Five insights about the future of programmatic advertising

It’s no secret that digital marketing is in a constant state of flux. Let’s not forget that there are over 4.02 billion users on the internet in an ever-evolving time and industry.

Source: cooltechzone.com

Banner ads were a golden goose until people went banner blind. Facebook like-gating was a thing until organic reach plummeted 52%.

 

Source: Getcodeless.com

Today, the rapidly growing adoption of tools like AI, chatbots, geofencing using location QR codes, and machine learning are invading everything from our watches to refrigerators. The future of marketing is clearly leaning away from manual strategies.

Enter programmatic advertising, automating the ad-buying, and targeting process on the web. Today, with more readily-available data on every consumer than at any other time in history, brands are using this information to target extremely granular audiences across the web.

And with more of your online data being controlled by companies like Google and Facebook, more intrusive and targeted advertising options are available to advertisers.

It’s a double-edged sword for marketers. On the one hand, we have more tools at our disposal than ever before. On the other, how much information on our consumers is too much? When does it become unethical?

Is it okay for the President of the United States to spend up to two million dollars on anti-impeachment Facebook Ads?

Programmatic advertising is not new, but it has been kept on the back burner as many marketers focus on shinier objects, like Instagram stories links or the latest Google core update.

If you haven’t been paying attention, now is the time to take a deeper look at programmatic advertising and the trends that could impact its future.

Let’s get started.

Is the future of marketing programmatic?

According to eMarketer, programmatic ad spend made up $25.48 billion of the total digital ad spend in 2016, up from $17.5 billion in 2015. By the end of 2019, programmatic ad spend is expected to hit $45.72 billion.

 

Source: eMarketer

And by 2020, programmatic ad spend is expected to reach $68.87 billion. That is a growth rate of nearly 4x in just a few years.

If you haven’t used programmatic advertising, you might wonder what it looks like in the real world.

Let’s say, for example, software company HouseCallPro wants to attract more plumbers to use their home-service business software.

They might build a dedicated landing page for plumbers that uses language specifically targeting plumbing companies and the challenges they face.

They specifically mention growing your plumbing business, in this example below:

 

Source: Housecallpro.com

Then, they would hire a programmatic advertising platform to identify online users by looking at information such as income, gender, location, web sites visited, purchase history, and the devices they use.

For example, HouseCallPros could target people in Illinois who have visited the site Plumbing Perspective, which is a very plumbing popular industry site and have been searching for information about how to start a business.

They could also use anonymized purchase data collected by credit card companies to send targeted ads to Internet users who recently purchased a new home.

Using programmatic advertising and an ad exchange, they can adjust their ads to reach different demographics and optimize automatically.

The programmatic industry is growing fast, however, there are several trends that could impact the success and challenges marketers.

Dynamic personalization is taking personalization to a new level

Once upon a time, marketing was about the blanket approach. Tell as many people as possible about your brand, and inevitably enough people would make a purchase to keep you afloat.

That changed, of course. Most recently, brands have focused on personalization. Personalized emails, for example, increase transaction rates by six-fold.

Need ideas on how to speak to your audience in a language they connect with?

We found a Facebook case study that revealed Toyota saw a 440% engagement lift from featuring user-generated content in their Facebook Ads.

User-generated content is the easiest way to speak to your audience in their language. The content comes from them directly!

Check out how Eterneva, a company turning ashes into diamonds, does it by featuring customer testimonials from Google and Social Media.

 

Source: Eterneva.com

Dynamic personalization takes this strategy a step further.

In addition to using information such as user behavior and demographics, programmatic platforms can use third-party data such as the weather or time of day to create ads that, for example, advertise a breakfast sandwich during the morning hours and dinner recipe in the afternoon.

And, because programmatic advertising is automated, you don’t have to stop what you are doing to change an ad, programmatic advertising platforms can do it for you. This could make the personalization of ads easier than ever before.

Programmatic TV maybe the future of advertising, but with a catch

The average Super Bowl ad costs advertisers roughly $175,000 per second. This high cost is due to the number of expected viewers for the game, which is estimated to be well over 100 million people. Fair enough.

