As publishers and advertisers prepare for the end of the third-party cookie era, they’re looking for ways to reach customers with the right ad at the right time. Programmatic advertising, which automates how ad space is bought, sold, placed, and optimized, is emerging as a very attractive option. It’s already been growing by double digits. By the end of 2023, spending on programmatic ads is expected to exceed $200 billion in the U.S., comprising 54% of U.S. media budgets.
Since automation is such a key component of programmatic advertising, we’re keeping a close eye on the automation trends that will power this growth. From advances in blockchain, artificial intelligence (AI) and machine learning (ML) algorithms to new areas to leverage programmatic advertising, here are the top 8 automation trends to watch in 2023.
1. Blockchain Prevents Advertising Fraud
Marketers are already finding applications for blockchain in advertising, from data storage to validating users. Blockchain, an immutable record of transactions, can help publishers and advertisers avoid advertising fraud and prevent false impressions. While blockchain is still in its early stages for advertising applications, it has the potential to screen out bot traffic and unwanted content. Combined with automation, it could be used in real-time auctions to score better positioning for advertisers and more revenue for publishers. Currently, blockchain cannot handle the transaction volumes associated with real-time advertising applications, at 4.6 transactions per second compared to over 200,000 transactions per second for non-blockchain applications.
Additionally, when combined with ML and device information, blockchain also could analyze user behavior in non-realtime, potentially stopping false impressions from bots. This would provide a more accurate measurement for advertisers and publishers and make guaranteed impressions a fair payment method.
2. Increased Observability Through Carbon Tracking
As more companies work toward reducing their carbon footprint, carbon tracking will not only help them achieve their sustainability goals but also provide more observability. Since the challenges, as well as the technology and ecosystem evolution required to properly track carbon are largely the same, observability and transparency will increase as a result of this focus on corporate responsibility and sustainability.
3. Advertisers Reach More Channels
Leveraging AI-driven ads through programmatic advertising lets brands reach customers through new channels and allows publishers such as podcasters to monetize their operations. With the number of channels available to display ads, AI helps advertisers better target their ideal customers.
Meanwhile, programmatic advertising spend on podcasting is expected to triple by 2027. Podcasting is one of the few channels that will be minimally impacted by the demise of the third-party cookie. Podcasts are also very targeted, allowing advertisers to reach niche markets. But ad load is low, so advertisers will actively seek publishers to reach these consumers.
4. Removing Bias from AI Algorithms
One issue that has cropped up with AI is unconscious bias coded into the algorithms. According to a recent study, 54% of leaders are concerned about potential bias in AI, and 81% would like the government to regulate it.
As AI continues to evolve, it will undergo more extensive testing. Diverse teams working on algorithms will also help avoid unconscious bias, allowing for more accurate modeling and decision-making. This will enable programmatic advertising to reach its intended audience rather than guessing and potentially missing the mark – or worse, resulting in a public relations crisis.
5. Even More Targeted Audiences
The end of the cookie era might seem concerning, but automation in programmatic advertising will more than make up for it and allow for highly targeted marketing. As AI and ML become more sophisticated, programmatic advertising will be able to engage mobile and CTV audiences, as well as traditional web users, at scale and provide better results for advertisers – even better than cookies, but without the privacy concerns.
6. OTT Advertising Continues to Grow
Over the Top (OTT) advertising – also known as streaming TV ads – saw 57.4% growth in 2022 and is expected to reach $2 billion in 2023. Automation in programmatic advertising will fuel this growth, as it helps match advertisers with publishers at the right time for the right price. As more consumers cut the proverbial cord and use streaming services, and publishers launch new channels, OTT advertising presents an opportunity for both advertisers and publishers to increase revenue and, for advertisers, continue the trend of hyper targeting audiences to ensure ads resonate with viewers.
7. DOOH Advances Forward
Now that people are getting out of their homes post-pandemic, advertisers are looking for ways to reach them. Digital Out of Home (DOOH) advertising is making a comeback, with digital ad screens popping up at transportation hubs, shopping centers and gyms. Programmatic advertising can help advertisers reach a larger audience in the right context. Automation will help advertisers leverage data to ensure their ads are appropriately targeted and presented.
8. Demand Path Optimization Surges Ahead
Automation is also closing the gap between advertisers and publishers, connecting them efficiently and transparently. In the next year, programmatic advertising will see more supply side based AI/ML optimizations to link buyers to publishers, and vice versa, eliminating waste and providing full observability. Advertisers will see an increase in performance, and publishers will realize increased revenue.
If you’re a publisher who wants to stay ahead of this trend, check out our Smart Path Optimization technology which works across the supply path and the demand path to ensure both supply and demand have improved outcomes.
The good news for both advertisers and publishers is that just because the third-party cookie era is coming to an end, reaching the right consumers at the right time isn’t. Automation in programmatic advertising will make it very attractive in 2023, and these 8 trends will only improve how advertisers and publishers reach their target audiences.