Insights into Ad Tech for 2018
Ad-tech has always been a dynamic and evolving industry that is continuously changing. In 2020, global spending on digital advertising is expected to touch around $336 billion, up from $229 billion in 2017, according to market research firm Statista. While the best advertising technology helps to enhance digital advertising campaigns, given the growth of mobile, we should identify which platforms and trends we need to stay on top of and invest in.
Four emerging trends that should play a big role in reshaping ad-tech this year:-
Mergers and acquisitions have been one of the key narratives in Ad Tech in recent years, with maturing publisher and distribution businesses seeking out additive revenue and exponentially build up their core products.
Aggregation for scale and diversity of technology:
Scale is how independent players will compete with companies like Google and Facebook which currently hold 70% of the digital spends across the ecosystem, so expect to see more deals that aggregate billions of users for advertisers to compete against these behemoths.
A few specialized players will succeed:
The current ecosystem is saturated with companies that are focusing on or operating in the same space. This should ideally lead to the market to see new start-ups emerge that power new technology and have a differentiated offering for example advancement of native advertising not only within content and news but also mobile-specific products like messenger apps, games etc.
Need for profitability :
With the previous investments in Ad tech not reaping significantly heavy rewards for investors, the focus for an organisation has now shifted to sustainability and profitability to keep an organisation healthy and risk free. Those who succeed in maintaining a profitable standard but are low on scale would look to partner or merge with larger organisations to look for better growth prospects collectively.
Increase in transparency :
Market Consolidation may result in the marketers gaining cross-partner and cross-channel views of effectiveness. Consolidation also fosters collaboration; eliminates hidden fees, fraud, and waste; and creates the efficiencies needed.
Eg: InMobi’s $90m purchase of AerServ. Denstu Aegis Network acquiring Sokrati and SVG Media over the last 12 months have shown us intent in these directions.
E-commerce players like Amazon and Flipkart would give the likes of Google and Facebook a run for their money. With first-party data available with these e-commerce partners, a bullish trend could be seen in acquisitions and investment by these giants as well.
BLOCKCHAIN WILL ADD TRANSPARENCY
As brands are become increasingly vigilant about social responsibility and online security, block chain should take up center stage to help brands maintain their brand sanctity. For brands that actually have a positive story to tell, block chain should be a valuable way to receive transparency and to build a brand image in a way they never could before.
Block chain, basically, is a globally distributed ledger, which records every touch point of a transaction or business interaction in a public domain chronologically, making the entire process transparent and accountable, secure and, by process protocol, trustworthy. By publicly storing data to create a permanent audit trail with a record of all transactions that occur within the programmatic marketplace, block chain has the ability to provide marketers with a highly secure trading network. It has records of all the transactions which ensures that only fair charges are taking place throughout the ad-buying and selling process in order to reduce, or even eliminate, hidden costs or fees from multiple intermediaries within the ad-buying supply chain. Reducing immediate costs to the marketers or brands and publishers, positively impacting their costs.
Block chain not only has the potential to increase transparency over ad expenditure, it can also work to eradicate various other issues currently ingrained in the programmatic space. For example, the technology can also help to improve the viewability of digital ads and allow advertisers to record exactly where their ad campaign is being delivered and whom it is reaching.
In short the technology in question not only is reducing the average spends of an advertiser but also brings in the much needed transparency a brand has been looking for, making block chain a technology of choice for the ad tech ecosystem in the current year.
FOCUS ON ALL THINGS DATA
Data will continue to be a vital asset to all within the Ad-tech stack. Even with GDPR and the associated changes in Europe, data will remain a key asset both demand side and supply side.
In addition to Ad-tech providers looking to increase the size and scope of their data pools, clients are increasingly looking to create their own centralized ‘insight’ platforms, tightly integrating advertising data into their broader ecosystems. The key focus this year will be not just on collecting ever more data but instead on connecting data silos — using the vast troves of data already held by Ad-tech providers and clients more efficiently by connecting the dots between different data sets to identify new opportunities and insight.
With an Omni-channel strategy, brands can better achieve the need to create a seamless customer experience across all channels. By using one platform to run campaigns across all channels, brands can understand through consistent measurement which channels are performing well, thus enabling them to maximize their return on advertising spend.
FRAUD COMPLEXITY AND RISKS
Security is a huge concern for everyone, especially when it comes to online transactions. The increasing number of cases of fraud, hacking and unauthorized personnel access to data poses a significant risk to all businesses. The online advertising industry has evolved to become a tangled mess of algorithms, virtual real-time platforms, and exchanges all competing for consumers’ fragmented attention. The bad guys are selling ad spaces on websites they don’t have access to, and on fake versions of authentic sites. The problem is real and it’s serious. In fact, ad fraud cost companies a staggering $7.4 billion in 2017, according to Digiday.
Initiatives like ads.txt, which is led by the Interactive Advertising Bureau Tech Lab (Iab), is working to help to identify approved ad sellers and ensure that companies don’t buy fraudulent ad space. To date, ads.txt have helped cut down on fraud, and the next frontier is domain authorization at the impression level. As of January 2018, 70% of top publishers have already implemented ads.txt. Right now, ads.txt can tell you whether a particular domain is authorized to sell a publisher’s inventory. But, at the impression level, real-time authorization does not yet exist. This could change in 2018, as the industry starts cracking down on domain spoofing and gains more control over how and where inventory is sold.
There will be undoubtedly other trends that will emerge in the coming year, these four trends are certainly shaping up to impact the ad tech space in a big way. With the industry’s rapid pace of growth, one overall fact is clear: the ad tech market will continue to evolve rapidly and reshape the way publishers do business in new and exciting ways.