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Blog 3 Major Trends in Programmatic Advertising, Right Now

3 Major Trends in Programmatic Advertising, Right Now

Posted on Sep 30, 2019

By Platform161 Business Development Director Jonathan Barkan. A version of this post originally appeared in Dutch in Frankwatching.

We are facing more and more challenges in online advertising. Or so it would seem from recent news, from GDPR to Apple’s Safari browser blocking the use of cookies, In this article, you can read about three such developments in the online advertising industry, that everyone is talking about.

But what evidence are we basing these trends on? DMEXCO 2019 took place in Cologne earlier this month. To some, it’s known as ‘ad tech wonderland’ – the event of the year, a chance to meet all types of colleagues – old and new – sign new deals and hopefully also move the industry forward.

The Platform161 team was there, and the three following points are the ones that came out most loudly from conversations at the event itself. Below, I will summarise what I found, learnt and understood about the current state of online advertising from the industry’s biggest annual gathering:

1. Bigger isn’t always better

Just as programmatic in the past may have focused on scale over quality, so the scales are hopefully starting to rebalance.

Many have commented on the fact that this was a somewhat smaller gathering than last year. Apparently still around the 40,000 mark though, so nothing to be sniffed at.

And here’s why we should actually see this as a positive: up to this point, an abundance of venture capitalist money arguably allowed average, or undifferentiated companies to exist, while throwing money at entertaining clients. With the majority of that funding no longer there, what we now see at events like this reflects a sector in which quality has finally started to float to the top.

Just as programmatic in the past may have focused on scale over quality, so the scales are hopefully starting to rebalance. Even if that means running successful campaigns is more difficult, or competitive than before, I would argue ultimately this is a plus. Arguably, it opens the way for genuine innovation, and more customized, smart approaches – over simply splashing the cash. What do I mean by customized? One example might be adding own (first party) insights and data to your bidding algorithm, then tying that to metrics relevant to your specific business.

For example, we developed a custom cost predictor for an organization from the tourism sector. Based on their own unique data, seasonal local events, historical bookings and multiple local sources were all added to the algorithm of the programmatic bidder. This probably all sounds quite a logical, but you’d be surprised actually how uncommon such a specialized approach is in the programmatic space right now.

2. Move Slow and Mend Things

In short, we may no longer be in the age of explosive programmatic growth – but that may in itself be an impetus for positive innovation – for a smarter, more mature approach. Instead of Facebook’s infamous mantra, ‘move fast and break things’, our focus should now be on sorting out challenges that have been there in embryo from the start – such as transparency, rock solid data protection and online identity – as discussed below.

On a related note, if I could summarize this year’s DMEXCO event in one word, it would be trust. Everywhere you turned, you heard someone or saw something mentioning this topic. Advertising is facing greater scrutiny, and effectively being forced to raise the bar around privacy and data protection. With GDPR in place for European users, and the US also increasing its focus around legislation, the challenge for the industry is to balance user trust, and gain informed consent, while also enabling advertisers to reach their audience in the way they’ve become accustomed to.

What does this mean for people on the ground exactly? Be flexible, be open to new solutions and ways of working and always interrogate what partners tell you. For example, they might say the data you are using is legitimate, but do you know 100% where it came from, and with freely given consent?

3. A Case of Mistaken Identity

A closely related topic that was on pretty much everyone’s lips in Cologne was the state of online identity. And this is largely because of the restrictions Apple’s Safari browser has placed around the use of third-party cookies. The consequences of which are that all types of targeting, including retargeting for Safari users are extremely challenged. While it does appear that Google, which controls the majority of the browser market with Chrome, is unlikely to follow suit, the question remains whether the cookie will ultimately prevail in future.

Ultimately, marketing and advertising is a game of building successful relationships. And unless advertisers can do so confidently – whether through frequency capping to avoid pestering potential customers, or just by showing them more relevant ads – as they have done in most cases up to this point with the help of cookies – the whole exercise becomes extremely difficult.

And following on from that question, what might replace them? In the ‘offline’ world, we have identity cards and passports – but is a digital equivalent required? Some in the ad industry think so – ID5 and the IAB Tech Lab’s Digitrust are just two such initiatives.

Relationships still matter within the business too. And the endurance of DMEXCO itself is proof of that. In an industry that prides itself on automation, real-time bidding and artificial intelligence, people and relationships still drive us forward. Although advertising campaigns can feel purely transactional, there is still a lot of hands-on work being done both on the demand and supply side of the equation to keep advertisers and publishers happy. Trust and transparency ultimately really do make this world go around – and it’s a huge positive to see those themes now headlining the industry’s premier event.