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Artificial Intelligence is Revolutionizing Marketing. Here’s What the Transformation Means for the Industry

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By Jessica Wong

Artificial intelligence technology is changing how marketers reach and engage customers. From programmatic advertising to data analysis, AI can help marketers do a better job, but this rapidly evolving field also raises concerns and uncertainties.

Artificial intelligence (AI) has started transforming every aspect of our professional and personal lives. The marketing industry is not immune to this digital transformation, with leading brands starting to embrace the opportunities the technology brings. Gaining a better understanding of customer behaviour is one of the core benefits of AI in marketing.

For years, marketers have gathered and analysed data about customer behaviour. Their goal has remained largely unchanged — extrapolate patterns and predict which products and services will be most popular with a certain audience. From that basis, marketers would then identify the channels to reach their target customers.

AI is giving marketing professionals an essential advantage in this quest. This fast-evolving digital technology can analyse more data more accurately than humans can. AI and its subfields, such as machine learning (ML), also identify existing behavioural patterns and predict future behaviour based on that.

The growing role of AI in marketing

In 2020, the market for artificial intelligence technologies in marketing was valued at just over $12 billion. While that may seem impressive, it pales in comparison with the global AI market, which was valued at over $325 in 2021. However, the current market size does not reveal the true potential of marketing-related AI. That only becomes clear by considering growth predictions.

According to experts, the market for AI in marketing will exceed $35 billion next year, nearly tripling in size in only four years. Another four years later, in 2028, industry insiders believe that this area of the marketing industry will have tripled once again. Statisticians expect that marketers will utilize AI to a value of nearly $108 million before the end of this decade.

How marketers are using AI today

How realistic are those expectations? Consider this: as of last year, four of five marketing industry experts said they had already included some form of AI technology in their work. When asked to identify the areas in which AI and ML were already enhancing campaigns, marketing professionals named benefits in several areas:

  • Automation of repetitive tasks
  • Analysis of large quantities of data
  • Personalization of campaigns
  • Predicting conversion rates
  • Optimizing the timing of email marketing

Most of those areas benefit the current leading application of AI technology in marketing — programmatic advertising. A recent survey found that 50% of participating marketing professionals named more targeted advertising as one of the main advantages of integrating AI and ML in their approach.

How AI enhances programmatic advertising

Placing the right adverts in front of the right customers at a time when they were receptive to this content used to be a painstaking process. Machine learning algorithms have allowed marketers to automate buying and selling digital advertising space.

Once programmed, the ML algorithms are not static. They mimic human behaviours, including learning. In practice, the algorithm ‘understands’ whether an advert has missed or exceeded expectations and learns from this outcome. There is no need for additional human intervention. The algorithm, or the machine, learns without additional input simply by analysing results and iterating its approach.

Marketers and the brands they represent benefit from improved targeting of specific audiences with customized messages. As a result, conversions grow, and advertising spends more efficiently. Programmatic advertising platforms work by analysing quantities of data that would overwhelm humans.

These platforms cannot only compute data about user behaviour, website analytics, and demographic information. They also see trends and patterns before humans can. Marketing professionals can then use those insights to make their content more relevant, increasing the likelihood of customer engagement. Plus, marketing algorithms can optimize ad placement and bid pricing.

Understanding AI-related concerns in marketing

Like most powerful technological developments, AI has raised some concerns in the industry. In addition, marketers starting to invest in AI technology are dealing with unanswered questions as the technology continues evolving at great speed. Two of the main concerns relate to customers and marketers themselves. These concerns are privacy, data protection and job security in the industry.

Protecting privacy — AI and ML rely on access to large quantities of customer data to recognize patterns and predict potential behaviour. Despite their far-reaching capabilities, these technologies cannot self-police. They will analyse any data fed to them. Marketers need to ensure that their data collection and usage practices are not only ethical. They must also comply with current privacy and data protection legislation, such as the European Union’s GDPR or the California Consumer Privacy Act (CCPA).

Job security for marketers — Job security for marketers is another concern about the growth of AI-based applications. Most recently, these concerns have been discussed in connection with OpenAI’s ChatGPT software. Granted, it is not possible to predict entirely where the marketing industry is headed, but most experts believe that AI and ML will change existing jobs rather than replace them. Marketers can work more efficiently and effectively to benefit the brands they represent. Their daily routine may change, but it is unlikely that robots will replace human marketers anytime soon.

