What Does the Future of Programmatic Advertising Look Like?

While advertising as a whole has taken a battering as a result of the pandemic, it’s not been the same story for programmatic media buying. This section of the industry has actually seen an increase, as was demonstrated by IAB Europe’s Attitudes to Programmatic Advertising Report 2020. It found that the proportion of advertisers spending more than 41% of their display budget via programmatic channels had jumped from 55% in 2019 to 77% in 2020.

As an area that’s evidently growing, what does the future of programmatic advertising look like?

Growing level of expertise

It used to be that programmatic capabilities were mainly tended to by in-house or agency staff, but the desire for increased visibility and control means a shift towards those with a specific skill set. In fact, this is already starting to happen, as the IAB report showed that keeping programmatic in house fell from 38% in 2019 to 20% in 2020.

What’s being seen in the short term is a hybrid model, with in-house staff working with agencies and programmatic experts for maximum benefit. This allows for the right infrastructure to be put in place and an appropriate level of support to achieve ever-evolving goals.

Supply path optimization

Buyers must understand what they’re purchasing and optimize it to ensure they’re not using multiple partners to buy the same inventory. The goal of building a fit-for-purpose, transparent programmatic set-up must be shared by the brand and the publisher in order to create the best ad experience for the customer.

Connected TV

After the success of advertising via digital video, the logical next step for programmatic is connected TV (CTV). The potential to deliver targeted ads on smart TVs will be a big step forward, as these devices that are central to most people’s homes have only ever been used for broadcasting. While digital-first organizations are keen to utilize this opportunity, traditional media companies are more reticent.

It’s starting to take hold in the US, but is coming up against a number of challenges in Europe. These include finding solutions at scale, limitations in technology and broadcasters not wishing to open up their inventory to the big tech companies. Change is coming, however, and network agency groups have started to work with independent technology partners to explore the potential.

Personalization

Personalization is the answer to ad fatigue, which sees consumers bombarded with adverts on multiple channels and even shown the same ad over and over again. Taking the age, location, preferences and habits of consumers into context allows marketers to cut through all of the noise created by irrelevant ads. Using programmatic advertising to achieve this won't only improve a brand’s ROI, but see a smoother, frictionless customer journey.

First-party data

The use of first-party data is going to be vital for digital advertising going forward, as it’s integrated into ad platforms and machine learning models. Without it, businesses will find they lose their competitive edge, lack a basis for targeting their audience, don’t have the grounding for look-alike prospecting and find it difficult to make customer behavior and lifetime value predictions.

FLoC

Like any feature rolled out by Google, The Federated Learning of Cohorts (FLoC) is set to be a game changer. This new approach to delivering and measuring ads via the Chrome browser is being hyped as a promising replacement for third-party cookies and will begin testing later this year.

FLoC will have privacy at its core work by grouping large numbers of users together based on their interests. Accounts will be anonymized and user information processed on their device in a move that prevents it from being sent across the web. This process will enable advertisers to deliver more relevant ads to individuals while moving away from the cookie model.