Programmatic digital display ad spend has jumped drastically every year for the past few years: $75.09 billion in 2020, $105.99 billion in 2021, and $123.22 billion in 2022.
It’s clear that programmatic advertising is quickly becoming the default method for digital media buying.
This recent surge in growth is a product of both more advertisers and more inventory, as well as an ever-increasing sophistication of the system. Let’s take a look at some current programmatic ads spending trends that are leading the industry forward.
What are Programmatic Ads?
Programmatic advertising is the buying and selling of online advertising in an automated form. This makes transactions between buyers and sellers much more efficient and streamlines the process of creating digital ads.
Programmatic advertising has been around since the early 2000s, but it didn’t become a major trend until much later. Nowadays, programmatic platforms can reach almost any format or channel, including:
- Digital outdoor
- Connected TV
Sophisticated targeting tactics are used to segment audiences while algorithms execute ad buying and placement, making the process much more efficient.
Let’s look at a programmatic ads example.
Let’s say there’s a company, Bill’s Basketball Goods, that wants to sell more basketball equipment. He hires a programmatic ad company and provides the following info about his target demographics:
- Demographics: male, female, 13-30
- Geography: cities in the US
- Interests: basketball, NBA, sports
- Behaviors: watches NBA clips on YouTube
- Time of day: 7-10 pm
- Device: smartphones
With this info, the platform will then use data to find the best online audiences for the campaign and automatically purchases digital ad inventory through auctions across multiple devices.
Effective ad space is purchased, insights are generated, and marketing performance is further optimized.
Programmatic Ads Spending Trends
Like any other area of marketing, trends move quickly. Let’s take a look at some of the newest trends in programmatic advertising.
Preparing For a Post-Cookie World
For years, third-party cookies were heavily relied on within the marketing industry. In fact, 83% of marketers said that they relied on them to target their key demographics.
However, Google’s plan to remove third-party cookies has caused the industry to begin to shift toward new solutions in a post-cookie world.
The solution? First-party data.
This is the data that a company collects directly from its own customers and owns, as opposed to getting it from other sources.
Google will still allow first-party cookies, so programmatic advertisers have begun to focus on them. When used correctly, first-party data can be incredibly valuable for advertisers.
According to Digiday, there are three important ways for marketers to use first-party data effectively:
- Widen your user data pool
- Launch registration walls
- Segment your audience and use contextual targeting
There are also other solutions being created for first-party data, such as identification methods that allow advertisers to target customers that visit their site or apps.
Renewed Focus on Creativity
Although compelling and captivating advertisements have typically been a focus in marketing, technological developments over the past decade have led many advertisers to shift towards optimization rather than creativity.
With a cookieless future on the horizon, there has also been a renewed focus on creativity. Some key creative strategies in overcoming ad fatigue include:
- Personalization to target audiences on a wider scale
- Video use instead of still images
- Mobile-first ads to target smartphone users
- Testing and optimization in a world without third-party cookies
Creating an inspiring experience through creative marketing will be a new trend in programmatic advertising.
Connected TV Post-Pandemic
During the pandemic, online streaming and TV watching soared to record heights. People’s media streaming habits were transformed, maybe permanently, by the effects of the pandemic. This could be a trend for programmatic video in 2022.
The general public is spending nearly double the amount of time a day using streaming services compared to before the pandemic. Most consumers are now saying that they would rather watch their favorite shows for free with advertisements rather than pay for ad-free content.
This makes CTV one of the biggest opportunities in programmatic advertising for 2022.
Traditional marketing and ad buying processes in TV advertising won’t work for CTV. There will need to be innovation and reinvention when it comes to staying ahead of the curve for connected TV advertising.
Programmatic Display Ads in Mobile Gaming
Gaming platforms have become a huge platform for advertising channels over the past few years. In fact, gaming currently makes up 50% of total industry ad spend and is the top vertical on mobile — and there are no signs of it slowing down.
There has also been a massive leap in mobile gaming apps on both Google Play and on the App Store.
This is a huge opportunity for programmatic advertising, but it also means that advertisers must be pinpoint accurate when they target such an overflowing space.
More competition in the space means it will be harder to reach the right audience at the right time and place. But doing so correctly could be a huge tool to get a sizable ROI on your advertising budget in 2022.
The Rise of Programmatic Audio
For the past decade, visual media has dominated the market. However, audio advertising is becoming increasingly important for brands. It is becoming a powerful tool to reach highly targetable mobile audiences without the need to catch screens visually.
Right now, more than half of Gen Z and millennials say that they’re experiencing smartphone fatigue. They say that audio is a welcome escape from the constant visual bombardment.
Some trends are already pointing to the fact that people are spending more time listening to digital audio than they are on social media. This includes podcasts during commutes and music playlists during workouts.
Audio ads are becoming very valuable and offer a new way to reach users in unique ways. They also have highly specific targeting capabilities, including:
- Point of interest
- Day parting
These factors are clearing the way for programmatic radio and audio to become an important trend in the coming years.
It has become clear that programmatic advertising isn’t just a trend: it’s here to stay. Its clear benefits and uses make it one of the most efficient and effective ways to purchase and sell ads.
However, the way programmatic ads will be utilized will continue to change as the landscape of the marketing world changes.
If you’re looking to grow your business through programmatic ads, get a free consultation with us today and boost your ROI through the roof.