The Future of Digital Advertising: 5 Transformations to Expect in 2020
As the year 2020 approaches, marketers anticipate several changes in many areas of the ad tech industry. Some transformations might seem entirely new, while some took their start in recent years and will come to full power in 2020.
To help you get prepared, we’ve created a list of the 5 most anticipated transformations in the world of digital advertising. They include white labeling, new ad formats, and targeting techniques, DTC, in-house ad tech in eCommerce, SPOs, as well as new video marketing trends.
1. DTC and In-house ad tech
Over the last few years, advertisers and marketers realized the value of shared big data. As Mar tech enriches Ad tech with more data, Ad Tech provides more efficient utilization of this data in return. In 2020 Ad tech and Mar tech tools will keep merging. This trend is very promising, as such cooperation will enable the creation of uber personalized campaigns.
At the same time, DTC (direct-to-consumer) advertising is conquering the e-commerce market, which brings even more personalization opportunities. The usage of this strategy makes brand-consumer interactions more customer-centered and individual. Examples of direct-to-consumer advertising campaigns include promotions that encourage customers to collect codes from product packaging or register phone numbers on websites in order to win prizes.
This marketing technique can have even more benefits for eCommerce if combined with white-label Ad Tech solutions that help companies bring programmatic in-house. This way, using a white-label ad tech solution, DTC marketers can plan and execute their ad campaigns independently without intermediaries. Moreover, companies can create their own ad exchange and integrate there only trusted DSP and SSP partners. Since eCommerce has a large pool of demand, white-label Ad Exchange can be especially beneficial for companies that would like to open their own programmatic business.
One of the most powerful tools for eCommerce is retargeting, as people who already purchased a product or service are more likely to be interested in further purchasing. The good thing is that D2C brands collect lots of their own first-party data, so setting up a retargeting campaign is much simpler for them. The gathered information can be used for audience segmentation. Later, such segments can be integrated into White Label DSP or Ad Exchange. Thus, such unique first-party data becomes very valuable for personalization and targeting campaigns.
2. Rise of White-labeling
The main role of SSPs is to help publishers sell their inventories at the best price. As such, they serve as providers of useful tools for selling inventory, such as price floors, effective inventory packaging, seller rules, and so on. The advertisers, in turn, are supported by DSPs. The whole ecosystem is aimed to promote a fair and transparent marketplace.
However, due to gradual changes in the market, this balance has shattered which resulted in increasing bid shading and downward pressure on prices for SSPs and DSPs. To deal with this asymmetry, ad tech players started to turn to other options, such as white-label ad tech platforms that enable individual business models. As white label solutions provide an opportunity to build a well-balanced and transparent environment for everyone, the result is what we see now - the rise of the white label as an alternative to uncertainties on the market.
What is even more promising is that there are many options to choose from. For example, our solutions include white label SSP and DSP, but also SmartHub - a customizable white-label ad exchange (open marketplace). One can opt for one and ensure a fixed revenue stream from a stable and transparent advertising environment. Similarly, SmartyAds White Label DSP provides an opportunity for advertisers to get a safe and profitable ad-buying platform.
3. New interactive advertising formats
Not only the way ads are served is changing, but also their content and format. New interactive ad formats are on the rise. In 2019, shoppable posts entered the marketing world which allows customers to shop directly from the social media platforms. Other interactive formats include quizzes, surveys, elements of AR and VR, 360 degrees videos, as well as embedded calculators for different services. All those formats offer immersive and original experiences and, hence, give better results. This kind of involvement makes consumers feel more connected to brands. No wonder that 91% of users prefer more interactive content over traditional advertising formats.
The most impressive statistics, however, is shown by CTV advertising. This relatively new advertising format is unique, as it provides an opportunity to show ads one at a time. Furthermore, because many people are used to watching TV with family or friends, chances are that during one impression an ad will be viewed by more than one user.
4. Video Marketing transformations
As more and more young people claim to completely abandon TV as well as TV commercials, video advertising finds its way to other channels. One such example is connected TV, which provides plenty of high-quality advertising opportunities served to millions of people, sometimes even more than one at a time. According to Emarketer, in 2023 CTV ad spending is estimated to reach $14.1 billion. Similarly, one of the most popular OTT services Youtube is estimated to gain around 198 million US viewers. These numbers show how fast this industry grows, so keep an eye on those in 2020.
Apart from this, more and more brands embrace product placement right into shows and movies which also proves to be successful. For instance, more than $45 million was gained from such advertising in James Bond Skyfall. A fairly recent development in video advertising is location-based product placement. This way one product may be replaced with another depending on the country where the movie is broadcasted. Some companies can go even further by inserting personalized ads to videos and these elements would seem to be a part of original content.
5. SPO and new targeting techniques
One of the key transformations in programmatic advertising is fueled by SPO - supply-path optimization. SPO is an algorithm that analyzes different features of SSPs, such as win patterns, traffic, partner publishers. It is then used to filter out SSPs which use “aggressive” bidding tactics. These algorithms are usually connected to DSPs in order to help them find the shortest path to the most relevant inventory which saves lots of time and money. This mechanism also helps trustworthy publishers since it helps to eliminate unfair players on the market and give prevalence to authorized and good quality ones.
Another important transformation for DSPs and SSPs is the introduction of new targeting solutions, particularly geofencing. This method enables targeting based on location in the real-rime. This way, if potential customers enter the target area, e.g. nearby shop or a restaurant, they will receive a notification or message with an appropriate ad. Studies show that this type of targeting is getting more and more popular, as 16% of US marketing decision-makers expressed the most interest in geofencing over other new technologies.
To sum up
The industry is constantly changing and transforming. In 2020, eCommerce is likely to cooperate much more with Ad Tech because of the rising popularity of D2C strategies. Furthermore, new ad formats and targeting techniques are being developed fast. These trends, as well as other factors, lead to an increased usage of white labeling business models.
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IRINA KOVALENKO, CMO OF SMARTYADS