Programmatic advertising is firmly on the path to becoming the default framework for digital media buying. Even when the world has had to press a large pandemic-shaped reset button, the medium has proven flexible and effective enough to continue asserting its profound dominance over the landscape.
Back in early 2020, facing a wholly unfamiliar reality, marketers were forced to scramble as they sought to determine what mechanisms would most effectively support their advertising efforts in the “new normal.” While programmatic ad spending was initially hit hard because brands could simply pause campaigns instantaneously, it rebounded quickly to continue growing at double-digit rates year-over-year. In 2022, eMarketer predicts that a shade more than 90% of digital display ad dollars will be transacted programmatically, with the dollar volume of programmatic display close to doubling the 2019 figure ($115 billion and $61 billion respectively).
These are not insignificant milestones and point to the fact that opportunities for expansion and refinement within the programmatic sector still abound despite its prevalence and popularity. With connected TV (CTV) adoption showing no signs of slowing down, the digital out of home (DOOH) market back and booming, and the use of audio platforms rising rapidly, advertisers are awash with new programmatic inventory to better connect with their audiences.
Naturally, venturing into these emerging forums will present novel technical and strategic challenges, ones that will sit alongside broader industry goings-on—most notably those pertaining to the impending deprecation of third-party cookies and the growing prioritization of consumer privacy. To help marketers strategize and structure their organizations to embrace the next stage of programmatic evolution more effectively, we’ve compiled a list of the latest trends within the space that point to where 2022 priorities ought to lie.
With the removal of third-party cookies from Chrome lingering just over the horizon, 2022 will be a make-or-break year for the development of new identifiers and technologies that can either reimagine the concept of tracking codes or replace them entirely. This is very much a watershed moment for the advertising industry—one in which organizations must seize the opportunity to become more transparent with their audiences. It is vital that new identity solutions put consumers in the driving seat and empower them to control how, when, and where their data is used.
These changes, of course, do not need to incite any panic. The end of targeted campaigns is not upon us. Programmatic advertising—even in the absence of many once-relied-upon persistent IDs—will continue to give media buyers access to publishers and placements, with contextual targeting likely re-emerging as an integral piece of the puzzle.
There is actually a huge opportunity here for savvy brands to deepen their relationships with consumers in ways cookie-based tactics never truly allowed. Recent research by Deloitte Digital exploring emotion-driven engagement revealed consumers prefer contextually sensitive brand experiences since they tap into their more immediate concerns, rather than over-relying on past behavior or browsing habits. By embracing the use of contextual data in programmatic campaigns, marketers can foster meaningful connections with consumers that inspire and frame the depth of brand loyalty and brand advocacy.
A mere decade ago, only a handful of brands were managing their own programmatic ad buying. Today, however, the story is considerably different. A 2020 IAB report dissecting the general state of programmatic found more than two-thirds (69%) of marketing organizations globally have partially or fully brought their programmatic campaigns in-house in a bid to remove the medium’s black box aura.
The primary driver behind this trend is a desire among brands to strengthen consumer bonds and control first-party data and operational functionalities that relate to both legal and regulatory compliance. In other words, advertising teams want increased transparency into the buying process. At a time when consumer sentiment changes like the wind, media buyers must be closer to the action with direct access to the raw, real-time data they need to react in the moment, create relevant content at a faster clip, and run off-the-cuff A/B testing. In-housing programmatic comes with other benefits, too, not least monetary savings and resource efficiency. By cutting out managed service fees and eliminating associated data consolidation and integration costs, advertisers have more dollars to throw at campaigns and more time to optimize strategies. The end result: greater ROI.
The process is not all rosy, though: it can often be many years in the making and extremely complex, involving much more than just a deal with a DSP provider. Business leaders need to think about the set-up, change management, data centralization, tools, and talent (which is scarce). You can learn more about the nuances associated with this subject here.
With the worlds of TV and digital gradually coming together over time, more and more consumers have chosen to unplug from traditional linear TV options and embrace online streaming—a move that’s fueled the connected TV phenomenon. Then, as the pandemic gripped the world and forced people to spend more time at home, the media landscape was set perfectly for CTV adoption to soar to new heights and, now, what was once a “nice-to-have” programmatic channel is unequivocally a “need-to-have."
Programmatic's penetration of the CTV arena reached a massive 70% in 2021 and it is expected to surpass 78% by 2023. However, while there is undoubtedly momentum here, there are still some obstacles to further growth. Unlike, say, mobile app advertising, where the vast majority of inventory is available within just two operating systems—iOS and Android—the CTV space is infinitely more fragmented in terms of different devices and providers where an ad could be displayed. Think streaming sticks (Apple TV, Fire TV, Chromecast, Roku, Android TV), games consoles (PlayStation, Xbox), and Smart TV devices (Samsung, LG, and other manufacturers), each of which have distinct standards and advertising capabilities. In 2022 and beyond, programmatic CTV has huge potential, but to maximize campaign success, advertisers must carefully consider where they are serving their ads and which devices to embrace.
