By Phil Parrish on January 16th, 2018
Top 5 Programmatic Advertising
Trends to Prepare for in 2018
We have flipped the calendar to 2018 and it’s a great time to make yourself aware of key trends that will have an impact on the programmatic advertising industry over the next 12 months. Read on, arm yourself with more programmatic intelligence, and let’s get ready for a fruitful 2018.
This post features our top 5 predictions for the programmatic industry in 2018, but first, let’s take a step back and assess what happened in our industry in 2017.
2017 was another big year for brand advertisers, ad tech providers, and content publishers. In the U.S., advertisers invested about $36 billion in programmatic advertising, which grew by over $10 billion from 2016. Nearly 80% of all digital ad spend was purchased through automated programmatic channels.
Brand advertisers are investing more to reach consumers who continue to spend more time on digital devices. We saw the continued dominance of header bidding, and better ad tech integrations to make cross-device targeting a reality.
Programmatic media growth in 2017 did not come without obstacles. The industry expressed rising concerns about ad fraud, brand safety, and transparency. This pressure forced the industry to adopt a simple but effective solution of ads.txt so brands can avoid spoofed domains and illegitimate sellers of programmatic media. YouTube experienced an ad fiasco as brands began to boycott advertising on YouTube after learning that their ads appeared next to extremist content.
Despite these hurdles, programmatic is poised for aggressive growth and exciting opportunities for brands moving forward. To help you plan and prepare for the upcoming year, we have posted this article to provide data-driven insights and exciting new tactics that you can implement into your 2018 programmatic strategy. So, let’s dig in and explore our top 5 trends for 2018.
1. Rapid Growth of Connected TV / Advanced TV Advertising
In 2018, eMarketer estimates that over 180 million people in the US will use connected TVs at least once per month – a number that equates to more than 55% of U.S. households. With millions of consumers shifting from traditional cable providers to Smart TVs and Over-the-Top (OTT) devices to access their video content on demand, there’s a new way to reach your target audience on the big screen.
For brands looking to extend their audience reach further into this new digital realm, it’s more important than ever to incorporate the right CTV strategy into your media plan. With CTV/OTT providers offering more premium content, we expect available CTV inventory to increase, along with the emergence of new targeting and reporting capabilities in 2018. Take a look at the below chart published by AppNexus that outlines the top CTV devices used by U.S. consumers:
Despite the growth in CTV advertising, issues with scale and other logistical hurdles have limited brands from tapping into this powerful advertising channel. Early adopters are finding that pairing first and third-party data with CTV ads isn’t a simple plug-and-play execution. Furthermore, those hoping to benchmark CTV performance against standardized programmatic media metrics are finding that it’s a challenging task. With the future growth of this media channel, it’s more pivotal than ever to identify the right experts to manage your CTV campaigns to stay ahead of the competition.
2. Doubling Down on Transparency & Brand Safety Technology & Services
It probably comes as no surprise that transparency, brand safety, and ad fraud continues to be a key concern for brands investing in programmatic channels. Unauthorized sellers and fraudsters find new ways to siphon ad dollars, but what are we doing in the industry to improve transparency and brand safety?
In May 2017, The Interactive Advertising Bureau (IAB) introduced ads.txt with the mission of increasing transparency in the programmatic advertising ecosystem. Ads.txt verifies that a business is authorized to sell a publisher’s inventory, giving the publisher more control and assuring buyers they’re only buying from authorized sellers.
The next initiative to pick up steam in 2018 is the IAB’s upgrade to ads.txt known as ads.cert. Ads.cert goes a step further by validating the information that passes between buyer and seller through cryptographically signed bid requests. By validating the information that passes through each stage of the programmatic supply chain, ads.cert acts as a digital signature to stop fraudsters from tampering with, modifying, or gaming the inventory.
Aside from initiatives driven by the IAB, how can brands and agencies take more control over campaign management to increase transparency and brand safety? Below is our list of key steps to implement ASAP (if you aren’t already):
- Custom Whitelists: Through independent research and analysis of domain level performance across sites you are advertising on, create your own custom whitelists (or have an expert do this for you).
- Custom Blocklists: Similar research should be conducted to develop a blocklist of sites to stop ads from serving on. Make sure you avoid obscure, low quality, extremist, or fraudulent sites (based on historical data analysis) that may tarnish your brand image.
- Leverage your DSPs Blocklists: Does your preferred DSP provider develop custom blocklists? They should, and if they do, add these blocklists to your campaigns in addition to the custom blocklists you are developing internally.
