating incomplete or redundant lead information. But it can also help brands and agencies manage the myriad new channels and platforms that have caused media complexity to soar while sapping marketers’ time. Media buyers can use automation to simplify workflows and increase agility as they build out adaptable cross-channel experiences.
From streamlining planning processes, to optimizing ad spend in real-time, to centralizing all reporting, to reconciling financial data, automation can help marketing organizations tame the fragmented markets and accomplish things they never could with manual processes alone. And side note: this powerful technology can also enrich the employee experience by significantly reducing redundant and tedious tasks in favor of more meaningful, higher-level strategic work.
Let’s move on to the topic of the moment.
It seems like barely a day passes without some marketing-related story about AI hitting front pages and homepages. The constant flurry—or, rather, blizzard—of new tools to hit the mainstream is whipping up an industry-wide frenzy.
OpenAI’s DALL-E 2 got the ball rolling when it burst onto the scene in late 2022. ChatGPT came next, gaining a million users in its first five days and reaching 100 million within just two months (making it the fastest-growing web platform ever). And GPT-4 has kept the hype going (and growing)—a tool proving adept at solving logic puzzles, building websites from a notebook sketch, creating business plans, telling jokes, and even passing bar exams. It’s also the technology powering Microsoft’s Bing Chat (you know, the one that went a bit crazy).
Of course, Mountain View was never going to sit back and let Redmond enjoy all the attention, so Google too has launched an API for its own language learning model (LLM), PaLM, alongside a number of other enterprise AI tools that it says will enable businesses to generate text, images, code, videos, and audio from simple natural language prompts. This includes Bard, Google’s chatbot, which runs on the company’s Language Model for Dialogue Applications (also known as LaMDA).
Big picture-wise, this is all game-changing stuff in the world of marketing. These new LLMs have accelerated the adoption of AI, and it’s easy to see where the advertising applications of these tools fit in. Brands and agencies are already reportedly using it to draft creative assets and brainstorm strategically, help refine consumer messaging based on online shopping habits, map out new marketing touchpoints, and scale their existing operations to do more with less.
It’s important to remember, though, that AI consists of so much more than just generative AI. Many aspects of digital advertising already leverage the technology to facilitate things marketers use regularly—think machine learning, behavioral marketing, contextual targeting, dynamic pricing, bid shading, and digital assistants.
Of all those areas, contextual targeting is probably the most widely adopted. Just over half (53%) of brand and agency marketers are currently using it, with another 33% planning to do so in the near future. This is no surprise considering the end of third-party cookies looms on the horizon. Since it doesn’t rely upon the use of personal data, contextual targeting neatly sidesteps identity issues, making it a sound (and cheaper) option for advertisers in this new privacy-forward future. It also adds an additional layer of filtering for page quality, helping to boost brand safety by avoiding lower-quality content and pages that don’t align with desired standards.
All said, the various applications of AI offer many of the same benefits as automation: They enable marketing organizations to build more robust actions that are regulation-compliant, all at a magnitude that would be implausible without them.
If you’re not already leveraging automation and AI, start your journey by assessing the opportunity for your organization and establishing high-impact use cases. Laying out the capability and governance groundwork ahead of time is critical to implementing and utilizing the technology successfully.
Identify where you can find quick wins with the highest automation potential and then branch out. In parallel, develop a long-term vision for more comprehensive transformation that features automation and AI in your workflow and operating model.
We’re still in the early days of generative AI and marketers can already use it to help with creative processes. But—and this is a big but—you must tread carefully. While the cost-savings this technology offers may be tempting, especially in today’s economic climate, advertisers that use it could find themselves embroiled in legal battles. Create guidelines around when, where, and how your organization adopts AI and ensure AI-generated content is always vetted by a human with relevant subject matter expertise.
The use of automation and AI can feel threatening to many marketers. But at least right now, the technology is at a stage where it’s there to help them do their jobs better and quicker. And who doesn’t want that? Marketing leaders should make sure they’re engaging their employees about how they’re using it and address any associated concerns they may have.
Developments in AI are poised to disrupt our industry. Changes will likely come slowly at first, but it’s essential to keep a close eye on them. Early adopters are more likely to reap the benefits down the line and late movers may struggle to keep up. Start testing and gain the advantage of early learning.
Automation and AI each have sweeping definitions that encompass a variety of complex technologies. Both are already indispensable tools for driving the kinds of large-scale, personalized, omnichannel advertising experiences that today’s consumers demand. It’s by no means essential for every marketer to be an expert in both, but looking into the future of digital media, it’s clear that automation and AI will have an enormous impact on our industry.
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If you’re interested in learning more about how to incorporate automation and AI into your marketing but unsure of where to start, reach out to our Media Strategy & Activation Team. You can also check out AdTech Academy, which offers courses that cover an array of automation and AI-based topics, including algorithmic optimization, behavioral targeting, contextual targeting, machine learning optimization, programmatic advertising, and many others.
At the start of every year, digital marketing teams around the world draw up checklists of short- to medium-term challenges they must address in order to meet the moment successfully. The 2023 edition probably includes big-ticket action items like:
Of course, there are many moving targets on this list—the landscape changes, and new priorities emerge. However, there are certain challenges that remain ever-present, and those always-on initiatives are essential to driving brand awareness and customer acquisition.
Maximizing return on investment (ROI) from programmatic ad spend is one such example. It’s an enterprise that’s simultaneously crucial (given the ubiquity of the programmatic market) and complex (given the pace of evolution across the digital ecosystem).
