In the years following the pandemic, programmatic advertising has not only faced significant changes but also demonstrated remarkable resilience, with privacy-first initiatives leading the way. These initiatives aim to provide users with more control over their data, which is crucial for marketing campaigns. Despite these challenges, global digital ad spending is expected to rise from $549.51 billion in 2022 to over $601 billion by the end of 2023. The Asia-Pacific region essentially drives this growth, while North America and Western Europe continue to grapple with high inflation and economic slowdowns.
Here are nine key trends in programmatic advertising that have emerged in recent years and will likely shape digital ad spending in the future.
1. In-Housing Programmatic Campaigns
In-house programmatic advertising is gaining traction, with more companies managing their ad buying. In 2021, over two-thirds (68%) of marketing agencies adopted this model, up from 50% in 2020. This shift allows companies to achieve greater transparency in their programmatic advertising efforts, enhancing their marketing strategies. However, this trend also poses a challenge to traditional marketing agencies, as more companies are taking their advertising efforts in-house. In-house campaigns can also lead to cost savings and increased efficiency. However, with rising costs and complexities—such as the end of cookies—many companies may opt for a hybrid approach in the near future.
2. The End of Cookies and First-Party Data Solutions
The shift away from third-party data is inevitable, prompting the programmatic advertising industry to find new ways to target users. Legislation like the GDPR in Europe and the California Privacy Act has made tracking cookies less viable. Major players like Apple and Firefox have already eliminated third-party cookie support, with Google set to follow by 2024. Google has introduced solutions like the Topics API to help advertisers identify user interests without infringing on privacy. Additionally, the development of shared user IDs, such as the Unified ID 2.0, offers an alternative for collecting consent-based user data. Although the amount of data may decrease, its quality is expected to improve.
3. Growth of Connected TV (CTV)
Connected TV (CTV) programmatic advertising is on the rise, with US ad spending projected to reach $25.09 billion in 2023, up from $20.7 billion in 2022. The pandemic accelerated the shift toward over-the-top (OTT) and CTV services, leading to a significant increase in streaming revenues. However, the market has faced challenges in the post-pandemic era, including subscriber growth and rising costs. In response, many streaming services have introduced ad-supported subscription tiers, presenting a unique opportunity for advertisers in the CTV segment.
4. Advancement of Digital Out-of-Home (DOOH) Ads
Digital Out-of-Home (DOOH) advertising is making a comeback after facing challenges during the pandemic. With ad spend in the US expected to reach $4.87 billion in 2023, programmatic strategies are set to capture a larger share of this market. DOOH offers advantages like broad reach, resistance to ad blockers, and unobtrusive placements. The cookie-free future may benefit this segment, allowing for contextual marketing to take center stage and create memorable customer experiences.
5. Rise of White Label Software
White-label software allows businesses to purchase generic advertising platforms and manage their campaigns. This model offers increased control and transparency in the ad-buying process, aligning with the growing trend of in-housing marketing efforts. For many companies seeking better control over programmatic marketing, white-label software presents a cost-effective solution compared to developing custom platforms.
6. Programmatic Audio
Programmatic audio advertising automates the sale of ads in audio content like podcasts. Advertisers can easily buy targeted ad inventory across various devices, tapping into a growing audience. With podcast listenership on the rise—62 % of Americans have listened to a podcast at least once—programmatic audio offers a unique opportunity for brands. However, this trend also presents challenges, such as the need for more creative and engaging audio ads. Unlike visual ads, audio ads are more challenging to skip, ensuring higher exposure.
7. Contextual Advertising
Contextual targeting is not just a trend; it’s a game-changer in programmatic advertising as the industry moves away from third-party cookies. Ads are placed based on the website’s context rather than user behavior, making them more relevant to viewers. As users grow weary of irrelevant ads, advertisers must prioritize contextual targeting to enhance the overall ad experience.
8. Video Ads
Video advertising remains a significant force in the digital world. By the end of 2023, advertisers in the U.S. are projected to spend almost $74 billion on programmatic video ads. In fact, video content makes up 65% of all internet traffic this year, proving its importance for impactful advertising. With automated video ad buying becoming the norm, brands should look into the top video ad networks to enhance their visibility and reach more audiences.
9. Mobile Gaming
The mobile gaming market is experiencing explosive growth, with the number of players expected to jump from 1.8 billion in 2021 to more than 2.7 billion by 2027. The rollout of 5G networks is improving the mobile gaming experience, which makes it more appealing to advertisers. Revenue from mobile gaming is projected to rise from $124.9 billion in 2022 to an impressive $222.7 billion by 2027. This growth opens up exciting opportunities for brands to integrate ads directly into games or show them as traditional banner ads.
