Top Trends in Programmatic Advertising: A Look Ahead to 2023

Picture this: As you step into the world of your wedding preparations, you suddenly see ads of exceptional event management companies popping up on the screen. Coincidence? Not quite. Enter the fascinating realm of Programmatic Advertising where algorithms work their magic to bring you tailored event planning options as if they're designed just for you. 

THE RISE OF PROGRAMMATIC ADVERTISING

Not too long ago, advertising required human involvement in tasks such as purchasing media, choosing the target audience, placing bids, and manually supervising the progress of campaigns. The ad publisher managed everything related to the ads, from negotiations to tracking their performance. The physical labor required was time-consuming, expensive, and prone to errors.

The ever-expanding digital landscape, with its countless websites and visitors, made it increasingly difficult for human teams to keep up.

Here's where programmatic comes in. It uses data, algorithms, and automation to reach the right people, get the most out of your ad inventory and drive better outcomes.

WHAT IS PROGRAMMATIC ADVERTISING?

Programmatic advertising is a system that uses algorithms and automation to buy and sell digital ads.

It is, in simple terms, a smart ad-matching system. By using data and algorithms, it enables advertisers to find the right audience at the right time for their ad placements.

HOW DOES PROGRAMMATIC ADVERTISING WORK?

A flowchart could assist in gaining a better grasp of the process: 

To get a clearer picture, let's look at an example.

You visit a wedding planning website as you prepare for your upcoming wedding. Learn how programmatic advertising can create personalized ads that work best for you.

⦁ Demand-Side Platform (DSP) : 

The wedding planning website utilizes a DSP, where advertisers set up their campaigns and receive ad opportunities from an ad exchange. In this case, the DSP analyzes your searches and demographic data to determine your preferences.

For example, if you search for a specific destination, the DSP captures this data and creates a profile that reflects your interest in that area.

⦁ Supply-Side Platform (SSP) : 

They are the counterparts of DSPs and help publishers to monetize their inventory. They work with DSPs to sell ad space.

In our example, the wedding planning website collaborates with SSPs to generate revenue by featuring relevant ads. It's a win-win situation for both the publishers and the advertisers.

⦁ Real-Time Bidding (RTB) : 

Advertisers receive a proposal through the ad exchange when you visit a wedding planning website. They use their DSPs to decide whether to bid for an ad display in real time. It's all about making sure you see the best ads possible!

For instance, event planning websites help hotels, palaces, and wedding halls compete for ad space based on your preferences. The highest bidder wins the chance to display their ad in real time.

⦁ Data Management Platform (DMP) : 

The DMP collects and analyzes vast amounts of data, including first-party and third-party data. It helps advertisers understand their audience's habits and interests. Advertisers use this information to create personalized ads based on your location preferences, especially in the context of wedding planning. 

Suppose you have previously shown interest in luxury wedding halls. The DMP assists advertisers in delivering personalized ads that align with your preferences. They can showcase luxury resorts or beachfront properties.

We understand that finding the right wedding planning tools can be a daunting task. Programmatic advertising ensures that you find tailored venues, decor, and DJ offers that fit your budget.

The future of programmatic advertising awaits us in 2023

12 GROUNDBREAKING TRENDS IN PROGRAMMATIC ADVERTISING FOR 2023

⦁ Digital Out-of-Home Ads :

Why settle for just pictures when you can use a video to portray your company's story in your advertisement?  DOOH advertising is all about catching people's attention in public places. It uses dynamic videos and interactive displays to make an impression on a big audience. Digital screens are used in different locations, like restaurants, sports fields, and arenas. They show dynamic media content for advertising purposes. Statista's analysis suggests that DOOH advertising spendings in the US are expected to grow by around 11.4 percent in 2023, amounting to nearly $2.94 billion. The fact that big brands are utilizing it gives us confidence. At Cannes, Samsung Ads announced that they'd be launching a super cool digital out-of-home solution! How thrilling is that?

⦁ Artificial Intelligence (AI) and Machine Learning (ML) : 

Did you know that analytics can help advertisers achieve better results? Thanks to AI and ML, ad delivery has improved, resulting in better performance and fewer errors. It helps businesses understand their target audience's likes and dislikes, making it easier to determine their advertising budget. Excitingly, Amazon, Google, and Facebook are investing in AI and machine learning to elevate their advertising game. Rest assured, it's going to stay.

 ⦁ Contextual Advertising :

Contextual advertising is a form of targeted advertising where ads are placed on websites or web pages based on their content. An example will help us wrap our heads around this: Google AdSense. It uses the process of finding keywords in content and websites and serving ads based on those keywords. For instance, a fintech company could display an ad for investing in a digital currency in a news article about digital wallets. Research suggests that relevant ads can significantly boost Click-through Rates. As per the IAB's projections, investment in contextual advertising will increase to $297.68 billion by 2023 and $412 billion by 2025. Big things are coming!

⦁ In-Gaming Advertising :

Want to Enhance your brand memorability in a 100% viewable environment? IGA might be an answer for you. According to Statista, the global gaming market is expected to grow to $268 billion in 2025. This is a huge prospect. Experts estimate that by 2028, the Indian gaming market could reach $8-10 billion annually. In-game advertising is a fantastic way to earn money, entertain players, and engage customers. Advertisements look similar to banners, usually somewhere in the background. They don't interrupt the game. It's a great way to optimize your ads in real-time.