Programmatic ad spending remains strong in the US, despite—or perhaps because of—macroeconomic headwinds. Indeed, the flexibility afforded by programmatic makes it a safer bet in times of uncertainty, as advertisers can quickly shift budgets and optimize spend toward channels, platforms, or formats that are delivering high returns without the headache of navigating cancellation terms. The medium is so pervasive today that it encompasses over 90% of US digital display ad spending and its share is expected to increase incrementally through 2023 and 2024. Programmatic also continues to gain traction in maturing channels including connected TV (CTV), digital out-of-home (DOOH), and podcasting, as well as more traditional channels like linear TV (more on all that later). Then there’s the added dynamics of retail media networks, around which programmatic advertisers are swirling with interest thanks to their treasure trove of first-party consumer data and closed-loop attribution.
Put it all together and it becomes clear that maximizing ROI on programmatic ad spend is a huge undertaking. It requires connecting the dots between different tech players in the supply chain, different point solutions, different pricing methodologies, and unstandardized metrics—that’s a lot of moving parts! Here, we’ll break down some of the complexities involved in driving programmatic performance, including definitions and formulas, important trends across the current programmatic landscape, and tactics marketers can implement to capitalize on programmatic’s potential.
Ready? Let’s dive in.
Programmatic ROI is exactly what it sounds like: it refers to the return on investment a company makes from its programmatic media buying initiatives. It can be calculated to show the payoff on programmatic spending holistically or it can be broken down in more granular terms—be it by channel (CTV, audio, native, etc.), device (smartphone, desktop, TV), ad type (video, non-video), campaign, creative, or even demographic and geographic data.
It’s pretty simple, really. And, also, really important to measure.
At a time when marketers are facing mounting pressure internally and externally—from boardrooms to justify spending and from consumers to deliver seamless personalized advertising experiences—it’s more critical than ever for marketing organizations to accurately track performance and identify where they are most effective. Embracing the use of ROI as a discipline can help build more robust and agile brands that are set up to cultivate meaningful long-term relationships with their audience. It’s marketing 101 in 2023.
Calculating ROI is done through a straightforward formula: subtracting the initial investment from its final value, dividing the resulting number by the cost of the investment, and finally, multiplying it by 100.
For example, let’s say a company spent $250k on a social campaign that generated $1 million in revenue. The number crunching would look like this:
Net income ($1 million – $250k = $750k) / Cost of investment ($250k) = 3. x 100 = 300%.
Obviously, the goal with any ROI-based project is to end up with as high a positive number as possible, but success is truly in the eye of the beholder. What constitutes a triumph depends on all manner of factors. Some companies also establish a threshold for ROI that considers risk tolerance and the cost of human resources, below which they may be hesitant to make investments.
It’s also worth noting that ROI doesn’t necessarily have to be financial in nature. Once marketing organizations have set up ways to track the dollar value of programmatic activities, there are also benefits to factoring softer metrics into the equation—think engagement on social media, ad impressions, new subscribers, video views, or website sessions. They all contribute to building brand awareness and establishing an active presence in the minds of consumers. When managed properly, these KPIs can help reduce the need for paid media in the first place, thus essentially driving higher ROI in the process.
Blink and you’ll miss something significant in the world of programmatic, such is the speed of its evolution and growth. Right now, programmatic accounts for 91.1% of total US digital ad spending, with marketers stateside forecast to spend $21.49 billion more on programmatic display ads than they did last year (a 16.9% jump). For context, that’s more than double the increase predicted in Canada, China, France, Germany, and the UK combined.
But where’s all that money going? How does it break down? And how is it being served? Let’s explore:
This is easier said than done, especially when a given campaign can span several channels and platforms that report against independent metrics. Brands today are using an average of 18 disparate data sources in their campaigns (up from 15 in 2022). And incredibly, only 14% of marketing organizations claim to have a complete 360-degree view of their customer base. Fourteen percent! Operating through disconnected silos leaves you susceptible to all kinds of issues from an operational and legal standpoint. It's also a drain on resources with media planners forced to spend a disproportionate amount of time trying to wrangle their data into a cohesive story. Gaining unfiltered visibility into your data at scale is truly transformative in the modern advertising climate—and maximally effective, consumer-centric advertising (and consequently better ROI) is next to impossible without it.
Once you have your data ducks in a row (or if they are already lined up nicely), be sure to actually use your analytics to understand your baseline potential and develop strategic hypotheses that can inform campaign execution. Learn as much as you can. Play with different scenarios. If your data reveals distinct clusters of consumers who derive different value and benefits from associating with your brand, apply that knowledge to the stories you’re telling across your programmatic media—that’s data-driven marketing. Then it’s all about testing. Programmatic makes it easy to swap out concepts. Experiment with copy, visuals, links, whatever, and narrow down what your audience is responding to. If there’s any doubt whether something is working, simply turn it off and observe the effects.
Regardless of how good your data is, how streamlined your measurement is, or how robust your targeting is, nothing can mitigate the shortcomings of ads displaying lackluster creative. Given how much digital media people consume on a daily basis (8 hours and 23 minutes’ worth, to be precise), simply “turning up” and exposing your brand or product is not enough. Your marketing must forge emotional connections with consumers and set you apart from all the noise. That means tailoring your messaging and design and creating specific stories for specific personas. It also calls for more collaborative ways of working between your media folks and creative teams—get together to discuss the finer details of audience segmentation and dive into the successes and failures of past performance. Your ads will become all the richer as a result.
Sure, programmatic is automation in action. So, by definition, if you’re executing media buys programmatically, you’re already actively embracing automation. But fully leveraging the potential of advertising automation extends to what happens behind the scenes, aka the platform(s) you use to activate and measure your campaigns. Programmatic is a complex beast, so it’s vital to utilize technology that simplifies some of the work for you and helps you stay nimble—be that by consolidating your workflow, using machine learning to optimize bid adjustments, or centralizing performance data. Those who do so can save time, cut costs, and focus on what matters: strategy and outcomes.
