By Matt Nash, UK Managing Director, Scibids
The world of digital marketing has changed a lot over the last few years. We’ve had to contend with regulatory challenges, the impact of the pandemic, and the upcoming deprecation of third-party cookies. But, despite all of that, revenues have continued to grow and there’s plenty to be excited about. This is highlighted by UK programmatic ad spend being on course to rise comfortably above £26 billion, further cementing the market as the biggest in Europe, and the third biggest in the world.
With this in mind, Scibids commissioned a survey of more than 250 UK senior brand marketers to get an idea of what the industry thinks about the current state of programmatic, and how brands are optimising their strategies to overcome the challenges they face.
The research pointed to a general optimism amongst brand marketers, with 74.2% predicting that their programmatic investment will grow over the next 12 months, whilst just 4.8% expected a decline. What’s more, those foreseeing growth believe they will see investment rise by 30% on average.
A significant portion of the driving force behind growth in the coming year is likely to come from the use of artificial intelligence (AI), which 86.9% of marketers point to as being an important part of their strategy in 2023. However, while the general buy-in seems to be there, many brands may not be applying the technology as widely and as smartly as they should be. And failure to fully embrace AI, as the rest of the world seemingly is, will make it a lot more difficult for brands to overcome the obstacles they face going forward.
AI’s digital marketing applications
AI has been the talk of the town out in the wider world for the past six or months, with the emergence of generative AI platforms such as ChatGPT and Midjourney proving to be the lightning rod that woke up the world to the potential of the technology. This has had the knock-on effect of heightening interest in the use of technology within digital marketing.
Almost half of the marketers applying AI technology are doing so to improve their targeting (48.8%), measurement (48.4%), and data (44.8%), so there is already fairly significant adoption across various areas of digital marketing. One positive of this is that this integration extends to a desire to deliver more sustainable advertising, with 60.7% currently using AI to help them to serve privacy-friendly, respectful, and more environmentally friendly advertising.
Despite marketers already widely applying AI in certain areas of their marketing, just 23.8% of them are leveraging the technology’s capabilities in programmatic buying, presenting a huge opportunity for the power of AI to be harnessed in this area.
AI technology opens the door for marketers to benefit from increased performance with demand side platforms (DSPs). Within these platforms, there are customisation options that enable advertisers to introduce their own algorithms to tailor the bidding rules and KPIs to be more relevant to the specific campaign they’re running.
However, only half (50.8%) of marketers believe they are harnessing the full potential offered to them by these DSP customisation options. The other half cite budget (46.8%), staff resources (41.1%), and time (32.3%) as being the main challenges preventing them from unlocking the power that customisation can offer them.
This is where platforms that use AI to build custom buying algorithms come into play. These solutions can counteract the need to invest time and money into internal resources by plugging directly into DSPs to drive scale for marketers. And they can do this in a privacy-first manner by utilising non-user specific semantic and contextual metadata, thus removing the controversial ‘dirty fuel’ of third-party cookies and identifiers from the equation.
Meanwhile, from a measurement standpoint, these platforms enable marketers to drive toward more brand-specific metrics, such as return on ad spend (ROAS) and quality CPMs (Q-CPMs), at a time when marketing is being increasingly scrutinised over its effectiveness in the face of economic challenges.
Embracing the Golden Age
Utilising the combination of AI and custom algorithms drives growth in sales and brand equity for businesses, enabling spend to be quantified against the KPIs that actually matter to a business and driving real return on investment (ROI) across programmatically-bought paid media.
AI technology that seamlessly combines disparate data sets, making them actionable within ad decisioning is stepping up when the industry is losing third-party cookies and other identifiers, and doing so in a way that leaves behind those questionable tactics.
The driving force for the future of our industry will lie in AI driving performance, while respecting consumer privacy and helping to reduce the significant negative impact that digital advertising has on the industry.
Programmatic won’t be going away anytime soon, but embracing the Golden Age of AI is the only way for marketers to make sure that this continues to be the case.
*Scibids is a client of Bluestripe Communications, owned by Bluestripe Group, publisher of NDA