Programmatic advertising is expanding like never before. According to eMarketer, more than 88.2% of display ads in the United States will be purchased programmatically by 2022. Programmatic ads quickly become the main model for exchanging all forms of media.
However, it has a long way to go before solidifying its positions in emerging areas such as CTV, DOOH, and in-game advertising. AI and machine learning advancements are likely to strengthen the programmatic environment and open up new potential for targeting. Nonetheless, the sector is dealing with privacy, data collection, and fraud challenges. We have compiled a list of programmatic trends for 2022 that are already affecting the ad tech market.
Table of Contents
- Optimization of post-cookie data
- Omnichannel marketing
- Understanding of online privacy
- Targeting in context
- Voice-activated advertisements
- Machine learning
- 5G Boosts Programmatic Ads
- Advertising in-game
- Digital Out-Of-Home Ads
- Advertisements for OTT and CTV
- The Open Web vs. the Walled Garden
- Programmatic trends 2022 – Conclusion
The programmatic ads sector took a hit after Google declared that third-party cookies would be phased out by 2022. When Firefox revealed its plan to restrict third-party cookies last autumn, publishers and advertisers were instantly impacted. Buyers’ bid rates decreased by up to 40% in Germany, where this browser has a substantial market share, while publisher revenue also dropped dramatically.
We recently detailed how cookie deletion will affect marketers and publishers.
In any scenario, the industry will need to develop a viable user identification alternative in order to maintain revenue from digital ads.
People now own far more consumer electronics devices than in any preceding decade: a smartwatch, a smartphone, a tablet, and so on. Advertisers may target all of these devices by using an omnichannel strategy. Programmatic ad tech enables them to simplify ads while also customizing them for different devices.
An omnichannel approach enables advertisers to better track and predict client behavior and generate maximum conversations by serving the ad in the appropriate media and at the appropriate moment.
Understanding of online privacy
Privacy security has emerged as one of the most notable programmatic ad trends in recent years. As third-party data usage is phased out, many social media platforms must reconsider how they utilize and acquire client information. A boom in privacy regulations, such as Europe’s General Data Protection Regulation (GDPR) and California’s Consumer Privacy Act of 2018, is making it far more difficult to utilize tracking cookies to target and tailor ads based on consumers’ online behavior.
“CMOs require effective data rights management systems to ensure they do not lose their most important asset – data,” according to GDPR.
This new regulatory framework upends established ways of tracking user behavior while allowing advertisers to get user data with their permission. The data size may shrink, but the policy will improve the data quality in the long run.
Targeting in context
Contextual targeting has waned in recent years, with the help of cookies in favor of behavioral targeting. This strategy was widely used to collect user information without explicit agreement.
Nonetheless, GDPR and current browser battles have resulted in the rebirth of contextual advertising, which does not employ cookies and does not directly target users. Furthermore, recent breakthroughs in AI have improved the automatic content analysis of online sites. Before putting the ad, AI can now better understand the page’s content and intent.
We anticipate that the revival of contextual targeting will be one of the important advertising trends in 2022 and that it will be much more significant in 2023 as a result of the cancelation of third-party cookies. After all, it’s one of the few acceptable substitutes for cookies.
Voice-activated virtual assistants are making inroads into the advertising industry. Amazon sold more than 200 million Alexa-enabled gadgets last year, while Yandex claimed $55 million in income from its voice assistant Alisa. The great bulk of traffic is generated by voice-activated purchases of household goods, clothing, and video games.
Gartner expects that by 2022, 30% of web searches will be conducted using voice-activated devices rather than screens. Programmatic ads will play a significant role in integrating voice-activated ads into the broader advertising ecosystem. This will aid in optimizing ad spots in at-home smart devices with in-store ads, audio, and visual ads, as well as mapping the consumer path.
Artificial intelligence (AI) is driving the expansion of the programmatic advertising ecosystem. Machine learning can make sense of big data sets and detect complex patterns in user behavior. AI and ML can connect user data to look at metrics and recommend the best ad placement and structure. AI can assist in better identifying customer patterns, enhancing ad efficiency, and lowering acquisition costs.
According to a Deloitte survey of over 1,100 early adopters of AI, 82% of them saw a good ROI from AI projects. AI that can predict customer behavior with extraordinary accuracy is also gaining traction in programmatic advertising. When corporations employed Watson, IBM’s famed AI technology, to acquire ad spaces, the cost per click was cut by 71%.
The openness and accountability of resellers are becoming increasingly problematic in the ad tech industry. Damage from domain spoofing and other security vulnerabilities resulted in $19 billion in losses for marketers in 2018. According to Statista, a business data site, ad fraud losses will reach $81 billion by 2022 and $100 billion by 2023.
The industry is experimenting with several frameworks to address this flaw in the ecosystem. IBA advises publishers to use ads.txt, a file containing confirmed vendors of the publisher’s inventory. This enables marketers to detect unauthorized resellers and avoid fraud during the early phases of programmatic ad purchasing.