Time commitments aside, there are no drawbacks to regularly auditing your programmatic supply path. As the market collectively adjusts for a focus on privacy and the end of third-party cookies, advertisers and publishers are cutting out unnecessary intermediaries and opting out of relationships that don’t offer clear value as part of this sea change. New laws have also come into play requiring a more thorough understanding of who has access to consumer data throughout the bid stream, meaning there is no better time to conduct a review of your partners. A violation around data today can have serious repercussions—just ask Sephora and Kochava.
It’s a new day for marketers, and industry-wide transformations are reshaping how brands connect with consumers. Programmatic is just one cog in that machine, but it’s a powerful and dynamic one. Orchestrating performance across programmatic channels relies on a host of capabilities and processes, but for those willing to invest in them, better campaign ROI awaits.
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Looking for more programmatic content? You’re in the right place. We’ve got the top seven programmatic advertising trends to know for 2023. We’ve got everything you need to know about programmatic guaranteed. And we’ve also got a handy quiz that helps you identify which programmatic buying method is right for your organization (including all-in on in-housing, a hybrid approach, or outsourcing).
Native advertising: the veritable chameleon of the digital marketing world. It’s come a long way since its inception over a decade ago, evolving into an important strategic component of digital campaigns that can effectively connect brands with their audiences. Marketers find it powerful enough that US native display ad spending is forecast to reach $97.46 billion this year, accounting for nearly two-thirds of total display ad spending. Against all the disruption and recalibration across the digital marketing industry right now, native advertising shines through as a reliable and trusted way for brands to communicate their story. In fact, research shows that whether it’s building brand awareness or developing message association, native advertising is an effective tool in the marketing toolbox.
Here, we define what native advertising is and unpack what it looks like, how it can drive performance, and what the future holds for the medium.
At its most basic level, native advertising is a form of paid media that mimics the look, feel, and function of its editorial environment. In other words, unlike most standard display and banner ads, it fits in naturally alongside the original content on its host website without disrupting the user’s browsing experience—sometimes to the extent that consumers don’t even register they’re engaging with an ad.
Native advertising is most commonly deployed as paid “in-feed" posts on search engine results pages (SERPs) and on social networks such as Facebook, Twitter, and Instagram (among others). Indeed, seven out of every 10 native display ad dollars are spent on social networks, while, incidentally, 96.0% of all social network ad spending is native. But it also takes other forms: as “recommended content” typically found at the foot of news sites, or as more extravagant “branded content” that consumes entire webpages (and occasionally entire websites). Let’s dig deeper into these different formats:
In-feed native ads copy the layout (arrangement of elements) and the design (font, color, scheme, aesthetics, etc.) of the surrounding platform while simultaneously including visual cues informing the reader that it is a paid ad and not organic content. For instance:
Historically, when a consumer interacts with an in-feed ad, they will subsequently navigate to the advertiser’s website. But through the rise of technologies and spaces such as social commerce and retail media networks, brands can now enable users to shop and take action directly on many publishers’ sites, putting customers closer to the transaction point. As these systems evolve and mature, in-feed native ads could potentially assume even greater importance.
Content recommendation ads are delivered via widgets into the main hub of a publisher’s page or underneath or beside individual articles. These native ads don’t necessarily imitate the appearance of the editorial content neighboring them, and the majority will link off-site. Disclosure language for these units can be anything from “You might also like” or “Elsewhere from around the web”, to “You may have missed” or “Recommended for you”. If served via a third party, the technology provider may also include its name or logo to further indicate that content is not produced by the publisher, i.e., “Recommended by Outbrain” or “Recommended by Taboola”.
This type of native advertising goes beyond the initial ad by also incorporating written content and (sometimes elaborate) design work that takes the form of an article, blog post, vlog, infographic, or interactive webpage. This branch of native has grown to be quite lucrative in recent years, with many major news outlets opening their own in-house commercial teams specializing in producing multi-dimensional content on behalf of brands (think T Brand Studio at The New York Times or Brand Studio at The Washington Post).
This content lives on the publisher’s site but will typically feature multiple outbound links directing to the advertiser’s own pages. The key thing to note here is that branded content is created and produced through direct partnerships between an advertiser and a publisher, with their placement guaranteed based on a fixed pre-negotiated (and oftentimes premium) price.
For advertisers looking to scale their campaigns in a cost-effective way, programmatic native advertising offers great opportunities. By automatically serving ads in real-time through a demand side platform (DSP), advertisers can create better, richer, more relevant brand experiences for consumers across screens and devices. Advertisers simply need to provide an image, headline, description, and click-through URL. Then, depending on the form of the organic content on the site where the ad will be shown, the programmatic native platform used by the DSP will determine which of those elements to bring in.
Programmatic is so dominant in the native ecosystem today that it constitutes 96.4% of all native display ad spending—a number that is forecast to grow to 96.9% in 2024. Additionally, 63.1% of all programmatic display ad spending in 2023 will be native, though that share has been dropping for a few years as programmatic increasingly permeates newer, emerging channels such as connected TV (CTV), digital out-of-home (DOOH) and podcasting.
All said: the combination of native and programmatic is powerful, if not ubiquitous.
As adtech becomes more sophisticated, brands can leverage a host of creative native advertising formats to make a more compelling impression on consumers—going even beyond branded content. No longer are marketers restricted to the use of a single, static image: native ads can now incorporate animated GIFs, carousel ads, click-to-watch video ads, instant play video ads, and more. Advertisers can then pick and choose which style(s) best serves their message and potential customers.
