The Future of Advertising
Two hundred sixty-six billion dollars. That’s how much advertisers around the world are expected to spend on digital advertising this year, according to eMarketer. And in this just three short years from now, that amount is forecast to reach 376 billion dollars — a 41% increase.
In the past 20 years, every industry has gone through some form of digital transformation but few industries have been as heavily impacted as the advertising industry. In 1996, only 20 years ago, the internet was just starting to take off. This year, it’s projected that digital ad spend will officially surpass TV ad spend and very few questions if that trend has any sign of slowing down. There’s no question that technology will continue to shape the future of advertising. We’ve seen dramatic shifts in form and factor, powered by technologies such as 3D, artificial intelligence, augmented reality, and virtual reality. As the landscape continues to change, advertising that doesn’t follow suit risk getting left behind.
As the world around us continues to change, advertisers will be forced to follow suit or risk getting left behind.
Before the internet there really was no solid way to measure the effectiveness of advertising. Today, we can literally track the effectiveness of each ad published across millions of websites. We can not only make changes but test changes with concrete data. The rise of programmatic brought a whole new dimension to advertising.
Apple recently released its new operating systems, iOS 11 & High Sierra, which is causing a huge controversy in the advertising world for the new Safari feature blocking cross-site tracking. This threatens to make a huge dent on publisher revenues and advertiser effectiveness.
Not to mention we’ve had the tech freely available for years now to completely kill the advertising industry as it stands — of course, I’m talking about ad blockers. This is perhaps the scariest thing facing the future of the internet at the moment. Even Google is working on its own Chrome-based ad blocker which is sets to be released in 2018. Whether you hate ads or not, they pay for almost all your favorite sites to exist and create more content for you.
It’s clear the industry has changed drastically in the past 20 years but what does the future look like? What will the impact of all these new technologies mean for the industry? With that in mind, I’ve compiled a list of the most important trends that are shaping the future of advertising.
The future of advertising is becoming more dynamic and personalized
In this modern era where consumer attention is divided across more devices, applications and formats than ever before, only engaging and relevant ads will command consumer attention. Advertisers are creating content that engages their target audiences in ways that are most likely to command their attention — in feed videos in social media feeds, interactive banners in games in virtual reality headsets and native placements browsing popular apps. Across all of these formats, behavioral profiling technology allows advertisers to personalize these messages to their audience based on their browsing history, location, time of day and demographic profile.
From this trend, as advertisers, you should create content specifically designed for that formats that align with your audiences’ browsing behavior — this will ensure that your ads are engaging. Choose inventory that is interactive and collects rich data. Put systems in place that profile your audience and match your content to their interests and behaviors — this will ensure your ads are relevant.
The future of advertising will be more automated
Over 70% of digital video and over 80% of display ads are forecasted to be bought through automated channels this year. Programmatic advertising is no longer a silo or a distinct media channel — it’s simply how brands are buying ads. As a result, the focus is shifting from execution to strategy and better connecting marketing and advertising. With programmatic, the big lure for advertisers is its efficiency and effectiveness.
Automate as much of your advertising process as possible — configure your advertising mix so that as many channels as possible communicate programmatically with one another in real time. This prevents your channels from competing against one another and optimizes the efficiency of your ad placements — and make less work for you.
Still, advertising that comprises such elements as brand value, storytelling, and other more experiential tactics will always need a human driver. In an environment where programmatic makes things easier and more efficient, marketers are still going to need ways to make a splash or make a headline, and that’s where all of us across that chain can really be focused on innovation. Marketers will be free to experiment with new formats, new mediums, and new experiences, so we expect a lot of growth in breakthrough experiential advertising.
Today, advertisers are focused on a lot on the vanity metrics, like views, impressions, and clicks. But we need to figure out how far down the funnel these things are taking people. We feel like we are at a moment where we will see an ambition and a shift to emotional connection and the psychology of the consumer. That’s how brands will differentiate. — Jill Standish, CMO, National Geographic.
The future of advertising will still have room for agencies
Agencies are still essential in helping brands come up with big ideas that make emotional connections with potential customers. We believe that agencies provide strategic value through strategy, campaign execution, and scale.
There will be two key shifts in the brand-agency relationship. The first is increased collaboration. For brands to keep ahead of trends, we no longer have the luxury of multimonth creative planning sessions. More and more, we have to prototype work quickly based on design-thinking principles and getting it to the finish line in collaboration with our agency partners.
The second shift is growth in project-based work. As brands adopt a sprint approach versus a marathon approach, smaller teams working on specialized projects in a condensed timeframe will become a more prevalent mode.
Advertising agencies that make it to the future are those that can champion creative but also have expertise in strategy, consumer insights, and measurement.
The future of advertising will be more measurable
Marketers will have access to more data than ever before. We can track consumer across the internet and back. And the CEO is increasingly demanding we do just that. Measurement is crucial to demonstrating advertising’s value to overall ROI.
