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The early 2020s have been a time of great change for the advertising industry. As our lives become increasingly online, the advertising industry is following suit. Global digital ad spend has increased by 8% over the past two years and is projected to grow by over 10% in the next two, which would put digital ad spend at around 68% of all ad spending. New programmatic advertising trends and adoption rates for new channels are on the rise, as well. OTT and CTV are projected to see 32% growth in the same time span.

Advertising has always met potential customers where they are. Brands that are slow to adapt to the changing landscape may suffer because of it.

In addition to the growth in digital media spending, the digital revolution has also affected consumer behavior and decision-making. As consumers are exposed to more options online, they no longer only base their purchasing decisions on the best deals or quality of the product.

The number one trend in consumer decision making right now is brand values. 88% of customers want to learn about a brand’s values before purchasing and 66% have stopped buying from a brand because of their values.

Purchasing decisions have increasingly become an extension of a consumer’s personal identity. Brands will do well to include value propositions beyond product quality and value in their advertising campaigns.

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We Have the Technology: Programmatic Trends Driving the Future of the Industry

A critical factor in the ad industry’s increasing reliance on digital has been the development of tech in programmatic advertising trends. Global programmatic budgets are expected to increase by over $300 billion in the next four years. While programmatic has historically been most popular in the US, we are starting to see rapid growth in countries across the world.

Personalized Ads

A primary reason for programmatic’s growth in the industry is its ability to personalize ads to the user. Like consumers’ increasing focus on brand values, there is also an increasing expectation that ads are personalized to meet each user’s specific needs.

Programmatic advertising excels at finding the optimal channel and inventory on which to serve ads. Dynamic ads can tailor the specifics of each ad to the user’s location and preferences. Increasingly niche audience targeting is available as well, allowing brands to serve ads to users with specific personal values or behaviors that fit the brand or product.

Generative AI

One way advertisers are addressing consumers’ need for personalization is via generative AI, which uses machine learning to find the optimal ad to serve to a user based on past behavior. Some advertisers are using it to make decisions about campaign structure and budget more quickly and responsibly than ever.

The past year has seen a surge in AI tech, which has left some businesses excited about its potential uses and others terrified of its implications. Lawsuits surrounding artificial intelligence are already popping up, including artists suing AI content creators for stealing source material. This is a situation in which technology has developed much more quickly than legislation, meaning advertisers and brands need to be careful with how they implement it.

To gain more insights into the current state of AI in digital marketing, peruse the following resources:

Privacy Restrictions

Another trend affecting the industry is consumers’ concerns over privacy and how companies handle their personal data. As more information about data collection practices has come to light, 80% of Americans have expressed concerns over how companies collect their personal data.

Legislative bodies have taken notice, as well. Some personal privacy laws already exist, like California’s Privacy Rights Act (CPRA) and the EU’s General Data Protection Regulation (GDPR). It is expected that by the end of 2024, 75% of the global population will have their personal information protected by privacy regulations.

Cookieless Future

As part of the emphasis on data privacy, web browsers like Firefox and Safari have eliminated the third-party cookie. While Google has extended its deadline twice and doesn’t plan to eliminate cookies until the end of 2024, savvy advertisers and publishers are getting ahead of the curve by emphasizing first- and second-party data.

Brands and publishers have added incentives like discounts or exclusive products for users who create accounts with them, which entails voluntarily providing personal data like email and physical addresses. Using first-party data to retarget users has been a staple of a good advertising strategy for years, but publishers are increasingly selling their own first-party data to create an additional revenue stream. This data is referred to as second-party data, and its value will only increase as the industry moves away from third-party cookies.

The entire industry is facing this problem together, and the next few years will see a massive reduction in internal data silos as advertisers and publishers both take advantage of their symbiotic relationship.

In addition to the use of first- and second-party data, advertisers are also combining machine learning and AI with their brand’s first-party data to create advanced lookalike audiences that both replace third-party audiences and provide a more relevant audience pool than what currently exists via third-party segments.

Contextual and keyword-based audiences are also becoming more advanced as AI develops, giving advertisers more control over where their ads are served.

To learn more about what the cookieless future means for programmatic, read our white paper on Programmatic Advertising in a Cookieless World.

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Tying It All Together: Programmatic Advertising Trends

The world of programmatic advertising trends has always been one of constant change, and there is no better example than the time we find ourselves in now. Having a mindful approach to integrating AI into your campaign strategy will be key to navigate challenges like the cookieless internet and data privacy restrictions. Brands must both be willing to take risks and be flexible enough to adapt to the changing paradigm or risk being left behind.

The programmatic landscape will continue to shift, but your brand doesn’t have to feel the brunt of the changes. The ecommerce experts at ROI Revolution are dedicated to helping brands save money, grow profitably, and reduce risk. To see how your brand can uncover untapped opportunities to exceed your goals, send a message to our team today.