For example, B2B brands looking to tell a story around a campaign to drive leads can create a click-to-watch video ad with an embedded CTA. Retail and e-commerce brands can use native carousel ads to showcase a collection of products (or multiple images of one product). And travel and tourism brands can create snazzy photo spreads or cinemagraphs to showcase the allure of a particular destination or travel experience. The possibilities are virtually endless!
What does the future hold for native advertising? Well, there is definitely change afoot.
The medium is still growing, but its share of total display plateaued in 2020 and 2021—largely because its fortunes are so intrinsically tied to those of social media, and there has been significant upheaval on that front of late. Marketers are increasingly redirecting dollars from social networks into other areas, such as CTV. To put the trend into context: native nonsocial ad spending grew 7.9% in 2022 and is predicted to grow 12.0% in 2023, while native social grew just 3.5% in 2022 and is predicted to grow 8.7% in 2023. Social platforms have dominated the native space for so long due to their audience targeting capabilities and array of available ad formats. Now, though, streaming and mobile channels are opening up new opportunities for native ads—with more inventory available via programmatic—and they are getting better at delivering results for marketers. Put it all together, and social doesn’t dominate native ad spend the way it once did.
Native advertising can be a dynamic addition to any marketing mix. By seamlessly and authentically integrating into consumers’ online browsing and shopping experiences, native ads are often able to achieve higher levels of engagement and brand recognition than other channels. From an advertising perspective, the core purpose of running native ads is to blend in with the content a user is already immersed in—it’s critical that the brand story is subtle and slight. There are also exciting innovations across the digital ecosystem that could expand native advertising’s reach and what it looks like.
Want more insights into how native reimagines consumer connection in meaningful and less disruptive ways? Check out our Native Advertising Guide.
Audio has always had the feel of an intimate medium, that trusted voice conversing directly with us one-to-one. But digital innovation has changed how we think of audio as an entertainment vehicle and overhauled how we engage with it every day.
Where once the only control we had over audio was changing the radio station or popping in a new tape or CD (or LP), digital audio now gives us seemingly endless choices right at our fingertips. People today are using digital audio to soundtrack their lives, flowing in and out of audio experiences that reflect who they are, what they’re doing, and how they’re feeling in the moment—whether it’s workout time, focus time, party time, bedtime, or downtime.
Perhaps no other channel offers authenticity, connection, and flexibility the way that audio does. And this, in a nutshell, is why brands are increasingly inserting themselves into the audio conversation. The emergence of audio as a mainstay in media plans, alongside developments within the space (including concepts like sonic branding and voice interactivity), is a top digital advertising trend to watch as we move through 2023. But what consumer listening habits can marketers tap into to drive performance? Just how effective are audio ads, really? (Hint: very.) And where exactly are consumers tuning in? (Hint: everywhere.) Here, we’ve compiled a collection of stats that answer all these questions and more, helping advertisers separate the signal from the static noise and craft audio strategies set up to make a buzz.
A perfect storm of circumstance and opportunity is propelling digital audio into the marketing spotlight. You have younger generations coming of age and placing higher importance on audio as they look to alleviate screen time. You have brands embracing the idea of advertising on a cost-effective channel where they can command share of voice (amongst many other benefits). And you have new technology making audio content in all its guises much more accessible and personalized. It’s a medium that has long been overlooked...until now.
Over the last couple of years, few stories in digital media have been more compelling than the rise of the podcast. After a blitz of spending and high-profile acquisitions, the podcast market appears to finally be slowing down, but the podcast advertising market is an entirely different story, with the medium still largely underleveraged and undervalued. Listenership is still rising, albeit more slowly, and technology continues to add more layers of contextual targeting and flexibility to podcast advertising, signaling more opportunities for brands on the horizon.
Cutting through the metaphorical noise has always been a major challenge for brands as they compete to connect with audiences, and that challenge keeps growing as attention spans shrink. In audio advertising, though, marketers have a powerful ally in the battle for engagement—an outlet that can dynamically link ideas and narratives to help create an emotional association between the brand’s message and the listener.
The streaming audio ecosystem is dominated by a few key brands. Spotify is the top dog in the market, one of the most widely used digital products in the US and a powerful presence in broader culture. But the likes of Apple Music, Amazon Music, YouTube, SiriusXM (parent company of Pandora), and iHeartMedia all retain a huge presence in digital audio. Fluctuating economic conditions and price increases at several streaming services (including Apple Music and YouTube Premium, with Spotify potentially joining them soon) are colliding to ease some of the breakneck growth from the past several years.
Digital audio is ubiquitous and unique. Playlists and podcasts are providing the soundtrack to peoples’ lives, and brands looking to build strong, lasting connections with their audiences must find ways to penetrate those spaces. The good news is that advertisers already have a plethora of tools at their disposal to develop strategies that lean into consumer listening habits—and when it comes to future innovation, there’s a lot to look forward to.
If these numbers are any indication, the audio advertising revolution is really only just getting started.
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Want more insights on the power and potential of this channel and how it can impact your media plan? Check out our Audio Advertising Guide.
2022 was a rocky year for social media. Economic headwinds and increasing consumer privacy demands collided with shifting user behavior and new and emerging players to upend the status quo. Apple’s App Tracking Transparency (ATT) policy also severely diminished social platforms’ targeting and measuring capabilities and, consequently, cut into their bottom lines. And all the while, rumbling in the background, regulatory pressure is building while a pair of Supreme Court cases could significantly affect the power and responsibilities of Big Tech behemoths.