However, the television industry is on the cusp of a major shift. Networks are reporting a 14 percent drop in viewership in the last year and a 24 percent C3 drop in the past two years. In addition, the introduction of 5G may increase the number of people cutting traditional cable in favor of streaming services such as Hulu and Netflix.

Programmatic TV advertising may be the future.

Instead of paying to advertise their product during shows with the most viewers, programmatic advertising allows companies to send targeted ads to very specific audiences.

For example, advertisers can choose to advertise to women between the ages of 35 and 45 with middle school children in San Antonio or men under 35 who own Apple devices and make more than $75,000 a year. By targeting TV audiences more carefully, advertisers may be able to spend less to reach these audiences.

The catch, however, is that a rise in programmatic advertising may make it even harder for networks to sell traditional ad space. This may contribute to the downfall of an already struggling industry.

Voice search advertising?

“Hello Google, tell me about the history of voice search.”

I’m so glad you asked.

Google first launched its voice search feature in 2002, and the industry has been growing rapidly since. In fact, by 2020 an estimated 50% of all searches may be performed by voice.

What does this mean for advertisers?

Digital marketers have been wary of how voice search would change the digital marketing industry for years, but a recent change is making waves.

In April, Google announced Android users may begin to see ads in their voice search results.

In February, European digital ad exchange company Global signed a deal with voice-activated ads company Instreamatic.ai, designed to increase the availability of interactive audio ads in the US.

Programmatic voice search ads are in their infancy, but this shift could have an impact on strategies moving forward. This shift could make it easier to monetize your content marketing strategy through podcasts or video content.

Web scraping is for everyone, even machines

Web scraping has long been used by giants like Amazon to generate leads and to inform internet campaigns. The data they receive is often more accurate than purchasing contact lists and can even power social media campaigns.

As brands gain access to more information, consumers fight back via VPNs and the use of private internet settings. However, web scraping is still extremely popular. It used to be just for the big dogs, Amazon sellers, and people running ads.

Now web scraping can be used by any company.

Skincare company Proven, for example, uses machine learning and technology to develop tailored skincare solutions.

Founders Ming Zhao and Amy Yuan actually spent two years working on the company’s database before they even launched their company.

This could cause a few issues, as programmatic ad spends increases. For starters, bots scraping websites can result in slower site load times, which Google thinks is kind of a big deal.

Plus, as web scraping becomes far more accessible, it also becomes easier for sites to block. Amazon, for example, recently thwarted Walmart’s ability to scrape their site for pricing, leaving their technology team scratching their heads for weeks.

If more companies begin blocking bots, it could present a challenge for programmatic ad platforms.

Video ads are mostly programmatic

Nearly 45% of people watch at least one hour (or more) of video content every day. YouTube, the most popular video platform, receives more than one billion unique visitors every month.

Video is kind of a big deal.

What is even a bigger deal is that video advertising is also going programmatic, and by a lot. One stat says that nearly 75% of all video ads are programmatic.

This means if you want access to the vast video audience and haven’t jumped on the programmatic bandwagon, you’re behind the times.

Conclusion

Programmatic advertising may well be one of the fastest-growing segments of the digital marketing industry.

Despite how fast programmatic ad spend is growing, it faces one major obstacle—the quality of data. Although more of our data is being stored than ever before, there are still challenges.

Programmatic ads are only as good as the data they use. Compiling data from multiple sources and following users across platforms often results in both good and bad data.

For example, you and I may both love the show ‘Breaking Bad’, live in Texas, and be new homeowners – but that doesn’t mean that I need a new basement handyman service.

How much information is too much?

Data fraud, often caused by bots, may skew data results. In addition to the points mentioned above, learning to separate the good from the bad will be critical to the success of programmatic advertising.

Adam Enfroy is Affiliate Partnerships Manager at BigCommerce, and also does Content Marketing Consulting and Blogging at adamenfroy.com. He can be found on Twitter @AdamEnfroy.