To navigate the ever-evolving digital landscape and keep up with the competition, businesses are compelled to innovate like never before. Marketers are well-advised to think about where the industry is moving in the future and technology’s impact on their business, explore how to take advantage of the tools, technologies, and platforms to streamline operations and improve customer experiences.
It’s critical to stay ahead of the curve and challenge the status quo whilst proactively engaging and retaining customers through relevant and engaging experiences. Digital ad spends will continue to increase in the new decade and according to eMarketer, worldwide digital ad spend is predicted to reach over US$500.79 billion by 2023, and marketers will increasingly have to tie their digital ad spends to ROI and real-world outcomes.
1. Connected TV (CTV)
CTV and OTT will continue to dominate the advertising industry in 2020. With mega-events for advertisers like the Summer Olympics and the 2020 elections, CTV environments will play a key role in reaching younger audiences at scale. Already, direct to consumer brands are heavily investing in CTV advertisements, recognizing that we’re entering an age of being able to buy the big screen without having to drop huge amounts of money on the table.
However, as more ad dollars shift to this new environment so will the attention of fraudsters. 2020 is the year CTV goes programmatic, opening opportunity for brand-unsafe or ad fraud scenarios. As a result, the industry will see verification companies like IAS continue to expand their CTV solutions in 2020 to ensure advertisers and publishers can effectively advertise in the new environment.
In 2020, we are also likely to see subscriptions to ad-free CTV services begin to stagnate as consumers reach their limit on willingness to pay for yet another streaming service. Bundling may be more common among streaming services, essentially grouping together to provide consumers with a more holistic service in one as a better or more cost-effective deal (e.g. a free Hulu account with your Spotify subscription) – especially as consumers catch “subscription fatigue.”.
2. Brand suitability
2020 will be year that contextual targeting achieves scale for advertisers. An increased focus on brand suitability from advertisers requires technology that does more than just protecting brands from risky content, it requires technology that enables a clear understanding of the nature of webpage content with detailed granularity and greater scale than ever before. This need will be particularly prevalent in Europe and California, where privacy regulations (GDPR and CCPA respectively) limit the data available for audience targeting.
This situation will likely accelerate the shift towards contextual targeting as a means of reaching desired audiences. Sentiment analysis, providing the ability for brands to target based on negative or positive sentiment will grow stronger as an offering across the industry. Sentiment is an integral part of suitability conversation and provides the opportunity for the industry to build more intelligent solutions and protect themselves against the growing environments of user generated content. AI and machine learning will play a crucial role in developing sophisticated technology that is up to near-human comprehension when it comes to contextual and sentiment analysis.
The approach of brand suitability, ensuring the content and environment of where ads appear aligns with brand values, is a more positive approach than brand safety alone that can help avoid the consequences of overusing keywords. Contextual and brand suitability targeting also represents an opportunity for publishers to monetize their sites in a world without cookie data.
eMarketer predicted that digital ad spend would outpace print ad spend in 2019 and the industry is on track to meet those predictions. In 2020, advertisers are going to be spending more on digital video than ever before as the format solidifies its status as the lynchpin to online campaigns, particularly within social platforms. Consumption of video content is expected to grow across all devices and is likely to become the main format used across most, if not all, social platforms.
Despite a slow start to the industry’s adoption on digital video ad serving template VAST 4.2, in 2020, we expect the whole ecosystem will catch up. Video player-ad interface definition will continue to depreciate, as VAST 4.2, released earlier in 2019, will fix the gaps left by the previous iteration. We’re getting closer and closer to true cross-channel, device, and media planning as metrics are standardized across the
industry and various mediums.
Privacy will remain top of mind for consumers, who have demanded greater transparency into the use of their data. In 2020, app privacy is certain to get tighter, with stricter rules imposed for brands and greater transparency given to consumers about how their data is used and what information about them can be accessed.
Mobile in-app content level brand safety has been a big ask from the industry in 2019 and will continue to be top of mind in 2020. At IAS we are actively working on developing this solution.
With the advent of more sophisticated fraud patterns and the content-fueled data boom, rule-based deterministic techniques for catching fraud will become highly ineffective compared to the sophisticated machine learning driven models employed by IAS. Bots continue to evolve – in 2019, the IAS threat lab even found that bots are now opting into new privacy mandated cookie retention policies of the websites they visit. Fraudsters will have increasingly greater access to sophisticated technology and the industry will need more sophisticated AI/machine learning technology to be able to catch it.
In 2020, fraud in CTV and OTT is likely to grow in sophistication – the fraud will always follow the ad dollars, and in this case, it will follow CTV. IAS has already developed the first-ever CTV verification solution that directly integrates with video publishers to validate that video ads are played to completion, fraud-free, on CTVs. The risk that fraud poses to CTV will only increase as this type of inventory becomes available on open exchanges.
As performance measurement gets more granular, advertisers will further optimize viewability metrics beyond MRC standard, to drive engagement and, ultimately, real business outcomes. Today, advertisers are looking for optimum viewability metrics for each campaign, using any combination of time in view, quartile(s), percentage of pixels in views and audibility, across all devices and platforms. Those definitions are connected to actual campaign outcomes, so IAS clients can leverage this custom approach both for pre-bid decisioning and post-bid measurement.
The industry is moving towards a holistic 360-degree approach where custom performance metrics span across all environments. Inventories across all channels will be evaluated consistently, as the advertisers will continue to request more transparency around measurement. The industry will start to demand more granular optimization on viewability, giving advertisers greater insight into the impact of viewability on their campaigns.
The vast majority of ad dollars go to Google and Facebook, which will continue to grow and consolidate no matter how many players try to take more of it. Agencies and advertisers will continue to look for alternatives but this duopoly will continue to be the most effective option. Facebook and YouTube will continue to dominate into 2020, despite increased scrutiny. We will, however, see ad spend continuing to consolidated. In 2019 we saw major social players starting to work closer with verification companies to verify their ads, and we see that continuing in 2020.
The policies surrounding political advertising will continue to be significant as we enter an election year. Facebook recently announced they will not fact-check political ads, whilst Twitter plans to ban political advertising because of their belief that political messaging should be earned, and not bought.
2020 will be a major year for audio. In the past few years, the rise of in-home voice assistants has paved the way for a renaissance for podcasts. Advertisers have found high engagement rates for ads played during shows, with even more return when the hosts themselves read them out. But the advertising side of podcasts is still very much in its infancy, with direct correlations between listener and buyer tricky to track. While year-over-year growth for podcasts through 2021 is forecast at over 30%, podcasts currently, and likely will remain, a small percentage of the overall digital spend. As podcasts undergo a path towards scale, we expect to see dynamic ad insertion rise.
According to Zenith’s “Programmatic Marketing Forecasts” report, programmatic ad spends will reach US$98 billion, amounting to 68% of the global digital media ad spend by 2020. The following will impact programmatic in 2020:
- Google moving to first price auctions and its impending impact on programmatic ad buying;
- Ad tech consolidation will likely affect DSPs and SSPs;
- Continued adoption of the open measurement SDK and full cooperation between all players in the ecosystem (publishers, advertisers, DSPs, SSPs) to help buyers successfully target measurable in-app inventory;
- Targeting will become contextual in a cookieless future;
- Advertisers will have to work with publishers to combine first-party data insights into programmatic campaigns while maintaining compliance with the advent of privacy regulations like GDPR and CCPA;
- Data decisioning will shift into more PMPs and Programmatic Guaranteed offerings.