All this has led to a great deal of media hyperbole around the so-called demise of social media in recent months. But as Mark Twain may have tweeted were he around today: “The reports of social media’s death are greatly exaggerated.” A whole generation of people don’t know of a world without social platforms, and crises or not, social still commands a quarter of US digital ad spend. But—and this is a big but—social media is undoubtedly evolving rapidly, making it harder and harder for advertisers to keep up and optimize their social budgets.
Fortunately, we’re here to help. Let’s dive into the latest from the worlds of Meta, TikTok, Twitter, Snapchat, and YouTube and consider how events unfolding today will impact the landscape tomorrow, including channel-specific perspective from Basis Technologies’ SVP of Paid Search & Social, Amy Rumpler:
As we begin 2023, Meta is no longer the titan of innovation it once was. Sixteen months after rebranding alongside Mark Zuckerberg’s gamble on the metaverse, Meta is facing mounting losses, declining revenues, staff reductions, growing competition, increased privacy-related investigations, and minimal consumer adoption of VR. To say it’s been a tough transitional year would be putting it lightly.
The silver lining for this social giant is that despite all those challenges, its ad business remains the envy of almost every other digital media company across the globe. Meta is expected to generate $51.34 billion in US ad revenue this year, a number that only Google can beat and one that dwarfs its social media counterparts. By all accounts, this is a huge moment for Meta, so every decision it makes will be closely scrutinized by analysists and advertisers alike. Starting with its plans for Facebook...
Facebook advertising—the foundation of Meta’s business today—is running aground. Ad revenues on the platform dropped by 8.5% in 2022 and are expected to fall another 1.2% in 2023. To try and right the metaphorical ship, Facebook is concentrating on areas of the app that are most resonating with users—namely, Groups and Reels. It introduced several enhancements to both features in the last quarter, all in a bid to spur more engagement within the platform and offer creators more ways to monetize their content. It’s a sensible move at a time when influencer marketing is in high demand across the social spectrum, but only time will tell if it can help Facebook correct its course.
Like its Meta sibling, Instagram is also working overtime to retain its creator community.After a series of missteps with creators and its commerce offerings, chief among them its decisions to eliminate its affiliate commerce program and remove the shopping tab from the main navigation bar, Instagram appears to be pivoting away from social commerce. Instead, it’s hunkering down and getting back to its key strength—advertising—while paying particular attention to incentivizing content creation and massively enhancing its Creator Marketplace. Instagram needs influencers to keep posting original material on the app to continue attracting new audiences, and these moves are designed to encourage just that.
Meta’s advertising power is the result of their massive reach, high user engagement, well-developed targeting capabilities and ad products, and ability to generate ROI. Historically, they’ve far outmatched the competition in nearly all areas (especially when you take into account the full ecosystem of Meta ad placements and the mature automated ad tools available through their network). Recent developments might mean a slowdown in ad revenue growth for Meta, but it’s still a safe bet for most advertisers, and no one is better positioned to pivot quickly than Meta. Yes, the door is open for other platforms to claim advertising share, but don’t expect Meta to lose their seat at the head of the table in 2023. - Amy Rumpler
A trendsetter and a trailblazer, TikTok is fundamentally changing the way consumers digest content. But there seems to be a double-edged narrative around the app these days.
On one side, this video-sharing juggernaut looks like it’s in a tremendous place—it coasted along relatively unscathed last year amidst the larger social media tumult and it’s fast becoming a pillar of many brands’ media plans. US ad revenues increased 139.9% in 2022 and are expected to grow a further 36.0% this year. User numbers are increasing, and average time spent with the app is also on the rise.
But then there’s the other side to this platform. TikTok’s ascension is not happening in a vacuum, and it’s currently facing scrutiny on multiple fronts. Areas of contention include its effect on young users, its management of data, its dissemination of misinformation, and the one that just won’t go away: its links to China. The biggest threat to TikTok’s US growth may very well be government legislation seeking to ban the app because of mounting security fears. In a bid to assuage those concerns, TikTok is playing the transparency card, proposing to give US officials some degree of oversight into its famed algorithms.
For now, these issues are unlikely to deter consumers and advertisers, but they’re certainly worth watching.
The challenges TikTok faces in 2023 are not new. Since its arrival on US soil, the app has lived in the shadow of all of the concerns mentioned, ever-present alongside any positive outcomes or mentions covered in the news. Advertisers and users, however, don’t seem to care. As things stand, the risks aren’t enough to outweigh the benefits for brands, and they certainly haven’t convinced young Americans to spend less time in the app or delete it altogether en masse. As long as users continue to embrace the app, so too will advertisers. 2023 should be a banner year for TikTok, with more new brands than ever before testing the platform, and spend from brands already investing in the app continues to rise in response to campaign success, new feature releases, and increasing comfort levels with creating TikTok-worthy ad content. - Amy Rumpler
Ah, Twitter! Where do we even begin?
Suffice it to say, Twitter’s future remains a source of constant speculation. It was only in October 2022 that Elon Musk took the reins following a tumultuous, protracted takeover saga, and ever since he’s been rewriting rules and loosening content moderation on what seems like a whim. He’s also laid off half the workforce, feuded publicly with Apple, overseen chaotic policy rollouts, and already promised to resign as CEO based on the results of a Twitter poll—and that’s barely scratching the surface.
Altogether, the unpredictability and radical changes are making stakeholders uncomfortable, and it’s scaring off Twitter’s main source of revenue: Advertisers. US ad spend on Twitter fell a massive 46% in November 2022 from a year earlier, and user numbers are also predicted to drop 6.2% in 2023 to 48.3 million.
Can Musk turn things around and make Twitter into a success? Who knows, but don’t expect the turmoil to end anytime soon. In its current state, it’s clear that many brands see Twitter as a risk not worth taking.