- Licensing Brand Safety & Anti-Fraud Tools: Follow the free steps above, and then look to invest in ad tech providers like DoubleVerify, IAS, or Peer39 to block adult related, drug related, and other controversial site content and suspicious activity online.
3. More Programmatic Media Investments Shifting to Private Marketplaces
eMarketer projects that $19 billion in additional ad spend will enter the programmatic space between 2018 – 2020, and the majority will go to private setups, such as private marketplaces, programmatic direct transactions, and programmatic guaranteed deals.
Digiday estimates that as much as 74% of programmatic investments will go to private marketplace setups (we think this is a bit aggressive, but you get the point).
Though the emphasis on advertising quality and brand safety continues to grow, many brand advertisers do not have direct access to private marketplace platforms or they aren’t receiving the transparency and support they need to properly manage the myriad of ways to purchase ad inventory through private marketplaces.
Does your preferred DSP or agency have access to thousands of 1:1 direct private marketplace deals? For your direct publisher media buys, are you requesting that your vendors offer guaranteed inventory through deal IDs for better targeting and reporting?
It’s important to find the right team to plan and execute private marketplace campaigns, and to provide access to new private setups in Connected TV, digital audio, and eventually voice-activated channels like Amazon Alexa and Google Assistant.
4. Mobile Continues to Grow with Advanced Cross-device Targeting & Measurement
In 2018, mobile advertising is on pace to pass TV advertising as the leading advertising medium in the U.S., and it will represent nearly 34% of all advertising investments. As the fastest growing programmatic channel, nearly 8 in 10 mobile ads in the U.S. are purchased programmatically.
As mobile ad spend continues to grow, it’s important for brands and agencies to leverage mobile optimized web and in-app audience data, location-based targeting, and cross-device attribution to maximize performance in this powerful channel.
To prepare you for advanced mobile advertising capabilities, we have developed the following list of tactics to incorporate in your programmatic mobile strategy:
- Leverage video assets in mobile channels for brand engagement and to feed the top of your marketing funnel by driving traffic to your site.
- Develop innovative native formats including instant-play video, carousel, and scroll units to increase engagement, traffic, and on-site conversions.
- Test specialist mobile ad tech vendors like Factual or NinthDecimal to utilize latitude/longitude location data to reach audiences in real-time when they enter a specific geographic zone.
- Learn how to retarget mobile users who have recently visited your target location
- Reach users who have downloaded or installed specific mobile apps with ad tech firms like PushSpring.
- Close the reporting loop by learning how to track the uplift in foot traffic to a target location from mobile users who have been exposed to your programmatic campaign.
5. More Enterprise Brands will Bring Programmatic In-house
16% of brand marketers currently use an in-house programmatic buying group, and this percentage is expected to increase in 2018. Sprint created an in-house digital ad agency , and brands like Netflix, Allstate, and StubHub have made similar commitments to managing programmatic in-house.
Marketers who have been surveyed on their interests for bringing programmatic in-house have listed cost savings, quicker response times, and greater control over their campaign execution as the key drivers for these robust changes.
These same marketers have found that greater power brings greater responsibility. Many brands have planned to bring programmatic in-house but have failed in their pursuit after learning that it’s a massive undertaking. Consider the following criteria when developing your plan to bring programmatic in-house:
- Ad Tech Platform Integrations: Developing a full programmatic tech stack will take significant time and investment. A realistic time-frame to build your ad tech stack is 6-18 months.
- Staffing Resources: You need to plan for hiring and training your staff on programmatic technology and campaign management best practices. Some brands have used programmatic department heads while continuing to work with their agency of record to execute media buys, while others model the structure of a trading desk to manage strategy and execution end-to-end.
- Data Management: To manage programmatic campaigns effectively, a robust data management platform is a must. Collecting first-party data, importing CRM data, aggregating third-party data, and drawing actionable insights from all the data you are leveraging are all critical components of an effective data management strategy.
- Executive Approval & Continued Commitment: To state the obvious, programmatic is always evolving, and in-house teams need to be prepared for swift changes in technology, media channels, and ad formats (just to name a few). Marketing departments need management approval, the right systems, and exceptional talent that understands the landscape to have sustainable success.
If bringing programmatic in-house seems like a daunting initiative, you need to find the right partner to guide you through this process.
Our team is poised to help brands that are committed to success in programmatic advertising through the development of a differentiated strategy that will separate them from the competition. Whether you are looking to hire an agency to enhance your programmatic strategy and execution, or if you want to partner with a trusted team of experts to guide you on the journey for bringing programmatic in-house, please contact us to share your story so we can help to address your needs!