New Digital Age is running a series of articles looking at the future of programmatic advertising. With regulation reshaping the industry, we’re talking to experts in the market on how new tech, techniques and approaches will help programmatic continue to deliver results for advertisers, publishers and consumers.
By Marc Swann, Search Director at digital marketing agency Glass
By 2020, it’s forecast that there will be a massive £6.8 billion investment in the programmatic in the UK, taking up around 89% of total spending on digital display ads (eMarketer). In the last decade, programmatic advertising has become the go-to method for any online media strategy, and growth looks likely for the foreseeable future.
But, that doesn’t mean there aren’t going to be challenges along the way. For example, the sector is still grappling with recent updates to data law and users are finding new ways to own and monetise the way that they’re advertised to. So, all in all, the future certainly looks interesting.
To get you up to speed, I’m going to take a deeper dive into some of the developments shaping its future.
As we’ve touched on, the future still looks bright for programmatic advertising, but there are plenty of issues that could well shape what the sector looks like in a few years.
Users are taking back control of their data
As if the squeeze of legislation wasn’t making life difficult enough, the news that more users are finding ways to control and monetise their data is another headache for programmatic advertisers. While ad blockers that remove on-page ads have been around for a number of years, new and more sophisticated ways of blocking programmatic adverts are becoming popular, including those that remove the use of browser cookies that advertisers rely upon for data.
Content consumers being able to directly compensate creators
Another challenge that could affect the future of programmatic advertising is the enabling of direct payment between content creators and consumers. Technology called the Interledger Protocol (ILP) is a browser API that allows for real-time micro-payments by users for content that they consume .
This would mean websites that currently host ad space would be able to receive direct and automatic compensation from users — something that would vastly reduce the reliance on advertising revenue to support the website.
Though this tech is still in its infancy, there are companies like Coil and Puma Browser that are building their business models around it. If this saw adoption on a large scale, it could have a massive impact on programmatic advertising.
Programmatic advertising will become more personalised
While there are big challenges on the horizon, the growth of programmatic advertising looks set to continue for some time yet, aided by additional detailed information becoming available about consumers. This will allow advertisers to create even more targeted ads to appeal to their ideal customer base.
This will be a big boost to brands that pay for programmatic advertising. More than half (59%) of customers say that personalisation affects their purchasing decisions, while 78% will only engage with an advert that is tailored to them after previous interactions with a brand, according to research by Infosys.
With incredibly precise bespoke offers out there, I can see this type of advertising becoming more effective and worthwhile.
Though there are certainly technological and legislative obstacles ahead, I expect the programmatic to remain hugely popular in the near future. That being said, the challenges are undeniable, and I expect a gradual evolution as as advertisers adapt to what’s to come.