- Privacy-friendly targeting and attribution
- CTV, video, and audio as ad spending generators
- Zerocoding platforms and outsourced talent
- To wrap it up
The year 2022 is just around the corner — it means that ad tech experts all over the world are making quick recaps while trying to craft their own versions of how the future of advertising will look like. Contrary to pessimistic predictions made earlier, in 2021 overall digital ad spending has increased by approximately 20%, and, despite pandemics, the ad market is poised to grow in the years to come.
As we are directly involved in the whirlpool of events — from ad tech solutions development to execution of ad campaigns and serving our clients, in this article, we'll share our own insights and observations regarding the subject. We’ve analyzed the global trends and matched them with our own experience to pinpoint the strongest ad tech trends of 2021 that will be echoing far beyond 2022.
Privacy-friendly targeting and attribution
During the last couple of years, the world moved towards privacy and user data protection more relentlessly than ever before. Google announced third-party Cookie shut down in Chrome, Apple restricted IDFA for tracking, and the international privacy regulations that came to the scene (like GDPR and CCPA, COPPA) kept changing advertising routines for many businesses worldwide.
Cookieless world and revival of contextual
In 2021 the advertising world prepares for the final cancellation of 3rd-party cookies (which will completely go to past by 2022). These changes have pushed the brands to revive their good old targeting practices that involved contextual ad placement. In such circumstances, advertisers and brands will keep investing certain shares of budgets into contextual targeting tools. These solutions or tools may be based on different technologies, however, the main idea behind their algorithm is to correctly identify the meaning of the web page and use this for ad targeting (instead of user data).
IDFA and Cookie alternatives: SkadNetwork, Unified ID, FLoC
As the world is looking for new ways to measure and attribute the users, new technologies emerge. One of such technologies is supposed to be SkadNetwork which will build the attribution and measurement based on the groups that users will be attributed to. The second most known alternative on the scene is an open-source non-commercial initiative called Unified ID, which, in the essence, is supposed to deliver the same cross-site targeting and attribution as third-party cookies (but with better control). The FLoC, meanwhile, will also be working based on cohorts which remove the need to process the data of every single user in particular.
Data alliances and first-party data
Privacy regulations were on the world's agenda for a while already causing many companies to review their data habits in an attempt to run away from fines. Coupled with the rest of the data restrictions, regulations created a new environment where companies and technology providers create alliances and associations to benefit from first-party data and use it to the fullest. In the new realities, the importance of collecting and utilizing the brand's own first-party data (through quizzes and games) will only grow because such data is unique and especially useful for direct-to-customer marketing campaigns.
We are standing on a threshold of historical transformations in ad tech which are triggered by the changing privacy legislative landscapes in many countries. These changes are challenging but crucial as they will encourage the creation of new advertising practices that are transparent, safe, and socially responsible. Recently SmartyAds joined the IAB Transparency and Consent Framework as a vendor which signifies our commitment to maintaining a transparent and privacy-oriented full-stack advertising ecosystem at all times.
CTV, video, and audio as ad spending generators
According to the statistics, the majority of advertisers allocated from 21 to 40% of their budgets into CTV in 2021. CTV/OTT remained one of the key programmatic growth areas over the last 12 months as demand for advertising on these mediums continues to rise. Video advertising and programmatic audio, meanwhile, are gaining momentum as most content is being streamed on these mediums.
Ad budgets go to CTV
Growing connected TV ad spending only in the US accounts for $13.41 billion in 2021, and, this is a 48% surge from the previous year. No wonder in 2022 CTV ad spending will hit $17 billion and by 2025 this number will climb to $28 billion. Meanwhile, programmatic ad spending on CTV surged to 53% (6.9 billion) in 2021. In 2022 this number will grow to 8.8 billion. The stats also indicate that programmatic CTV ad spend has doubled since 2019.
Video formats surge
In 2021 programmatic video spending has seen a 31.1% surge (reached $35 billion in the US). In 2022 video ad spending is projected to reach $43 billion. Pre-roll, super pre-roll, native ads, and OTT were among the most popular video ad formats in 2021. As the pandemic continues it drives more and more people to pay for video services. As a result, the revenues of OTT subscription services grew by approximately 29.9% in 2021.
Programmatic goes audio
Streaming audio platforms also help advertisers to deliver audio ads just to the right audiences and at the right time. With music, radio, and podcasts people enjoy their favorite content hands-free while brands have the opportunity to personalize their advertising experience with the right offers (avoiding ad blockers). Around 16% of all audio radio ads were purchased programmatically in 2021, in 2022 this figure will hit 21%.
Advertisers are actively investing their ad budgets into video, CTV, and audio - exactly across these channels, the traffic is surging as people continue to spend most of their time indoors during the pandemics. Immersive digital advertising formats that can be served across these channels, meanwhile, redefine user experience and bring in even better value exchange, engagement, and loyalty to the brand.
Zerocoding platforms and outsourced talent
The abovementioned privacy-related restrictions: Cookie shutdown, IDFA, legal regulations, etc., have pushed ad tech companies to invest more into identity solutions, new ad measurement technologies, and tools in 2021. The preparation phase goes bumpy but the market has already attracted more than $7 billion in terms of investments and funding when it comes to new advertising technologies. In the ever-changing realities, businesses try to act as quickly as possible and for this reason, they often adopt low-risk, zero-code prebuilt platforms that cut costs and simplify ad tech business entry.
Just like website building no longer requires a technical background the ad tech solution setup is getting increasingly simplified with white-label technologies. If previously only the largest players could afford in-house media-selling, today it is available to the broad category of companies thanks to the white label business models. Pre-built white-label tech core enables companies to deploy their own solutions in weeks while significantly cutting costs since a ready-made technology requires less labor and thus, fewer investments. With white label solutions, companies can utilize their own targeting mechanisms, build robust advertising strategies based on first-party data, and finally create their own unique and safe ad environments with proven partners onboard.
Brands prioritize client servicing
With easy-to-enter programmatic niche technologies advertising companies are becoming more and more technological, however, the main goal of this technologization is service improvement. The year 2021 showed a tremendous rise in support tickets from 6% in March of 2020 to over 90% as of August 2021. At the same time, newly-created businesses are hardly coping with a shortage of experienced ad tech employees. Meanwhile, advertising businesses that enter a new niche with programmatic technology often outstaff ad ops, account managers, and servicing teams as this way they resolve the problems of rare talent attraction and education.
Many companies today start their own technological products based on white-label solutions: DSPs, SSPs, Ad Exchanges. The others reinforce existing capacities with RTB, diverse partner integrations opportunities, formats, or ad serving options. At the same time, impeccable service is becoming the new norm in ad tech environment, it is a key point that can differentiate your solution from competitors. At SmartyAds we provide clients with white-label technology they can build their solutions on, still, we also give our clients a chance to focus on their main competencies while we select and right outsourced professionals for their team.
To wrap it up
Stirred by changing legislative privacy framework, overheated media consumption, and new ad tech business opportunities, the ad tech market rapidly reshapes. Some advertising channels become outdated, the others gain traction as advertisers are trying to redistribute their budgets towards those media that their audiences love most. These changes are challenging, yet they also bring in new unexplored opportunities. Advertisers still have yet another chance to diversify their media mix with cost-effective formats and channels. Plus, they can adopt privacy-friendly technologies and enter programmatic without tremendous investments, efforts, or barriers.
Iryna Sieliutina, Head of Content Strategy of SmartyAds