For example, experience-based campaigns are difficult to quantify but have a significant impact on the way consumers perceive a brand — we need to evolve the measurement model to align. In this particularly digital era — we have too quickly defaulted to what we could measure, things like clicks and visits and maybe even time spent. But they aren’t the only indication of success. I think as marketers what we really need to do is figure out how we bring those metrics together to tell a holistic story. An overall engagement score is much more useful than just focusing on one metric.
Indeed, as ad formats such as VR and AR grow in popularity, the ability to measure experiences in these mediums will become equally important. Facial recognition and biometrics have the potential to measure how people feel as they experience a product or a marketing campaign.
Advertisers will use measurement to not just understand campaign performance, but also to understand how a brand is moving people through a journey and how advertising is fostering that movement. Attribution will be key to understanding advertising’s impact — marketers are going to put more explanatory power around the upper-funnel metrics that are driving some of those lower-funnel activities.
Whether we like it or not, the audience erosion on traditional media is accelerating and will accelerate faster as the likes of Netflix and Amazon invest even more in content and steal audiences from traditional channels. The problem for digital media is trust, transparency, and accountability for results. We need to build the first two and show clients that outside of search and retargeting, investing in digital media can build brands and, most importantly, drive sales — Mark Read, CEO, Wunderman.
The future of advertising will be more intelligent
To date, advertisers have been using artificial intelligence to automate routine tasks and increase effectiveness through better optimization.
Imagine a media buying platform where a marketer can input goals — sales, new customers, loyalty program sign-ups — and a transparent algorithm does the rest, executing buys and optimizing every millisecond. Or imagine an ad that dynamically changes the tone of the voiceover based on the preferences of the viewer. The convergence of AI with human creativity and insight will transform advertising, and we’re just beginning to see what’s possible.
Artificial Intelligence (AI) is allowing us to create custom ads that meet people where they are. For example, if you’re looking at the weather, it’s serving up the ad in a customized way so it’s relevant to what you’re looking at — it integrates with a consumer’s path online and provides a more seamless way to experience the ad. But what’s going to be crucial to the success of AI is structuring it in a transparent manner that involves a partnership between parties. In other words, above all as advertisings, it’s crucial we’re clearly defining the value exchange and providing consumers with the opportunity to make an informed choice about their participation.
The future of advertising will be experiential
Earning customer’s brand loyalty through extraordinary experiences is a must for brands today. Advertising landscape with more immersive experiences will engage consumers on a deeper emotional level.
Emerging technology is going to give us a new understanding of the consumer journey and what triggers people to interact with a brand. Additionally, advertisers will have a heightened level of insight about what people think, feel, and do after they interact with an advertising.
New mediums like virtual reality and augmented reality and even mixed reality allow you to bring true experiences to consumers and meet them wherever they may be. We believe that virtual and augmented reality is the future of storytelling. How cool would it actually experience a story instead of just reading about it in a text? And how much more meaningful is that to an audience?
Ten years from now, the sheer volume of content and data will be overwhelming. Nearly everything will be connected; the internet of things will just be “things”, and the resulting vast troves of data will be the single most valuable asset marketers own. Savvy businesses will have plugged all of their marketing tools into the same data reservoir, creating a single source of truth that they use to deliver personalized advertising experiences.
The future of advertising is entertainment
As customers move to ad-free platforms, more brands will need to engage customers through long-form content. Consider The Lego Movie. The movie is the advertising.
Entertainment solves the interruption and credibility problem. Customer chooses to immerse with the content. They are not interrupted to watch it. Plus, with long-form content, the brand takes the customer through a journey as opposed to trying to sell them on a product.
Production companies are more likely to benefits as the brand will prefer to work directly with them. Some agencies might adapt to this scenario by building capabilities in-house. Big brands will start competing for attention that they can no longer buy.
The future of advertising is a platform
Customers are no longer buying products. They are buying experiences delivered via the products. The more a brand can make a customer’s life easier or better, the more customers are likely to engage and buy with the brand. No need for interruptions. The platform is the experience.
When you buy from Nike, you are buying into a system that makes it easy to stay healthy. It inspires and helps you improve your performance. Think the Nike+ Running App. This is the same model that Amazon and Uber are using to a certain extent.
We have already seen the system work for brands such as Nike. The brand owns the data, the relationship and the rules of engagement. The agency can play a critical role in helping brands develop the value proposition, design the system and communicate with customers.
The advertising industry is sure to change even more in the next ten years than it did in the last ten. Awareness of these trends in advertising will enable you to deliver relevant ads to targeted consumers while collecting thorough data — with whatever exciting new ad technology is available.
Stay on top of developments in advertising technology — but don’t overcommit. Avoid becoming too focused on any new individual component of your advertising mix. No matter how sleek a new piece of inventory looks or how thorough a new attribution report appears, each new improvement in technology will only be a component part of your overall advertising strategy. Remember — keep an open mind. The most successful advertisers in this data-driven future will be the ones who are willing to take risks on new channels, systems, and processes.