Final thoughts

While AI has the potential to transform the marketing industry as we know it almost beyond recognition, the technology is not here to replace human marketers. Instead, AI and ML can optimize and streamline current marketing approaches.

Both technologies can also take care of repetitive tasks, allowing their human team members to focus on what they are best at and develop creative campaigns that engage more customers than ever before.

By Jessica Wong

Entrepreneur Leadership Network Contributor. Founder & CEO of both Valux Digital and uPro Digital. Jessica Wong is the Founder and CEO of both Valux Digital and uPro Digital. She is a digital marketing and PR expert with more than 20 years of success driving bottom-line results for clients through innovative marketing programs aligned with emerging strategies.

Sourced from Entrepreneur

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Why The Ad Industry Needs More Of A Collective Consciousness

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By now, it is little surprise that the programmatic advertising marketplace underwrites lots of nefarious activities, including various forms of ad fraud, organized crime and a variety of publishers of misinformation. But who knew it was all being funded by legitimate advertisers? Apparently, NewsGuard did.

To put some dimension around the role legitimate advertisers play in supporting illegitimate information publishers, NewsGuard teamed with Comcscore to conduct a unique analysis correlating NewsGuard’s database of bad actors with Comscore’s estimates for digital advertising value. The result: advertisers are sending $2.6 billion annually to misinformation sites.

While the report does not make a case that many — if any — advertisers are doing that wilfully, it sheds light on the unintended consequences Madison Avenue plays in disrupting the world’s knowledge by placing programmatic media buys to reach the right audience, but in the wrong places.

“The data underscore the scale at which online misinformation and disinformation is unintentionally bought and paid for by major advertisers, who place their ads on thousands of websites using programmatic advertising, a byzantine, computerized process — leaving brands with little idea where their ads are appearing and what messages they are financing,” NewsGuard states in the report, adding an even more ironic implication: that much of that spending is coming at the expense of authentic publishers of information: newspaper websites.

According to NewsGuard’s analysis of data from eMarketer and the Pew Research Centre, “for every $2.16 in digital advertising sent to legitimate newspapers, U.S. advertisers are sending $1 to misinformation sites.”

Now, after covering media planning and buying for more than 40 years, I know as well as anyone that when it comes to such things, Madison Avenue doesn’t have a collective consciousness — or a conscience — and that the results of this unintended underwriting of bad actors is at worst, simple negligence driven by ignorance, marketplace pragmatism, or most ironic of all, misinformation.

But maybe it’s time for advertisers and agencies to develop more of a collective approach to solving this problem. We are already seeing some signs of that in both individual agency (some of the biggest have already signed up to NewsGuard’s data to create whitelists and blacklists for filtering misinformation sites from their media buys) and industry initiatives like the World Federation of Advertisers GARM (Global Alliance for Responsible Media).

Those efforts aren’t just good corporate citizenry, but also good business practice. For a variety of reasons, including economics and especially in regard to one of the ad industry’s favourite Holy Grail acronyms: ROAS (return on advertising spending).

How do I know this, because I was also sent an analysis conducted by audience research lab MediaScience, which found that ad spending on legitimate news outlets outperforms ad spending places on illegitimate ones.

The analysis measured 5,350 participants and ran across 42 newspaper print runs and 252 websites for a total of 6,037 unique brand exposures, comparing a variety of brand exposure and lift metrics for ads placed on news publishers vs. ads placed on Facebook and YouTube.

The results:

  • Newspaper ads outperform Facebook ads of all types by up to four times.
  • Combined news formats are twice as effective as combined Facebook formats.
  • Ads in news are as good as (or better than) ads on YouTube.
  • News offers a stronger ROI than social media.

Sourced from MediaPost

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10 benefits of programmatic advertising to add to your media mix

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By Grace Johnson.

S3 Advertising’s media buyer, Grace Johnson, counts down the top 10 benefits of programmatic advertising and explains why you should make it part of your advertising media mix.

The world of programmatic advertising is often perceived as uber-complicated, full of jargon, and home to more abbreviations than you could shake a stick at. Although the latter two might be true, understanding how programmatic advertising works doesn’t need to be complicated.

