Insights on Future Trends in Programmatic Advertising

Generative AI has the potential to completely remake the advertising and media ecosystem. The question is: To what end? What happens in a "post traffic" world? This was the topic discussed last week Human Ventures HQ (aka Casa Komos). Algorithms (AI) in the hands of the major platforms have shaped our information ecosystem and the attention economy for decades. And, in turn, have shaped society for better and, too often, for worse. This moment is either a chance to reset the role algorithms play in people's relationship to media brands or completely break media as we know it. Here are just a few of many insights shared (there are a lot more, but I hit the LinkedIn character limit. Will put more in the comments): “The keyword industrial complex is dead. Now it’s about intent with context—AI doesn’t think in keywords, it thinks in intent. How can you figure out the different need states of consumers as an agency or as someone working with a brand? How do you build content for that? Optimizing these channels and building brand agents are the next thing. The future will be about optimizing content and answers for the LLMS and brand agents to interface. It’s no longer about winning Share of Voice. We are entering a world where a brand needs to win Share of Model.” Joel Lunenfeld, Publicis “A lot of people are blaming AI for weaknesses that have existed in business for a long time—the audience has come last because you had to write for algorithms and then because of the way of the system you had to have a terrible user experience. So it’s going to be publishers treating themselves as brands and getting back to brand marketing. And that part I think will do quite well.” —Brian Morrissey, The Rebooting ”We’re all at the same starting line. If anyone feels like they are ahead or that they have it all figured out, I think you’re BS-ing us. Some people are going to be sprinters, some people are going to be long distance, some people are going to come from the outside, some people are going to fall—some people are going to get to the finish line and some people won't. We’re at a time and an inflection point where we need to share and learn from one another.“ —Sherry Phillips, Forbes “The whole customer discovery process has changed. As a marketer and an advertiser, we need to figure out how to get in the middle of the discovery process. That’s our job. to become part of that process. And if we’re not talented enough to figure that out, then we shouldn’t be in the business we’re in. So how do you actually create content? How do you actually create interactions? How do you create discovery engines? How do you create agents that actually bring value and trust between you and your consumer? That's ultimately where you need to go.” —Bob Lord, Horizon Media “If keywords are dead, does that mean block lists are dead too? Because that would be great for us. And those words are crazy because there's how many of them now right?" —Jessica Sibley, Time

The more I have conversations with people on the technology side of programmatic the more I'm struck by how people under-appreciate the impact of cookie depreciation and what it will mean for the attribution side of the business. Simply put, when cookies go away a majority of brands are going to see a major "increase" in their Cost Per.... Acquisition.... Action..... etc... etc. Agencies will be sitting in meetings trying to explain "why" campaigns are "less effective." Of course, campaigns won't be less effective. It's just that less will be quantifiable, which will lead to knee jerk movements to quantifiable channels (search & social). This will have a meaningful impact on spend patterns and provide short-term benefits to those platforms. (Meta, Google, TikTok, Pinterest, SNAP). It will not have a meaningful business impact. Smart brands and forward thinking agencies are adjusting for this now by reworking attribution models and actively filling the gaps in the ecosystem. However, I suspect less than 20% of the industry will be prepared. #datadriven

#AI, #retailmedia, and #CTV are shaping the future of digital advertising in 2023. GroupM's 2023 Global Mid-Year Forecast sheds more light on this trend. As we cross the midpoint of 2023, we continue grappling with high inflation and shifts in consumer behaviors. However, looking forward we anticipate a resurgence of normalcy in the trajectory of advertising revenue growth. ++ Key Highlights ++ 🔎The forecast suggests mid-single-digit advertising growth over the next 5 years. 🔎Global advertising in 2023 is expected to total $874.5 billion, and there's an ongoing trend of normalization expected in the global economy in the latter half of 2023 and 2024. 🔎The top 25 global ad sellers account for 75.3% of the total ad revenue in 2023, an increase from 74.0% in 2021. ++ Key Themes in the Industry ++ 📍Data Privacy and Regulation: Regulations tied to data privacy, national security, competition, and freedom of speech are increasingly impacting tech giants and advertising platforms, changing the way we collect and use consumer data, and affecting our advertising strategies. 📍Connected TV (CTV) Emergence: Between 2023 and 2028, we're looking at an impressive 10.4% compound annual growth rate in CTV ad revenue. 📍The Rise of AI: You might recall when we began dabbling with AI in our advertising efforts. Today, AI is projected to inform or touch at least half of all advertising revenue by the end of 2023. 📍Retail Media Momentum: If we revisit the numbers I shared on the retail media landscape, it's clear this channel has been on a roll! Set to grow 9.9% to reach $125.7 billion in 2023, retail media is expected to outpace TV ad revenues by 2028. ++ 🔭 Looking Ahead; Tips on 2024 Digital Ad Budgets ++ 💡Focus on Data-Driven Decision Making Allocate your limited resources effectively by using data analytics to understand where your audience is spending time online, which platforms have the highest ROI, and which strategies are driving the most customer engagement. 💡Prioritize Privacy Compliance With the growing regulatory changes tied to data privacy, ensure that your strategies are compliant. Invest in consent management platforms, and work with data providers who prioritize privacy. 💡Invest in Connected TV (CTV) With the rise of CTV adoption and its projected 10.4% compound annual growth rate in ad revenue between 2023 and 2028, it's important to allocate a portion of your budget to this rapidly growing channel. 💡Leverage AI for Improved Efficiency As AI is expected to inform or touch at least half of all advertising revenue by the end of 2023, consider how AI can help streamline processes, optimize your campaigns, and provide better insights for decision-making. 💡Capitalize on the Growth of Retail Media Include last-mile delivery services in your advertising strategy and find ways to engage your audience in these channels. Follow #ecommert to track insights on  #ecommerce,  #strategy and #sales #growth.