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What Is The Future Of Digital Advertising?
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What Is The Future Of Digital Advertising?

July 1, 2020

Digital advertising has seen incredible investment in the past few years. With the global population going digital, most companies are adopting their advertising and marketing strategies to cater to a digital audience. The transition from traditional advertising to digital has been on the rise. Digital technologies allow direct search and response from multiple channels, such as mobile devices, email, and social media.

The targeted approach of digital advertising allows marketers to reach their niche audience with precision and increases brand awareness and growth more effectively. The consumption of digital media such as social media and streaming platforms etc has skyrocketed in the last decade. This has advanced the growth and reach of digital advertising as well.

According to an eMarketer report, digital ad spending will rise to $129 billion by 2021. Programmatic ad spending increased to $45 billion in 2019, and it is estimated that video ad spending alone will increase to $13.43 billion. Video ad spending will then account for nearly two-thirds of all non-social display ad spend.

Innovations in digital technologies are shaping the future of advertising. We are likely to see advertisers adopting emerging trends to stay ahead of the game.

The latest trends in digital advertising

DTC and in-house digital ad tech
Direct-to-consumer advertising means companies sell or advertise products or services, directly to their customers without intermediaries. More e-commerce businesses are using DTC to bring their customers more personalized service. DTC advertising campaigns include promotions urging consumers to use codes on product packaging, and subscription-based business models. Companies like Coca Cola and Gillette have successfully used DTC advertising. More companies are moving their ad operations in-house in a quest to have greater control over user data and ad placement. Developments in Ad tech are helping companies to bring programmatic abilities in-house, either fully or partially. Since DTC companies collect their own user data, creating re-targeting campaigns then becomes easier and more efficient for these companies. It is expected that more companies will move their ad operations in-house in 2020 including display, paid, social, and digital media buying.

Digital out-of-home advertising
Digital out-of-home advertising (DOOH) has been gaining traction due to the opportunities in digital advertising, and advancements in ad tech. Companies are increasing expenditure on programmatic advertising such as display, mobile, video, and native ads, and slowly transitioning from out-of-home (OOH) advertising.

DOOH is resilient to loopholes in traditional out-of-home advertising. It is more cost-effective, dynamic, and flexible. Most DOOH platforms provide analytical dashboards on ad performance, location of display ads, playtimes of each ad, total spend, and many other metrics. DOOH has empowered billboards with ad tech innovations such as geofencing, tracking, retargeting, personalization, attribution, and measurement. It delivers a much higher ROI, in comparison to traditional OOH. This is due to the elimination of ad printing requirements and lower labor costs.

Experts believe that DOOH will grow by 12% in ad spending by the close of 2020. There have been exciting developments in DOOH technologies recently, & traction has been gained due to opportunities in digital advertising, and advancements in ad tech.

Programmatic mobile ad spend
The mobile advertising market is growing rapidly. The automation of mobile advertising is changing the way advertisers approach, and sell to mobile users. Programmatic advertising automates the decision-making process of media buying for mobile ads, by targeting specific audiences in real-time bidding settings.

Programmatic advertising has improved the efficiency of the media buying process. In turn, ad campaigns become optimized, through enhanced data collection and analysis. According to IAB, 85% of advertisers and 72% of publishers, are using programmatic advertising. In 2019 the market was worth $36 billion, with the majority of this being dominated by in-app ads. 71% of all digital ad spending came from mobile advertising in 2019.

Video marketing
Video content continues to soar in demand. With the younger generation moving away from traditional TV viewing, to streaming platforms, and social media channels, video marketing is one of the most exciting opportunities for advertisers. Connected TV media such as Amazon Fire TV, Apple TV, and Google Chromecast, has seen an increment in digital ad spend. According to eMarketer, CTV ad spending will reach $14.1 billion in the US alone by 2023, with global ad expenditure on online videos increasing to $61 billion by the close of 2020.

In-streaming advertising has been growing in popularity too. With massive subscription numbers on platforms like Netflix, Prime, and Hulu, streaming platforms are a great channel to increase brand awareness. Many companies are creating location-based, personalized ads, to appeal to relevant audiences. More brands are also using shows and movies for product placements, which offer the potential for huge ROI. 

Artificial intelligence-powered ad sales
According to Salesforce, 60% of marketers believe that AI can help them run more effective programmatic campaigns. AI-powered ad tools can detect patterns at scale in advertising data, and predict what changes can optimize the campaign against specific KPIs. Companies are increasingly augmenting AI into their advertising campaigns, due to its ability to increase ROI, reduce labor costs, and eliminate ineffective ad campaigns. AI is being used to regulate the sale and purchase of advertising in real-time.

Artificial intelligence and machine learning is also being used to fully, or partially, create ads based on a company’s brand objectives. These systems use NLG (Natural Learning Generation), and NLP (Natural Learning Processing), to write ad copies at a fraction of the time required by a human. Companies like IBMGeneral Electric, and Amazon are investing in AI solutions, to improve efficiency and user engagement. Salesforce is another example that uses AI for both marketing and sales.

The adoption of AI will increase in the future as more organizations invest more in digital advertising.

Final thoughts

The digital advertising landscape is ever-changing. As technology continues to evolve, so will the advertising industry. At Alkye, we offer digital advertising services to our clients to meet their diverse needs and help reach their target audience.

AD TechDigital advertisingDigital MarketingDOOHDTCProgrammatic advertisingVideo adsVideo marketing
Nicola Bond

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Nicola Bond

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