In a nutshell, programmatic advertising is the automated buying of online ad space in real-time, using data to reach the right person at the right time. It takes away the need for laborious manual processes, leaving humans more time to optimize their programmatic campaigns and yield stronger results for advertisers. If you’re curious about the benefits of programmatic, and why you should use programmatic advertising in your media mix, read on.

1. It can work for the small and mid-size brands as well as big-budget brands

First things first, it would be wrong to go into all the weird and wonderful things brands can do with programmatic advertising without first debunking the myth that you need endless bags of cash to get started. The beauty of real-time, audience-focused programmatic buying means we end up with far less wastage and far more bang for your buck. So if you don’t have tons of budget to play with, or you want programmatic to prove itself before investing more, rest assured there will be an approach for you.

2. Programmatic reach is huge

“I don’t want to reach as much of my target audience as possible,” said no one ever. We’re all agreed that the most efficient forms of advertising reach their desired audience at scale. Programmatic advertising allows us to do just that. With access to ad space across millions of sites, programmatic opens up the opportunity to find and engage your audience, wherever they are (almost).

3. You are in control

Programmatic advertising has many a perk, but one of the most invaluable benefits is the freedom it gives brands to press pause and make changes to campaigns in mid-flight. From a performance perspective, it allows optimizations to be made to upweight the best performing audiences, sites, time of day and so on, helping to continuously boost results. Plus, from an ‘oh no, our website is down’ point of view, it allows brands to get out of jail free and stop paying to drive their audience to a dead page in an instant. What a dream.

4. You can show off your brand using funky formats

Long gone are the days where click-focused banner ads were the only formats associated with programmatic. These days, brands can engage their audience with highly interactive digital creative units, drive them to store using in-built maps, or simply wow them with a beautifully-designed web takeover format, which – yes, you guessed it – can be bought and served on an individual user basis in real-time.

5. The targeting possibilities are pretty much endless

Browsing for your SO’s birthday present only to be stalked forever by an ad of that very product? We’ve all been there. As much as retargeting can play a key part of a brand’s programmatic strategy, there are many other targeting strategies brands can employ to find and engage key audiences. These can be a bit sexy, such as overlaying previous purchase data via Mastercard, real time and historic geo-location data, email data, Amazon purchase data, or household data, or they can be slightly-less-sexy-but-still-effective, with strategies like contextual targeting, where the ad appears alongside relevant content.

6. You can sync up your programmatic activity with DOOH (digital out-of-home billboards)

Picture this: you’re walking down the street, it’s nearly lunchtime. You walk past a billboard advertising a lovely looking burger (sorry vegans) and it catches your eye. You continue walking, getting out your phone to check the weather. You open the app and there’s that burger again. Giving in to temptation, you make your way to those famous Golden Arches. You have just experienced a DOOH/programmatic sync that captures audiences as they come into proximity with your OOH advertising and retargets them on their phone. A simple, yet super effective way to increase frequency and maximize the impact of messaging on your audience.

7. Programmatic campaigns can be weather-triggered

Not only can you reach the right person in the right environment at the right time, you can also reach them in the right weather conditions. Weather signals are a powerful way of contextualizing your brand’s messaging and are an instant win among your audience. These triggers can be based on insight about your brand and can be as simple as ‘sales increase when it rains’. Setting these parameters in the programmatic buying platform means that budget can automatically be upweighted when desired weather conditions occur, or the messaging can change to become more relevant.

8. You know every single site your brand appears on

We no longer live in a world where programmatic campaigns are set up and delivered with no insight into where our ads ended up. Oh no. Goodbye black box, hello transparency. When running either across the open-exchange, or a pre-agreed list of sites, brand safety and transparency are paramount. With strict measures in place to exclude sites and content deemed unsafe, brands can be confident that they’re reaching their intended audience in perfectly acceptable, brand-safe environments.

9. Programmatic advertising fulfils objectives galore

Despite the rumours, the reason why we use programmatic advertising isn’t just to sell, sell, sell. Granted, it does this well, but more and more brands are increasingly turning to programmatic to help improve awareness and consideration too. Through a clever mix of the right targeting and, crucially, a well-executed creative, programmatic advertising has proven it is nothing to be sniffed at when it comes to increasing brand metrics.

10. Because you need to be where your competitors are

If the above nine reasons weren’t enough to persuade you, then let this be it. The chances are, your competitors are already talking to your potential customers through their own programmatic campaigns. This means they’re benefitting from the extra edge this type of digital buying creates. In an increasingly competitive world online, now more than ever it’s important for your brand to be active and compete in the programmatic space.

