Opinions

5 Predictions for the digital advertising industry in 2014

Posted by Bob Lord on December 4th, 2013 at 7:00 am

Digital advertising is going through enormous transformation. Marketers now have access to a seemingly infinite array of technology tools and solutions for identifying,reaching and converting audiences online.  But they are, at times, overwhelmed by that sheer number of technology choices available and struggling to piece them all together.

Thus, in 2014, we will see marketers gravitating towards technology platforms that greatly simplify and streamline the buying and selling of online advertising. These platforms will also provide marketers the ability to have “one view” of the customer regardless of the screen on which the ad is being served.  We should also expect a world where advertisers have access to more immersive advertising experiences that inspire consumers and drive significantly greater engagement and commerce.

Here some of the specific predictions I believe will take hold in 2014.

1. Automation will take hold. As automated, or programmatic, advertising technologies replace unwieldy manual media planning and buying processes that eat up too much time and overlook critical consumer data, more (human) resources can be directed toward the creative side of the house, and toward engaging and effective advertising that drives commerce, for example, native advertising, sponsorships, take-overs and other strategic initiatives.

Automation is a win for web publishers as well.  Programmatic advertising does not mean publishers need to put their inventory up to the highest bidder.  It simply means they can make it accessible via a technology platform that makes it easier for buyers to access it while still setting premium pricing.  Programmatic advertising is about automation, not auctions.

Bottom line: sophisticated technologies will serve to complement and enhance the creative talents of humans by freeing up their time that has – to a great degree – been occupied by rote tasks such as completing insertion orders for ad buys.  Projections put about 22% of all digital media being automated next year – up from just 4% in 2010.

2. Open ecosystems will succeed. Both Wall Street and Madison Avenue have run out of patience for niche ad technologies that are product features masquerading as point solution companies. Look no further than the recent massive sell-off of stock from specialized ad tech vendors. For too long, the industry has asked marketers to manage multiple relationshipswith up to 40 vendors to execute online advertising.  This is a significant deterrent for digital investment as it creates more work than value for already resource-strapped agencies and marketers. These closed systems that force marketers to stitch together a patchwork of feature companies will lose, and a small number of open ecosystems that these feature companies can pluginto will emerge to streamline agency and marketer workload. We’ll see industry consolidation continue in 2014 and witness the rise of open platforms that will make media planning and buying a whole lot simpler for all involved.

3. Mobile will drive sales for marketers. 2014 will be the year that marketers demand device agnostic advertising. Desktop display growth has been leapfrogged by the smartphone and tablet, moving multi-screen advertising into the spotlight. The Association of National Advertisers and Nielsen just reported that by 2016,about 50% of digital advertising will be multi-screen.  We see this trend already in our business with about 45% of all clients running multi-screen advertising. Innovations and technologies – such as new targeting capabilities and new uses of data that empower marketers to gain a single view of the customer across all screens are leading this movement, because ultimately, a cross-screen strategy will drive the highest return for marketers.

4. Premium advertising will get more premium. 2014 will be the year when immersive advertising experiences that tie directly to a transaction will begin to flourish on the Web. As automation kicks in and time is given back to agencies and marketers to be more creative, we will see an industry call for more premium opportunities that goes beyond banners and gets much more sophisticated and customizable. Whether it’s a new live advertising execution (think Oreos response during the 2013 Super Bowl blackout) or a commerce campaign that drives sales through location based content, digital advertising will be remarkable, unique and experience-based.

5. Operational convergence will drive strategy. Technologists, creative art directors, and content producers can no longer operate in separate silos.  With more consumer data being generated than ever before, marketing, data, and technology must be aligned. As this convergence accelerates, more holistic and integrated businesses will emerge and outperform their competition.

I’m confident that these big shifts in the industry will result in relationships between brands and consumers that are more transparent and based on the exchange of real value.

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