I’m not sure this is the horse I’d recommend betting on in the race for 2023 ad dollars, even with high-stakes odds on the table. Without a clear vision for the future, a conceivable plan for shorter-term advertiser support, or glaring advantages in ad cost compared to results produced, most advertisers will continue to steer clear of Twitter in 2023. There are just too many more compelling options available elsewhere. That said: as long as users continue to rely on Twitter for up-to-the-minute news and information, some brands (maybe challenger brands, for example, or those in emerging verticals) will still be willing to invest. - Amy Rumpler
On to Snapchat—the one-time darling of the ad industry that’s now facing an uphill battle to get its stagnating ads business back on track after a seriously shaky 2022.
The good news is that Snap CEO Evan Spiegel seems to have something that Meta and Twitter do not: a transparent and crystal-clear vision for the future. And that vision involves doubling down on its augmented reality capabilities as a differentiator.
The biggest challenge facing Snapchat over the years has been that brands have seen it as a non-essential player in the digital ad market—a platform without a firm identity and one that many advertisers have failed to fully appreciate. By paving this new course dedicated to AR, Snapchat can start to carve out a niche space for itself in 360-degree campaigns alongside the other major social channels. It’s also recently struck partnerships with a series of ad industry heavyweights (Disney, Adidas, Amazon, HBO Max, and Kroger, to name but five), a promising sign for the future. The fact that Snapchat can also act as a testing ground for metaverse-based activations may further work in its favor as brands look for soft entryways into that space.
Snapchat is a great play for the future-forward brand marketer who desires to be on the cutting edge of metaverse-applicable advertising. Of all of the partners poised to make a splash in a more or fully virtual environment, Snapchat is paving the way through their AR capabilities (which are still often copied by other platforms). If you’re looking to create fully immersive customer experiences, and can embrace the latest technological and creative applications to truly engage users in new ways, then Snapchat is the place to play. Whether this strategy will pay off in 2023 is speculative, but brands that are willing to go out on a limb with Snapchat today may very well end up ahead of the competition by embracing marketing strategies of tomorrow. - Amy Rumpler
As digital video consumption hits overdrive, YouTube is locked in battle on multiple fronts: Its ad business under attack from streaming platforms on one side, and social media rivalries with TikTok and Instagram on the other. The platform’s ad revenues are still projected to climb, though—9.6% this year to $8.06 billion before jumping another 14.2% in 2024—with an ever-increasing share of those dollars coming from connected TV.
This estimated growth comes as YouTube has been making some pretty big moves. In just the last six months, it has launched a dedicated page for podcasts, nudged itself into Amazon Prime Video and Roku’s market by offering streaming subscriptions, snagged the coveted NFL Sunday Ticket, and begun testing a new hub of free, ad-supported streaming channels. Put it all together and YouTube is looking to become a central video-fueled destination across various formats and genres, which should provide some exciting opportunities for advertisers.
Of all partners on this list, YouTube may be in the best position to capitalize on momentum in 2023 and beyond. They sit perfectly balanced between traditional and digital TV/streaming and social/engagement networks, allowing them all the advantages and ability to tap into upward trajectory trends of both sides of the advertising coin. Backed by Google data and dollars, and chock full of content that hits on a deeper level than what we tend to see on social networks, the appeal for both advertisers and users will remain undeniably strong. If YouTube isn’t part of your 2023 marketing strategy, I’d reconsider. - Amy Rumpler
The wild world of social media is undergoing deep, disruptive change, and there’s little evidence to suggest things will settle down anytime soon. For advertisers looking to chart a path through the chaos, staying agile and regularly revisiting the basics will be key, and that starts by making sure messaging is native to the medium and the target audience. Marketers that establish those firm foundations will be better positioned to weather social storms and pivot accordingly.
Looking for advice about how to get your social campaigns off the ground, but don’t know where to begin? Our Media Strategy & Activation team can point you in the right direction
As a media planner, several targeting tactics are available to you for every digital initiative you’re working on. Each programmatic campaign type brings its own unique set of challenges. Certain targeting strategies are more helpful against specific end goals and KPIs, but there’s one tactic that will always add to the overall performance of your digital program: retargeting.
Let’s kick off with the basics: What is retargeting, and why is it so crucial?
In broad strokes, retargeting is a form of online advertising that uses data to re-engage consumers who leave a website without converting and/or whose information you already have in your database. It empowers advertisers to create a series of customized touchpoints around the digital universe—be it via display, search, social, connected TV, or wherever—that are tailored to that one specific user, reminding them of products or services they once expressed an interest in.
When done right, retargeting campaigns can potentially serve a range of benefits, including:
So, how does it all work? It’s pretty simple, really. When someone ends up on a company’s website, an unobtrusive piece of code (often referred to as a tracking pixel) sends a string of text (otherwise known as a cookie) from a web server to the user’s browser. Then, when said user leaves the site to continue surfing the web, that cookie will sync with the company’s retargeting systems to serve up ads on other platforms based on the pages they visited on the website.
The classic example of this in action—and one we’ve all no doubt experienced—is when an ad for the exact product we just looked at, added to our virtual cart, and then abandoned suddenly, magically appears all over our social feeds. It’s a tried-and-true tactic, but a dramatically different operating landscape is on the horizon...
Yes, the elephant in the retargeting room: the impending deprecation of third-party cookies.
For years, third-party cookies have been the bedrock of retargeting, but they are slowly and surely fading from view. Last year, Google announced (yet again) that’s it’s delaying third-party cookie deprecation in its Chrome browser, this time until the second half of 2024. The event has been widely seen as the de facto deadline for the industry to shift to alternative targeting solutions. But, in reality, the volume of identifiers accessible to advertisers has already dropped significantly—by some 50 to 60% according to some estimates. In other words, this “cookieless future” everyone is talking about is already here.