Following what has been a challenging period for the medium, digital out of home is spiking again as advertisers search for creative ways to target consumers who are back on the go. US DOOH spending will reach $2.58 billion in 2022, and with more and more digital advertising screens dotting cities across the country (and the world), programmatic looks poised to take an even a bigger slice of that pie in the future.
The appeal of investing in programmatic DOOH ads is multi-faceted. First, they offer the obvious benefits of wide reach, being impervious to ad blockers, and dwelling in non-invasive environments. And second—and perhaps more importantly—this media newcomer should be a major beneficiary of the cookieless future due to its alternative means of audience targeting and the opportunity it presents for contextual marketing to come to the fore. To put it another way, PDOOH is not executed on a one-to-one basis, yet rather one-to-many. Brands employing this technology can tap into fluctuating societal, cultural, and environmental trends in real-time, and reach consumers en masse with relevant ads as they navigate their daily journeys.
It also opens up new creative opportunities, great examples of which include when Renault bought OOH inventory to promote its latest electric car whenever air quality dropped below accepted levels, or when Flonase ran DOOH campaigns anytime pollen levels rose in target areas. Brands that adopt PDOOH have an opportunity to create meaningful, head-turning experiences that leave a marked impression on consumers. There is no doubt that this channel is emerging as a compelling disruptor to brands and advertisers looking to develop their presence during uncertain times.
After a decade that’s been dominated by visual media, audio advertising has surfaced as an important outlet for brands. It is a channel that empowers marketers to evolve their omnichannel strategies naturally through its capacity to reach highly targetable and mobile audiences in brand-safe ecosystems where screens are removed from the equation.
In recent years, fatigue from spending too much time glued to our smartphones has become real. More than half of millennials and Gen Z—the holy grail of advertising demographics—say audio represents a welcome escape from too much ongoing ocular bombardment. These sentiments have become tangible as well, with eMarketer predicting that, per day, listeners will spend 97 minutes with digital audio—nearly a half-hour more than the average user will spend on social media (70 minutes). Unlike their visual equivalents, audio ads are served one at a time in places where consumers are not typically connected to a screen—be that listening to a podcast during their commute, listening to a playlist during a workout session, or unwinding with Pandora after dinner. In essence, audio ads are both unique and highly valuable as they offer premium environments and an effective way to fill otherwise untouchable voids in the user’s buying journey.
Beyond that, programmatic audio offers remarkable granular targeting capabilities. Media buyers can tap into a range of advanced audience segmentation parameters, including location, point of interest, device, weather, user, agent, format, genre, day parting, mood, and more. Through this channel, the ability to engage a user in the right place, at the right time, and within the right context becomes just that bit more accessible.
Compelling, insightful, captivating creative is one of the foundational pillars of effective advertising, but, for a host of reasons, this age-old connection has been badly severed. Unprecedented technological advancements over the last 10 years have led many advertisers to shift focus toward media optimization as opposed to creative optimization: smarter targeting, omnichannel expansion, algorithm hacks, and evermore granular reporting have all become top priorities... often leaving creative behind as an unfortunate casualty.
It is an approach that has bred general content erosion and brand dilution. Without any creative spark, performance ceilings become much lower, and regardless of how good advertisers are at maximizing media outcomes, they will never be able to mitigate the shortcomings of ads exhibiting underwhelming creative. This is particularly pertinent with the cookieless future looming. The digital marketing industry as a collective must now reappraise all the levers that contribute to driving results and no area is riper for improvement than creative delivery.
This is not to say advertising teams should constantly be creating new swathes of creative concepts. Instead, they should focus on building a library of assets and then tweak and refine them depending on the nuances of their targeting strategy. By generating a high volume of creative iterations, programmatic marketers can better react to market changes, tailor their messaging for audience personalization, and A/B test on every channel they are invested in. They will essentially be able to stay one step ahead of the competition.
Advertisers today must navigate an ethical minefield on a permanent basis. While programmatic brings untold opportunities to the table, it also presents some perpetually evolving challenges—namely ad fraud, concerns around brand safety, and ads appearing in disreputable contexts.
Consider these statistics from a 2020 survey by the Brand Safety Institute:
What these numbers highlight is the value consumers now place on how and where brands intersect with society. As such, it is more important than ever that digital messages appear in safe, trustworthy, and suitable environments—not just to avoid risk, but also to effectively reach the right audiences. Ultimately, this is a call to action from consumers: “Be proactive about where you put your ads, or we’ll take our business elsewhere.”
The fact that this phenomenon is actually influencing buying decisions has pushed it to the top of the marketing priority queue. The industry has made tremendous improvements in this area over the last two years, with top DSPs integrating brand safety mechanisms into their platforms, but agencies and brands must continue to be scrupulous in their programmatic media planning to ensure brand suitability is upheld day in, day out.
If 2020 was marked by uncertainty and 2021 was all about the rebound, 2022 is the year programmatic marketers can return to focusing on growth initiatives and begin capitalizing on the opportunities that have sprung from the pandemic—specifically, the rise of connected TV, digital out of home, and audio advertising. Now is the time for advertisers to stare down the challenges they face and implement media solutions that are going to really move the metaphorical needle.
If you’re looking to level up your programmatic game, check our Programmatic Readiness Guide, which breaks down the barriers to success with the medium.