Feeling inspired and ready to explore how programmatic advertising could work for you? Good. Our team of experts at S3 Advertising agency will work with you to plan and execute a programmatic campaign that will speak to your audience and deliver against your objectives. Whether you want to raise awareness of a product or service, drive traffic to your site, drive people to your store or something else –get in touch with our team and we’ll do the rest.

By Grace Johnson.

Grace Johnson is media buyer at S3 Advertising.

Sourced from The Drum

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Digital Marketing’s Last Decade Is Digital Marketing’s Lost Decade

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By Dr. Augustine Fou

Most marketers had been happily paying for programmatic advertising for the last decade, very proud of themselves for being “digitally transformed.” They were also happily using vanity metrics like CPM prices, number of impressions, and click through rates because those were easy to measure and easy to report. Buying digital ads became as easy as playing a video game, with colorful dashboards that showed them what great discounts they got (“cost efficiency”), the number of impressions they bought (“reach”), and how many clicks they got (“performance”). But this triple cocktail of low price, large reach, and high performance was so addictive because every part of it was faked by fraudsters.

The low CPM prices were only possible from fraudulent or fake sites that plagiarized all their content or used no content at all. Real publishers with real human audiences had real costs of producing the content; so they could not sell ads for very low CPM prices. Further, there’s a finite number of humans that visit their sites every month; so they could not magically manifest a lot more reach. But fake sites could easily do this by buying traffic and doing audience extension. No one can force a herd of humans to all go to the same site at the same time to increase its traffic and audience; but it takes no more than one command line to instruct a vast botnet to generate a large number of pageviews on a site — exactly the amount that was paid for. And these same bots click on the ads too. Not too much or else that would be suspicious. Bots tune their click through rates to be in the 5 – 15% range, which is always higher than real human click rates. This way, marketers are tricked into thinking ads on fake sites are performing so much better than ads on real sites with real humans, so they allocate more or all of their budget to programmatic channels, which are teaming with such fake and fraudulent sites.

Do you see how this all worked together? Larger quantities of ad impressions, lower CPM prices, and better performance — indeed the illusions of vast reach, cost efficiency, and performance — led to what is now known as “digital marketing’s lost decade.” When “programmatic” ad buying really took off in 2012-13, the disparity from reality really took off as well. Note the green and yellow lines in the chart below — those represent humans’ usage of the Internet, social media, and mobile. Those two lines are pretty much flat across since 2012-13; indicating that real humans’ usage had all plateaued, already maxed out. But the blue line representing digital ad spending continued upward. How can this dissociation from reality be explained? Easily, with bots. Bots are simple software programs that can be remotely controlled to automate browsing (load more pages) and simulate desirable human actions, like clicks on ads. It was technically trivial to simulate all the things that marketers wanted to buy — more reach, more clicks, lower prices.

 

Some marketers have had the courage to run “turn off” experiments with their digital media. What was interestingly consistent is that all of them found that turning off their digital ad spending didn’t change business outcomes — eBay (2015), P&G (2018), Chase (2017), Uber (2019), AirBnB (2020). So what were they spending millions of dollars on in digital, if it were not producing real, measurable business outcomes? We may never know. But what is clear is that more marketers need to check their own digital spending more closely, and do things differently than they have been doing for the last decade — or shall I say “lost decade?”

Marketers should pay higher CPMs by buying ads from real publishers with real human audiences. You know that you have to show your ad to a human before you can get any kind of business outcome right? Showing ads to bots, no matter how low the CPM prices, will drive no incremental business for you, even though it looks really good in the video game called digital advertising — you got the highest score ever this year because you bought more ads than ever before at lower CPM prices than ever before. Yay! But that was not marketing.

Paying higher CPM prices don’t necessarily mean greater costs either. That’s because CPMs are unit pricing (cost per thousand digital impressions). If you bought fewer ad impressions, even at higher CPMs, your total cost could actually be lower. You don’t need the vast quantities or enormous “reach.” It’s not real reach, it’s just the illusion of reach, if you’re not “reaching’ humans anyway. You don’t need to buy as many ad impressions to reach real humans. Humans tend to visit a small handful of mainstream sites repeatedly. Even though they do visit long tail sites for niche content once in a while, the “at-scale” quantities of impressions from the programmatic long tail are also an illusion, that conveniently helped fraudsters feast on marketers’ ad dollars for the last decade.