Why, you ask? Here are just three of the reasons:
Add it all together, and marketers are now compelled to reimagine and overhaul their data, targeting, and retargeting strategies. Moving forward, it will be critical for advertisers to adopt new, privacy-friendly addressability and measurement solutions. The key here though is not to procrastinate. After all, the process of building, managing, and activating a stockpile of first-party data is long and complex, so there’s no time to waste!
Of course, there will be times when marketers may not be able to place a tracking pixel and capture specific visitor data. But that doesn’t mean there aren’t workarounds. With the right technology in the toolkit, there are still a number of ways to execute retargeting campaigns. Here are five:
A note here as well on FLEDGE (or First Locally-Executed Decision over Groups Experiment) API, a post-cookie advertising alternative in Google’s Privacy Sandbox dedicated specifically to the retargeting aspect of performance advertising. It works by storing information on users’ devices, as opposed to making it broadly accessible—the theory being that it protects user privacy by limiting the amount of data flowing around ad systems and bid streams. Early results have been, shall we say, mixed, and early adopters are in short supply. But those invested in cookieless retargeting strategies may want to keep an ear to the ground for updates on how the experiments progress.
Retargeting has the capacity to increase the effectiveness of other marketing efforts and raise brand awareness. It allows users who recognize your brand to see your ads all across the digital ecosystem—creating the impression of a large-scale advertising campaign, but for a fraction of the budget. And it’s a targeting tactic that increases brand recall and drives consumers down the sales funnel, allowing multiple opportunities for conversion.
By molding the online experience around consumers’ recent behavior, brands can stay top of mind with uses and re-engage someone who might otherwise have turned into “the one who got away.”
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Looking for advice about how to get your retargeting campaigns off the ground, but don’t know where to begin? Our Media Strategy & Activation team can point you in the right direction.
Digital advertising is recalibrating.
It seems like at every turn, there is something new, unpredictable and unfamiliar. Content platforms are adding commerce, and commerce platforms are adding content (and ads), all in an effort to boost revenue. Meanwhile, privacy enforcement is heating up, online platforms might lose essential legal protection, and consumer behavior continues to transform.
Amidst all that change, though, there is one reliable constant: programmatic, a medium that, at this point, touches pretty much every facet of digital marketing. Its penetration in digital display is forecast to reach a massive 91.1% in 2023 (up from 90.2% last year), and it’s growing in other maturing media formats, too—the likes of connected TV (CTV), digital out-of-home (DOOH), and digital audio.
Not that this is surprising. At a time when marketers are scrutinizing budgets and searching for operational efficiencies against economic headwinds and increased complexity, investing in programmatic makes perfect sense. And even despite the turbulence caused by the loss of the third-party identifiers upon which programmatic was built, the medium is standing its ground as advertisers embrace a raft of new, versatile, privacy-friendly targeting solutions.
By all indications, 2023 is set to be (yet another) dynamic year in programmatic advertising. Here, we’ll dive into seven programmatic trends to watch for and explore some of the ways advertisers can capitalize on those trends to power growth.
Our everyday lives are jampacked with technology—in 2022, the average US household was equipped with 22 connected devices—so it’s increasingly important for brands to serve up unified cross-channel experiences. Consumers today are watching TV while on their phones one minute, then listening to podcasts while working on their laptop the next—and they expect a seamless advertising experience across all of them.
Adjacent to that, brands have less and less time to win consumers’ attention. Gen Z and millennials, in particular, have grown up in the short-form video worlds of Snapchat, TikTok, and YouTube—they won’t hesitate to skip past content and ads that don’t engage them from the get-go.
All this is to say: marketers have it tough.
To combat the challenges and complexities, marketers will need to nail the fundamentals. Powering programmatic media performance entails complicated processes, so advertisers should look to evaluate whether they’re taking advantage of the resources already at their fingertips. That means stewarding budgets responsibly, investing in campaign planning, maintaining media hygiene, optimizing optimizations, and, critically, embracing technology that breaks down silos and accelerates digital media execution. Adopting a passive position in these areas will only expose marketing organizations to crisis and lead to strategies defined more by fire drills than brand values and needs.
The macro trend within the TV landscape is clear—streamers are slowly dethroning linear TV:
Consumers are increasingly tuning into the biggest screen in their homes digitally. And, in the fight for their time and wallets, streaming platforms have been busy—finalizing mergers, securing content rights, and rolling out ad-supported tiers in pursuit of subscriber growth and diversified revenue streams.
Amid these forays into the world of advertising, the streaming platforms are placing an emphasis on how they’re enabling ads via intentional partnerships (think Fox and Magnite, Netflix and Microsoft, Roku and Nielsen, and NBCUniversal + iSpot). This is creating consolidation across a complex ecosystem, unifying some of the fragmentation and opening opportunities to execute digital TV investments more cost-effectively—and programmatically. Indeed, in 2022, 74.4% of CTV ad dollars flowed through programmatic pipes, and that number is expected to rise to 78.6% by 2024.
The development of programmatic in CTV naturally depends on how the various streaming providers want to monetize their vision for ad-supported environments. But programmatic affords vastly more flexibility than upfront or scatter markets, so where there is inventory available, it should continue to gobble up market share.
There’s no question that digital audio is growing in importance, commanding an increasing share of our day and engaging audiences in ways few channels can. It’s an absorbing, emotional, and different experience—and one that drives results (75% brand recall rate, anyone?). It’s also got reams of untapped growth potential. Podcasting advertising alone is estimated to be undervalued by as much as $40 billion relative to other channels. Clearly, it’s time for advertisers to get involved in this opportunity.