Ads.txt is presently only available for desktop traffic, but the IAB lab is also working on the mobile version. They are also working on scaling issues with the ads.txt protocol in order to make it more flexible for resellers. Aside from ads.txt, the IAB lab introduced sellers. JSON is a method that allows buyers to find direct vendors or middlemen in the sale of digital advertising spaces.
5G Boosts Programmatic Ads
The arrival of 5G internet will provide a big boost to programmatic advertising. With 100 times the bandwidth of 4G, it is ready to make processing power-intensive programmatic advertising a popular form of advertising. Advertisers will be able to access more channels at a faster rate. Display advertising will load faster and more conveniently for users.
The unparalleled 5G speed will eliminate lags and allow videos to buffer faster, making streaming a popular media channel. Furthermore, 5G will accelerate the expansion of in-app and in-game advertising and advertisements in wearables and smart home devices.
The year 2022 will mark the maturation of in-game advertising. In the industry, it is still a young and revolutionary field. Retargeting is unusual in gaming apps, despite the fact that it has a high ROI. In 2022, the oversaturated mobile gaming sector will most likely diversify its monetization sources and give in to programmatic advertising.
The introduction of 5G will undoubtedly increase the effectiveness of in-game advertising. The industry will create new criteria to determine game viewability, visual engagement, and brand recognition. The pricing structure for programmatic advertising has yet to be determined. The next step is to discover high-return premium in-game portions and adjust creative rules for genres.
Digital Out-Of-Home Ads
Traditional DOOH advertising will be transformed in the future by adding a digital component. When combined with the utilization of mobile location data, it has the potential to boost offline conversions. Trading outdoor ad spaces and gauging audience size based on foot traffic are no longer viable options.
Outdoor programmatic ads will enable targeted audience planning and ad buying while providing customers with the most relevant and seamless experience possible.
Smartwatches and other wearable devices are quickly becoming popular consumer items. In 2019, 305.2 million wearable devices were shipped globally, according to estimates. This amount is expected to rise to about 490 million by 2023.
Wearable devices currently collect data on health, lifestyle, location, and other factors. The presence of this data enables advertisers to target the most qualified prospects in the most appropriate area, at the right moment, and with the most appropriate message.
The audience is becoming wiser and more demanding as the web matures. Advertisers are finding it increasingly difficult to reach out to prospective customers without effective audience management, segmentation, targeted targeting, and highly personalized ads. This is where programmatic advertising may help.
Advertisers can use programmatic ad technologies to measure and alter the effectiveness of their creatives in real time. Advertisers can use dynamic ad creatives to tailor their advertising and offer highly targeted messages.
Because of the wealth of data and AI-based predictive modeling, programmatic messages may adapt to certain demographics, device kinds, locations, and time.
Advertisements for OTT and CTV
Here, we are talking about advertisements for over-the-top (OTT) and connected television (CTV). The OTT and CTV ad market development has been one of the most talked-about programmatic ad movements in recent years.
According to eMarketer, there are presently 200 million CTV subscribers, with a projected increase to 204.1 million by 2022. Streaming services like Netflix, Hulu, and Amazon Prime are gaining popularity and capitalizing on OTT advertising. Furthermore, in November 2019, Disney introduced its streaming service Disney Plus, further bolstering the business and pushing traditional television to the backburner.
According to the PwC analysis, programmatic TV will account for around one-third of worldwide TV ad revenue in 2022.
Programmatic advertising continues to provide significant revenue for SoundCloud, Google, and Pandora.
Spotify is expanding its programmatic advertising capabilities. In 2018, they recorded a 94% increase in income. Podcasts are also developing a name for themselves in the market. Advertising revenue on podcasts in the United States surpassed $1 billion, a 53% increase over 2017 (According to the 2021 Podcast Revenue Report).
We have already discussed how digital audio advertising works and how it can be supplemented with a display ad.
The Open Web vs. the Walled Garden
It appears that the public’s fascination with walled gardens, a closed environment in which all operations are regulated by the ecosystem operator, is coming to an end (i.e., major tech corporations). According to an OpenX poll, consumers spend more time on the open web than on Instagram, YouTube, Facebook, and Amazon. Longer sessions and more browsing sessions each day are examples of this. Moreover, a third of people say they use Facebook and YouTube less than they did a year ago. The main reason is a lack of relevant and entertaining material.
Unlike walled gardens such as Facebook, Instagram, YouTube, and Amazon, consumers are more likely to find relevant ads that have an impact on the open web.
Programmatic trends 2022 – Conclusion
The ad tech business will undoubtedly profit from the programmatic ads trends mentioned in this article – advances in AI technology, improved personalization, and behavioral targeting will soon become a cornerstone of digital advertising.
Programmatic is extending into emerging media formats, such as CTV, DOOH, and Digital Audio. At the same time, the industry is dealing with privacy and data gathering challenges. It must adjust to new restrictions as well as migrate to the post-cookie model.