Finally, accept lower click through rates. Humans click on ads very rarely (when was the last time you deliberately clicked on any ad?). But the lack of clicks does not mean the campaign performed poorly; on the flip side, the presence of clicks faked by bots does mean the campaign performed poorly. Those clicks are not real, and the high CTRs (click through rates) don’t mean real performance. If you understand the above, you will also understand that the single most important factor in digital marketing is getting your ad in front of a human in the first place. Everything else — like targeting, viewability, click rates, etc. — is secondary. Smart marketers are ditching the ad tech targeting (costs more, works more poorly) and simply showing ads to Safari and Firefox users; savvy humans use iPhones (Safari browser) and Firefox browsers; bots prefer to pretend to be Chrome, to earn more money due to ad targeting. Advertisers showing ads to Safari and Firefox users are also getting a great deal — 50-70% lower CPMs — because other marketers are not even bidding on these browsers. Showing ads to humans in the first place always beats targeting for business outcomes, because the targeting may not be accurate and bots are pretending to be the audience segments you target.

After the last decade of digital transformation, marketers should now pull themselves out the “lost decade” of digital marketing based on vanity metrics – low prices, vast reach, high clicks. Time to think differently and do different digital marketing. Pay high CPM prices for ads on real publishers’ sites, shown to real human audiences (finite reach) and low clicks. You will see that you are doing better digital marketing, indeed marketing that actually drives real business outcomes.

By Dr. Augustine Fou

I am a marketer of 25 years. I witnessed the entire arc of the evolution of digital marketing. Now I help marketers audit their digital campaigns for ad fraud and optimize campaigns based on accurate analytics. I taught digital strategy at NYU’s School of Continuing and Professional Studies and Rutgers University’s Center for Management Development. I worked on the “client side” for American Express, and on the “agency side” as Group Chief Digital Officer of Omnicom’s Healthcare Consultancy Group and SVP Digital Strategy Lead at McCann Worldgroup/MRM Worldwide. I started my career in New York City with McKinsey & Company.

Sourced from Forbes

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Programmatic Advertising Is Driving Rapid Growth in Mobile Video

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By Yoram Wurmser

As more people watch video content on their mobile devices, the nature of mobile video monetization is changing. This is particularly the case for programmatic advertising, which we define as an automated, technology-driven method of buying, selling or fulfilling digital display ad placements. Overall, mobile video ads sold programmatically generated $19.93 billion in revenues in 2019 in the US and will generate $24.87 billion in 2020.

Mobile programmatic video ads represented 87.1% of total mobile video ad spending in 2019. Roughly half of mobile video ad spending went to native video ads (mostly in-feed ads in social media), which are overwhelmingly sold programmatically. The other half were in-stream ads, including those within YouTube, Twitter, Snapchat and Facebook Watch as well as premium OTT channels like Hulu.

Premium OTT channels, and even many mobile-first video publishers, have traditionally sold much of their mobile inventory via direct buys. This remains broadly true, but increasingly, those direct sales are using programmatic elements. Typically, these deals are programmatic guarantees for inventory on premium OTT services.

“Even if the seller and the buyer know each other, they are using programmatic pipes for executing a transaction and for serving a campaign,” said Kevin Schaum, vice president of advanced solutions group at SpotX, an ad-serving and supply-side platform (SSP) for video publishers. “That shift has been one of the main things that we’ve seen.”

With programmatic buying now widespread, ad buyers have more opportunities to place their content by device type. Although a few advertisers create versions of their advertising for different segments of users, for the most part, the targeting is using general data, including metropolitan statistical area.

As competition for advertisers grows fiercer, many of the small to medium-sized publishers have established partnerships that let them sell ads via programmatic direct. They can tout the brand safety advantages of buying through a known publisher but also the scale across sites that advertisers want. Group Nine Media, Insider Inc. and BuzzFeed have formed one such partnership.

“Rather than having our advertisers come to us individually and only buying YouTube or in-feed [ads] on our owned and operated [O&O], we’re trying to package that up for them and give them the scale they’re looking for,” said Ken Blom, senior vice president of strategy and operations at BuzzFeed.

