Jul'22·Jordi Capdevila·3 MIN
AdTech: Technology Trends Transforming the Advertising Landscape
Advertising has come a long way. From ads on sheets of papyrus that date back to 3000 BC, to billboards, to television and now augmented and virtual reality… technology has perpetually pushed the boundaries of how messages get delivered to an audience.
The last two years have been a major inflection point for the advertising world. Businesses and brands are seeing consumers shift from offline to online at an unprecedented rate. As a result, a bulk of the spending by businesses is towards digital inventory and advertisements. Brands need to ride the new wave of digital advertising that leverages technologies such as AI and machine learning to enhance messaging, optimize targeting, manage diverse channels, and more, to ultimately reach millions.
According to reports, digital advertising spending worldwide stood at an estimated $378 billion in 2020. This included spending on desktop, laptop and mobile devices. The forecast for 2022 is that this number will cross $524 billion.
With the number of devices, screens and formats growing almost exponentially; the main goal of advertising has shifted from not just to reaching the largest audience possible, but to reaching the right audience. As consumer patience shrinks, advertisers are now tasked with finding creative ways to reach the right audience, at the right time, on the right screen with the right content, in the right context. Without optimizing their approach to marketing by leveraging technology, brands will only see smaller pieces of the pie come their way.
With most people being confined to their homes over the last two years, and hybrid working models becoming a reality, optimizing the digital strategy for marketing is the need of the hour. Today’s consumers effortlessly juggle viewing content on mobile devices, laptops, tablets and smart TVs. Successful cross-device targeting is no longer just about delivering the same ad across devices. Technology today is all about building a campaign with a variety of connected ads or content delivered to the user, based on the device that they are viewing at that point and ultimately delivering a unified consistent experience. Today’s adtech not only helps design but also monitor engagement and actions based on consumption patterns.
The new avatar of TV
The last 18 months also saw a big shift from traditional TV to Connected TVs (CTV). This shift has presented advertisers with a great opportunity to reach millennial consumers. As CTV and new-age targeting technologies come together, there’s a massive rise in the CTV advertising spend area. Digital video is clearly the next big format of choice for the next decade. The digital video advertising market is projected to grow to US$155.180 billion by 2026, from US$41.132 billion in 2019, with the lion’s share dedicated to mobile phones.
While video remains the dominant force, the pandemic saw a rekindling in the interest for audio formats. Clubhouse, the (now-not-so) exclusive audio social network gained over 2 million followers in less than a year. Research indicates that podcast listenership increased by 16% in the US in 2020. While ad spends in podcasts climbed to $782 million and projected to reach $1 billion this year. Clearly, there is a market that can be tapped to yield significant returns.
Data privacy remains paramount
AI leads the way
As advertisers quickly gear up for a cookie-less future, technologies like Artificial intelligence (AI) and machine learning are gaining mainstream prominence. AI is able to draw correlations between webpage content, webpage images and even video, to ultimately deliver reliable and contextual avenues for advertisers. With very little reliance on third-party data, advertisers are able to comply with all relevant regulations and ensure brand suitability while still maximizing contextual reach of the ads they make. Although still in the exploratory phase, AI is going beyond just smart targeting to even ad creation. In 2018, Lexus released an ad that was completely scripted by AI. As we move towards a privacy-first future, the value of first-party data will skyrocket giving companies like Amazon, Google and other global publishers a huge advantage. For everyone else, there are enough technology options on the way to counter and stay relevant. By integrating AI into the digital ad marketing spend, brands are able to build next-gen smart advertising systems that offer granular insights into consumer behavior and can elevate consumer engagement.
What about the metaverse?
The metaverse, while fairly new, has garnered the most interest from all quarters. From billboard ads for real-world products, to virtual stores and other immersive experiences, the metaverse seems to have endless possibilities for brands. Combining the same with the steadily growing market for augmented and virtual reality driven marketing, brands could be on the cusp of the next big thing. There’s still got a long way to go in terms of measuring impact, setting guidelines, porting current ads to the metaverse world.
In conclusion, it’s an exciting road ahead. Cutting-edge technology is here to stay and will drive the future of advertising. Consumers no longer want to be shown traditional ads, but instead are looking at personalized elements through engaging formats, innovative video, augmented and virtual reality and more to relate to a brand. As consumer expectations change frequently, and more channels and formats present themselves, the adoption of adtech solutions will become the norm for any brand or business looking to stay relevant and competitive.