The numbers around digital audio make for some compelling reading: Podcasts are projected to account for 5.1% of total time spent with digital media in 2023 (up from 4.7% in 2022). Music streaming has increased 27.5% from three years ago and averaged 1 hour 56 minutes in daily listening time in H1 2022. The penetration for digital audio is currently 78.5% of internet users. And that’s just scratching the surface.
The programmatic share of digital audio ad spending continues to deepen and is estimated to hit 23.2% this year. In times when audiences can be oversaturated with visual advertising, audio offers a great way to diversify programmatic budgets, evolve omnichannel strategies, and reach a highly targetable (and mobile) audience in a brand-safe environment. Those that embrace this medium as a soundboard for creativity and lean into expanding consumer listening habits will likely set themselves up to cut through some of the marketing noise in 2023 and beyond.
If you’re looking for innovation, you may want to get up and get out of the house.
Indeed, some 47% of US agency and ad execs think digital out-of-home (DOOH) is developing the most innovative ad opportunities, behind only social media and mobile. And with TV and radio audiences fragmenting under the force of digital, DOOH is helping advertisers fill the one-to-many void.
Traditionally, DOOH media owners have sold their inventory via time-limited packages that promise a minimum share of voice or number of playouts, essentially guaranteeing budgets per campaign. But as more and more screens pop up across cities worldwide, programmatic DOOH is prospering. Back in 2020, only 6.9% of DOOH ad spending in the US was transacted programmatically, but that share is forecast to rise to 22.6% this year, then 29.0% in 2024.
It’s quite profound growth, and it’s easy to understand the drivers behind it. By tapping into a range of real-time data such as live sports scores, weather fluctuations, traffic updates, or local in-store retail discounts, advertisers can create dynamic messaging and capture the attention of large, relevant audiences. Programmatic DOOH also opens the door to unique creative through full motion video, social media engagement, syncing and touch screen interactivity, augmented reality, QR codes, and more.
While undoubtedly a nascent medium, DOOH is gaining traction through its versatility and ability to successfully drive brand awareness—solidifying itself as a fixture in marketers’ omnichannel media mix.
Google may well have pushed back the deprecation of third-party cookies from Chrome until 2024, but advertisers should understand that between 50 and 60% of signal fidelity from third-party identifiers has already been lost through the actions of other platforms and browsers (such as Firefox, Safari, and Brave). In other words: we’re living in the cookieless future right now.
This, coupled with expanding regulations and stricter enforcement of existing data protection laws (eyes on you, Sephora and Kochava!), necessitates immediate privacy-forward action from stakeholders across the entire advertising ecosystem. Everyone has a role to play: Adtech itself needs to help activate tactics, consult on solutions, and facilitate partnerships; publishers must create a positive CX to empower quality data capture; and brands should be implementing compliance frameworks and advanced data management systems.
What does this mean for targeting and measurement in programmatic? In short: we’re still very much in the innovation and trial stage. New proposals are entering the market all the time and existing solutions that have taken a back seat for a while are garnering renewed attention (hello, contextual targeting!) Eventually, once publishers and advertisers have run their tests, the industry will likely coalesce around a small selection of agile and scalable options. But the point here is don’t sit around and wait for the problem to go away. The time to act is today!
Over the past two years, brands of all sorts have been launching retail media networks (RMNs), opening new real estate for ad placements and promising the proliferation of their privileged first-party data. The revenue success of Amazon has awoken others to the opportunity, with Walmart, Target, and Kroger getting particularly active in ramping their retail network and advertising capabilities. CVS, Walgreens, Dollar General, Ulta Beauty, Petco, eBay, Lowe’s, The Home Depot, Marriott, and Dick’s Sporting Goods (to name just a few) have also gotten into the game.
The growth of RMNs in the US could equate to $45.05 billion in ad spending in 2023, and the ripple effect of this evolution is significant. The ability to match unique customer IDs and ad impressions to SKU sales—all in a privacy-protected way—is compressing the marketing funnel and creating a paradigm shift in digital advertising not seen since...well, the rise of programmatic! All signs suggest the space is likely to scale, and with retailers inking deals with publishers, DSPs, and SSPs that want in on the action, the implications could be far-reaching across programmatic and beyond.
They’re still in their early days, but RMNs are certainly something to watch carefully and leverage accordingly.
It’s been a tumultuous time for social networks—so much so that The Atlantic recently questioned whether the age of social media is indeed ending. The growing levels of social ad spending would indicate not, but there are undoubtedly some interesting, shifting dynamics at play.
In 2022, we saw:
TikTok has been a shining light, but even this golden child of social media should watch its back with emerging competitors like BeReal gaining traction. The key to the future of social is essentially Gen Z—the changing of the social guard is founded upon this generation embracing a social experience rooted in more interaction, entertainment, and authentic communication. Sixty percent of US teens also report that feeling “welcome and safe” is more important than a space to speak freely online.
2023 will be a year for recalibration in social circles as the likes of Facebook, Instagram, and Twitter look for new ways to kick-start their businesses. Marketers should look to the younger cohorts for a glimpse into where they should be making sound social investments.
The advertising industry is poised to undergo a digital sea change in the year ahead. And the micro world of programmatic will be in the thick of it. Defining and reaching audiences, what those audiences care about, the channels and tactics employed, and how performance is measured—it’s all changing. Marketers who can stay agile and nail the basics will be in the best position to navigate all the headwinds the industry is running into, and perhaps even turn them into tailwinds!
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Want more tips and tricks to navigate the year ahead? Check out all our 2023 trends content designed to help you stay ahead of the curve.