Updated: Mar 13, 2018
Programmatic buying has increasingly taken center stage — and for good reason. Magna Global forecast that spend on programmatic advertising this year will increase 52% to $21 billion globally. This upward trend is affecting to brands of all industries and sizes, some of which are decreasing spend on traditional TV advertising in favor of a larger digital strategy. In fact, Forrester estimated that U.S. advertisers spend on digital advertising will overtake TV in 2016.
With all this transition away from traditional advertising models, what does this mean for the digital advertising industry in 2015 and beyond?
1. 2015 Will Mark the Rise of the “Meta DSP.”
In September, Havas announced its new ‘Meta DSP’ model — the world’s first. This trend of working with multiple programmatic partners will become increasingly popular in 2015. Brands and agencies will realize they can’t single-source a programmatic partner. One provider will likely not have the ability to satisfy every campaign need.
Each DSP has strengths for specific industries, verticals or audiences. One might specialize in QSR or travel, while another might specialize in luxury brands. In 2015, advertisers will be more open to executing their strategy through multiple partners in order to capitalize on the skills of each.
2. 2015 Will Not Be The “Year of Mobile.”
What might come at odds with the predictions of others, 2015 will not be the “year of mobile.” Brands and agencies are seeking effective strategies across all consumer devices—ones that can span across platforms including display, tablet, mobile, connected TV and more. Brands want holistic omni-device targeting, and mobile-only won’t move the needle.
A mobile-only approach lacks an effective means for tracking impression and conversion flow in the same way that desktop providers offer. While impressions may be easily gauged on mobile, conversion is much harder to track; many consumers still prefer to complete transactions on desktop or in-store. This disconnect is part of the reason that successful omni-device targeting is so important to gauging the success and ROI of integrated campaigns.
3. Programmatic Native Will Become Practical.
Two things will be needed for programmatic native to take off: Publishers who develop native layouts, and advertiser platforms that adapt their creative assets to match those layouts.
There are plenty of systems with the fundamental functionality for adapting creative assets to a layout. Dynamic ad servers have been doing this for years. For example, mobile ad servers adapt to screen size, and retargeting ad servers adapt by inserting components from a catalog.
For native to become practical, publishers will need to make their native layouts generally available. Some publishers have done this by working directly with the few advertiser platforms that are ready to use them. The results are tremendous from all points of view; publishers supporting programmatic native are reaping high CPMs. Additionally, advertisers are driving huge lift in engagement and response, and the early adopting platforms are collecting healthy margins. Programmatic native cannot help but attract more players on both sides, so we predict that the game will be on in 2015.
4. 2015 Will Lead to The Demise Of Old School Ad Networks.
In 2015 publishers will finally understand that there is a greater opportunity for ROI working with a smart programmatic partner, rather than a traditional ad network.
Ad networks often sell at a lower eCPM to close high-volume sales. Ad exchanges, in contrast, now contain premium inventory, and many brands are bidding to purchase impressions through these exchanges. As programmatic advances, inventory quality on open exchanges increasingly matches direct buy deals, and programmatic providers’ optimization techniques allow them to purchase the right placement, at the right time, at the lowest cost possible, thereby reaching the best consumers in the proper context.
If some of these trends sound familiar, that’s because several have been a focus in recent years. However, the math behind getting the data on individual users has evolved immensely and is influencing how brands and agencies view programmatic partners. Advertising technology companies will spend the next year honing the science and math behind their technology, in order to reach the place where ad tech derives the most impact—the ability to engage with consumers on a 1:1 scale.