⦁ Connected TV (CTV) and Over-the-Top (OTT) Advertising :

OTT refers to media services that allow access to TV content, like Netflix, Prime Video, and Hulu. CTV is a set of smart devices that lives within the OTT ecosystem. Prime examples are Apple TV, Amazon Fire, and Chromecast. Programmatic advertising is gaining popularity quickly. It's seen as the ultimate way to reach the target audience on streaming services and connected TV devices. Advertisers use user data to create targeted ad campaigns for better results. These ad campaigns are based on various factors such as age, location, interests, and TV preferences. With its unparalleled precision targeting and measurement capabilities, it delivers highly personalized ad experiences on smart TVs, streaming devices, and mobile apps. 

⦁ Video Programmatic Advertising : 

According to eMarketer, US advertisers are expected to spend nearly $74.88 billion in 2023 on Programmatic Video Advertising. Undoubtedly, video is the most effective medium for telling stories because it effortlessly combines visual and auditory elements to produce a truly powerful experience. They captivate viewers with visually stunning content and compelling stories. This makes them a great way to grab and hold users' attention. McDonald's used dynamic creative optimization and geotargeting strategies in its programmatic advertising campaign. And the results were impressive! 

⦁ Programmatic Audio Advertising : 

Programmatic audio marketing is a great way for advertisers to connect with their target market. It has numerous advantages. One is that it has highly engaged listeners. Additionally, it has low CPM rates. Another advantage is that it allows for tracking the effectiveness of campaigns in real-time. Lastly, it enables measuring the impact of an audio advertisement on brand perception.  Research shows that 72% of listeners of audio content pay attention to digital audio ads placed in it. Talk about a win-win.

⦁ 5G Speed : 

Attention all advertisers! The advent of 5G is set to be a game-changing breakthrough in ad tech, with far-reaching implications across the globe. 5G will offer faster download speeds, lower latency, and more bandwidth. This will allow you to create immersive and engaging content for their target audience. Publishers will also be able to create more compelling and interactive experiences for their readers. Exciting news! 5G will also enhance streaming media with AR/VR ads.

 ⦁ In-House Programmatic Campaigns : 

It's understandable that companies are leaning towards in-house programmatic advertising campaigns. This trend highlights the importance of transparency in the industry. Bringing programmatic operations in-house gives organizations more control over their advertising campaigns. It also helps them avoid relying on outside middlemen. It is interesting to note that major companies in the industry, such as Marriott, Colgate-Palmolive, Procter & Gamble, Coca-Cola, Bayer, Unilever, and Netflix, have opted to bring some of their programmatic operations in-house. It's a smart move that will undoubtedly lead to greater success and positive outcomes.

⦁ White Label Software : 

Did you know that businesses can buy a white-label advertising platform? Basically, it's a service that lets them customize their own software for advertising and have complete control over their campaigns. Pretty cool, right? Many companies like SEMrush, HubSpot, Teachable, etc. use the SaaS models. We're confident it will stay for a long while.

⦁ Voice Advertising : 

It's incredible how brands are finding new ways to connect with you on a personal and emotional level. Voice assistants like Alexa, Google Assistant, and Siri allow advertisers to reach potential customers in new ways. One of those ways is through voice-activated ads! These ads are interactive and can really leave a lasting impression on you. They've been shown to lead to higher conversions because they give you the option to respond to the call to action. To make the most of these ads, brands need to be concise, accurately target their audience, and be super compelling with their message.

⦁ Privacy and Compliance : 

In this day and age, people are becoming more aware of their right to data privacy. Programmatic advertising is placing more importance on first-party data due to data privacy laws like GDPR and CCPA. Advertisers can use this data to improve their targeting. They can depend less on third-party data and follow data privacy regulations. As an advertiser, be transparent about where you get your data to build trust and genuine interactions with your audience.

FUTURE OUTLOOK

As programmatic advertising continues to evolve, its future holds endless possibilities. The integration of addressable TV advertising will drive the next wave of advancements. Cross-channel and cross-device capabilities will also prove to be instrumental. Dynamic creative optimization and contextual advertising will further enhance the landscape. Programmatic influencer marketing is set to transform the advertising industry. Emerging channels like augmented reality (AR) and virtual reality (VR) are also expected to have a significant impact on this industry. The programmatic advertising market is predicted to reach USD 150.6 billion by 2025 with a CAGR of 22.4%. Technology is advancing, and companies are gaining better insights into their audience. This allows them to establish meaningful connections by analyzing data. Businesses are able to craft individualized advertisements that resonate with each customer. This is an important way for companies to show that they value and care about their customers' individual needs and preferences.

To sum up, programmatic advertising is changing the game when it comes to reaching people online. Advertisers can use automation and data analysis to create effective ads. Staying up-to-date with the latest trends is crucial for making the most of programmatic advertising. Personalized ads can build strong connections with customers. The future of advertising is all about embracing change and being innovative. With programmatic advertising, the possibilities are endless for businesses and consumers alike. Let's work together to create a promising future for everyone!