“If you choose to buy all your media programmatically and not talk to publishers, you’ll miss out on the fact that we have ad formats that aren’t programmatically offered, or there’s some audiences that you might be missing if you understood how we’re making more affiliate content,” he said.

By Yoram Wurmser

Sourced from eMarketer

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Stepping into the Future: Five Key Trends

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Over the last 20 years, the media landscape has rapidly evolved to meet the ever-changing demands of consumers and technology innovation. This has resulted in new opportunities for the advertising industry. It has also contributed to the great complexity that marketers face today.

It’s amazing to think back at how much has changed in a relatively short period. Just 10 years ago, TV and newspaper commanded most media buyers’ dollars. In 2017, digital has eclipsed TV ad spending for the first time.1 The two likely explanations for this are targeting and measurement. Digital advertising has offered targeting of precise audiences and detailed measurement of campaign performance where TV traditionally has not.

Of all the new ad tech and new technologies, the following five key trends are anticipated to have the most significant impact on marketing.

1. The shift from one screen (TV) to truly multi-screen entertainment
Content is no longer restricted to TVs mounted in the living room. Today’s consumption is vastly different. It’s estimated that there are eight video playback devices per broadband home today.2 By 2020, 83% of the population is projected to be consuming digital video.3

This means that advertising needs to follow the consumer – across whatever devices they use to view content. Advertisers will want to be able to serve, sequence and measure advertising seamlessly across screens and platforms. With this change, we will also likely see new ad formats (shorter ads, interactive ads) and growth in brand integration into content.

2. Moving from contextual-based targeting to audience-based targeting
The TV advertising ecosystem has to evolve to survive the competition from digital alternatives, and it is. Part of that evolution is the birth of targeted TV advertising. Data-driven and addressable TV advertising are on the rise because both give advertisers a more effective way of reaching their true target on TV while also being able to attribute ROI through the entire marketing funnel. The linear TV addressable space is growing quickly, and, according to one estimate, will reach over 74 million households by 2021.4

As addressable TV continues to grow in scale and adoption, the next phase is cross-screen addressable advertising, tying TV to digital and mobile. Hundreds of millions of devices are used every day, and the people using those devices are accustomed to receiving ads on them. There is tremendous opportunity to scale this product and deliver integrated advertising campaigns to the same target audience at home and on the go.

3. The rise of programmatic advertising
In addition to the way ads are now being served, even the methods of accessing inventory are evolving. The bulk of digital buys are transacted programmatically—the automation of planning, buying and reporting. Programmatic digital display ad spending was just $1.1 billion in 2011, and is projected to reach $45.9 billion in 2019.5 This represents an astounding 84% of total digital display ad spending.

While the television space has yet to reach these staggering levels of growth, we are starting to see some of these trends evolve.

4. Integration of brands in content
While the growth of content consumption has mostly been positive news for advertisers, there is also growing consumer demand for ad-free programming or fewer ad loads within programming. A marketer’s solution to non-interruptive-based advertising must be two-fold: First, make advertising more relevant, as with addressable and data-driven TV. Second, expand native-based advertising, which integrates brands directly into content.

Branded content is any content produced by a brand that supports the brand’s marketing objectives and aims to provide something of value to audiences—typically by entertaining, informing, and/or educating. This means that rather than having brand messages only be advertising, it can be woven into the content and the experience itself.

While growing, both branded content and branded entertainment need better data to support high development costs and to track ROI.

5. Development of virtual reality and augmented reality experiences
While virtual reality (VR) and augmented reality (AR) have been talked about for decades, they are finally a reality for consumers and marketers alike. As headsets and software have become more affordable for consumers, marketers are ready to take to these new platforms to deliver truly immersive environments, which evoke a 27% higher emotional engagement than 2D environments.7

Often lumped together, VR and AR are actually different types of experiences. VR takes you into a “virtual” experience more akin to traditional video gaming whereas AR “augments” what you are seeing in the “real world.”

AR could become the primary driver of a $108 billion VR/AR market by 2021 with AR projected to take the lion’s share of $83 billion and VR $25 billion. In the short term, AR has more potential because you don’t necessarily need special hardware/software – any smartphone can run an AR application.

