Global programmatic advertising spending is expected to surpass 700 billion U.S. dollars in 2026.
How is that possible? The answer is simple. New technologies are being developed faster than ever before. To keep up with the industry trends, companies need to quickly familiarize themselves with these significant changes.
In the following blog, we’ve summed up some of the biggest trends we expect to see in 2023 and the challenges and opportunities that come with it.
The end of third-party cookies has given the digital marketing space an opportunity to innovate and create solutions that are flexible and strong enough to sustain in a cookieless world. There are primarily two main solutions that are being invested in: the use and optimization of first-party data, and contextual targeting.
Publisher-owned first-party data will deliver real value and is expected to replace third-party data for larger publishers. Contextual targeting, on the other hand, allows ads to reach high-intent audiences at the right time. This provides users with relevant experiences. Contextual targeting will be the way campaign targeting is performed in the future because of its viability as a privacy-compliant alternative to cookies.This is done through the use of AI, which is driving the development and improvement of contextual targeting.
Market behavior will likely shift in programmatic advertising. Competition will increase as media spending moves away from cookies and towards identity solutions and contextual targeting. However, these solutions are not as feasible to use for smaller, independent publishers who don’t have enough data to scale. As an industry, we need to further develop these technologies to make sure smaller companies won’t start off their cookieless journey at an unfair disadvantage.
As we’re expecting to see the rise of more subscription-based business models, digital audio will likely reap the benefits. Ad spending on digital audio is expected to expand widely in 2022 and reach nearly $7 billion, with an expected annual growth rate of 9% from 2022-2026. However, there are difficulties in projecting the future of digital audio advertising, as there is a need for industry standards to be set and innovation within the domain will be imperative.
Dimitris Theodorakis, VP of Detection at HUMAN, states that “Audio environments are facing similar challenges to CTV when it comes to IVT detection. In many cases audio players don’t support the execution of Javascript code and audio ads are often stitched using SSAI technology which reduces transparency and signal quality. The way in which people interact with audio is very nuanced, which also impacts the detection process. We should work as an industry to introduce more standards that increase transparency and defensibility of this inventory, including standards such as ads.cert 2.0 and device attestation protocols.”
In 2021 the global pandemic paved the way for advancements of digital consumer behaviors. The new word on everybody’s lips in 2021 was no doubt: omnichannel.
Omnichannel will be possible thanks to various mergers and acquisitions (M&A) in the industry.
Amongst last year’s consolidations we saw Microsoft acquiring Xander, iHeartMedia acquiring Triton Digital, Spotify acquiring Whooskah, and Verve Group acquiring Smaato. We can expect the consolidation trend to continue next year, as the market is only growing bigger with constant new advancements and verticals in programmatic advertising.
For the ecosystem as a whole, the increasing number of M&A means that publishers and advertisers will be able to manage an ever-growing number of activities in one place. Meaning, there will be less players to choose from, but each with more features and capabilities.
This will eventually help increase revenue, as it optimizes the media buying process. On the other hand, it’s clear that consolidations could affect competition. With the big getting bigger, and smaller companies striving to get their part of the market share. Though, we can expect to see several regulations surrounding M&A being introduced in the coming year.
Although (SPO) is not a new term or practice, it will definitely have an increasing importance in 2023. By using SPO, the value chain from the buyer to the seller gets more transparent, and ensures that each stakeholder isn’t confronted with any artificial costs.
This is similar to the transparency previously offered through direct buys, but with the benefits of programmatic sales. The IAB defines SPO as a process in which multiple variables are assessed to drive buyers towards the most efficient buying path.
But that’s not all! SPO also enhances the final user experience, by securing the ad supply path, established upon IAB Tech Lab Protocols, and providing quality control. In short, SPO leads to a simplification of the buying chain in programmatic advertising and is another step on the way for companies to embrace omnichannel.
2023 will be a thriving year for innovation in programmatic advertising. There will be a need for regulations and new industry standards, especially in the domain of CTV and Digital Audio. To stay on top of things and be one step ahead of the competition check visit our website and check out the knowledge center.
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