Not only has AR proven its feasibility and practicality, but perhaps the greatest opportunity actually lies in its ability to integrate location intelligence. 750 million downloads of Pokemon Go would certainly suggest mobile users are eager to participate in immersive experiences.8

These opportunities for marketers to combine the idea of branded content with VR and AR to create fully immersive worlds and landscapes for consumers to interact with are the next level of entertainment consumption and ad delivery.

To learn more about “The Five Key Trends,” come explore our new AT&T AdWorks Lab showcasing the future of media consumption and how marketers can most efficiently reach their target audiences across any platform. The AT&T AdWorks Lab is designed to educate and inspire marketers.

Feature Image Creditt: AT&T AdWorks 

By .

Sourced from AdAge

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The state of programmatic advertising

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By Yuyu Chen

Programmatic advertising has gotten a lot of bad press this year, what with news about ad fraud, the YouTube ad boycott and the Guardian-Rubicon Project lawsuit. Regardless, programmatic is expected to continue to grow as more publishers and marketers shift from open exchanges to private marketplaces to control brand safety and minimize ad fraud.

Here, we break down major trends in programmatic advertising, based on data from eMarketer, Magna Global and Forrester Research.

The key takeaways

  • Programmatic advertising will continue to grow in spite of brand-safety issues like the recent YouTube ad fiasco.
  • The use of PMPs is increasing while open exchanges are declining. For instance, about 95 percent of ESPN’s programmatic buying is managed through PMPs.
  • The fastest growing programmatic channel is mobile.
  • While programmatic TV is a small slice of total TV ad dollars, it represents 12 percent of local cable spend.
  • Programmatic out-of-home advertising is gaining more popularity, but it is still nascent.
  • Most business-to-consumer marketers don’t think they know what works in programmatic because of ad fraud.

The key stats

  • $33 billion: eMarketer estimates that programmatic display ad spend will reach $33 billion this year and will hit $46 billion in 2019.
  • $24 billion: In the U.S., over 74 percent of the total $32.6 billion programmatic display ad spend will go to private setups like PMPs, per eMarketer.
  • $600 million: The amount of money that will go into addressable TV (a targeted form of programmatic TV) this year, compared to $450 million in 2016, according to Magna Global.
  • 85 percent: Nearly eight in 10 mobile display ads in the U.S. are purchased programmatically, which will increase to around 85 percent by 2019, according to eMarketer.
  • 2 percent: Only a small portion of the about $2 billion digital out-of-home spend comes from programmatic today, per Magna Global.
  • $10.9 billion: Forrester estimates $10.9 billion will be wasted on low-quality display ads between 2016 and 2021.

The agency view
In April, a number of big ad spenders including Chase Bank pulled ads from YouTube because ads were appearing next to extremist content there. (Some brands, like Nestle, Verizon and General Motors, have since returned to the platform.) Nichola Perrigo, director of digital marketing for agency RPA, said that during the crisis, her team discussed the real implications with the agency’s clients and received mixed reactions: Some wanted to pause advertising on the platform until additional controls were rolled out, while others chose to keep running ads, knowing that enhancements would roll out soon. Either way, the YouTube ad scandal will help bring more transparency to programmatic buying, said Perrigo.

On PMPs, Perrigo thinks whitelists could be a better approach. Her team has tested PMPs against whitelists, and the latter can be less expensive and sometimes allows advertisers to avoid running into one of the main issues with PMPs: scale.

Paul Vikan, director of performance for agency Noble People, echoed the same sentiment, saying that PMPs are less premier than they sound, and whitelists are more cost-efficient. “We can achieve the same goals with a whitelist approach that is much cheaper than PMPs,” he said.

The analyst view
In the short term, advertisers may pull ads from platforms like YouTube due to brand-safety concerns, but in the long run, advertisers will keep spending on programmatic regardless of whether they want to use the data to inform the buy or whether they simply want to automate the process for efficiency, said Lauren Fisher, principal analyst for eMarketer.

“Programmatic has become a huge component of brands’ media buying strategy. They are pulling away from certain platforms, but they are investing programmatically in other places like private marketplaces,” said Fisher. “Remember, programmatic is not just about open exchanges — it is lots of private buying and social media buying from Facebook.”

Fisher also thinks programmatic TV is still nascent, although big media companies like Turner and NBCUniversal are vocal about their efforts in the space. “Linear TV is very different from digital advertising, so it will take some time for the market to shift to addressable TV,” she said.

By Yuyu Chen

Sourced from DIGIDAY UK

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