9 Programmatic Advertising Trends You Need To Know

The decline of third-party cookies has raised some pertinent questions about the future of programmatic systems, which have expanded rapidly over the last two decades.

While programmatic advertising is set for an evolution, it will nevertheless retain its role as an essential digital marketing tool.

US advertisers programmatic ad spend amounted to $106 billion in 2021, a 41% increase year on year, with eMarketer forecasting that this will rise to $123.2 billion this year.

Let's look at which programmatic advertising trends are likely to gain traction in the year.

9 Recent Programmatic Advertising Trends

The programmatic advertising space has not only been affected by the COVID-19 pandemic but also by the rise of privacy-first initiatives. These initiatives are aimed at giving users greater control over their data, which is the lifeblood for most marketing campaigns.

Global digital ad spending, however, is projected to increase from an estimated $571.2 billion this year to more than $785 billion by 2025, according to eMarketer. This suggests that marketers remain confident in the reach of digital advertising.

Below are some of the programmatic advertising trends that have emerged in recent years and are likely to be part of the further growth in digital ad spend in the coming years.

1. In-Housing Programmatic Campaigns

Only a few businesses managed their programmatic ad buying 10 years ago. The situation today, however, is much different.

More than two thirds (69%) of marketing firms have either entirely or partially brought their programmatic campaigns in-house, according to the Interactive Advertising Bureau’s (IAB) review of the global programmatic market in 2020 (PDF download).

The move has been driven by companies' desire for greater transparency within the programmatic process, so they can strengthen their marketing strategies.

Other advantages of in-house programmatic advertising include cost savings and resource efficiency. Removing the costs associated with third-party management of services and data, means companies are able to reinvest more heavily in active marketing campaigns. This should, all things being equal, lead to a higher return on ad spend (ROAS).

2. Sunsetting Cookies and First-Party Data Solutions

Marketing without third-party data is on its way, implying that the programmatic advertising process will need to find reliable workarounds.

New privacy legislation, such as Europe’s General Data Protection Regulation (GDPR) and the California Privacy Act of 2018, has made it more challenging to use tracking cookies to target and modify ads based on online user behavior.

This new legislative framework dismantles long-standing techniques of tracking user behavior while allowing advertisers to obtain user data with their consent.

Apple and Firefox have ended third-party cookie support, with Google to follow in 2023.

Google has already started working on identity solutions, most recently launching the Topics API in January 2022. Topics is designed to identify a handful of user interests, via the Chrome browser, which represent their top interests for that week. These interests are then used to pool users into anonymous groups for advertising purposes.

The API was born out of Google’s now canceled Federated Learning of Cohorts (FLoC) initiative.

Shared user IDs have also been hailed as another viable workaround to the end of cookies. The Interactive Advertising Bureau’s (IAB) DigiTrust service tried to spearhead this, but eventually became financially unviable.

Meanwhile, the Unified ID 2.0 (UID2) open-source framework was developed by Trade Desk in response to Google’s move to sunset cookies. UID2 requires users to provide consent in the form of an email address.

First-party data offers tremendous value to both publishers and advertisers—so while the amount of available data may shrink, the quality of said data will improve in the long run.

3. Growth of Connected TV (CTV)

Connected TV (CTV) programmatic display ad spending in the US is projected to climb to $8.88 billion in 2022 from an estimated $6.93 billion in 2021, according to Statista.

The COVID-19 pandemic prompted more people than ever to pay for over-the-top (OTT) video services such as YouTube TV, Apple TV+ and Netflix, resulting in a 41.2% increase in US streaming revenue in 2020.

You can see this change in media habits globally. For example, in the UK, TV viewing and online streaming increased dramatically during the pandemic's peak in 2020.

While streaming services have traditionally been subscription-only, ad-free models, this may not be the case for long. Disney announced in March 2022 that it planned to launch a cheaper, ad-supported tier to its Disney+ subscription model this year. And although Netflix CFO Spencer Neumann has said his company has no plans to follow suit, he added “never say never”.

This makes the segment one of the most intriguing programmatic advertising trends to watch in 2023.

Those in the advertising industry need to pay attention to the procurement process, methods and measurements that need to be reevaluated. CTV programmatic display advertising may still be in its infancy, those who adjust now to stay ahead of the curve will reap the rewards.

4. Advancement of Digital Out-of-Home (DOOH) Ads

Following a difficult couple of years for the medium, owing to government mandated stay-at-home orders in response to the pandemic, marketing professionals are looking for innovative methods to target customers who are back on the go, and DOOH is resurgent.

DOOH ad spend in the US is expected to reach $2.58 billion in 2022. With an increase of digital screens for ads popping up across the country, programmatic strategy appears to be positioned to take a larger share of that spend in a few years time.

This type of programmatic advertising has a number of benefits, including:

Broad reach
Resistant to ad blockers
Unobtrusive placements

This media newcomer should benefit in the cookie-free future because of its different methods of audience targeting and the chance it gives for contextual marketing to take center stage.

Brands that use programmatic DOOH can create memorable, eye-catching experiences that will leave a lasting impact on customers.

5. Rise of White Label Software

A white-label software is a generic piece of software built and marketed as a service to businesses. Businesses can buy access to a white-label advertising platform to give them administrator level control of their ad campaigns.

This not only increases the control brands have over their campaigns, but also provides transparency to the ad buying process. This ties in with the IAB report mentioned above, which found companies are increasingly looking to in-house their marketing campaigns.

For many companies in search of greater programmatic control, the white label software as a service (SaaS) model is likely to be a better and more affordable starting point than developing bespoke platforms.

6. Programmatic Audio

Programmatic audio advertising works in much the same way as programmatic display advertising, automating the sale of ads in audio content such as podcasts.

You can buy targeted ad inventory from audio publishers via a single system. This paves the way to tap into listeners from across a range of devices, including:

Desktops
Laptops
Smartphones
Tablet
Smart speakers

Audio ads differ from TV and display ads in that they do not rely on visual engagement. As a result, digital audio can reach consumers in a way that visual advertising can't.

While music can evoke different feelings, the podcast experience can be likened to listening to a friend. The US audience for podcasts has been growing consistently in recent years, reaching a peak of 41% of the population in 2021, according to Edison Research.

While that figure is projected to slip to 38% in 2022, with people returning to work in the wake of the pandemic, this number is still higher than the 37% recorded in 2020.

Moreover, additional research from 2021 shows that 80% of podcast listeners will listen to most if not all of an episode, making them a lucrative target audience for programmatic audio advertising.

Another bonus aspect is the fact that most audio commercials cannot be skipped. Because there is no ad blocker for audio advertising, your ads will receive more exposure.

7. Contextual Advertising

Contextual targeting is a fairly straightforward method of advertising. However, it is still one of the programmatic trends that you should keep an eye on, given the aforementioned death of cookies.

The importance of contextual targeting in digital advertising is only set to grow, given that ads are placed based on the context of the website rather than a user’s online behavioral data.

You can assume—rather safely—that anyone seeing your ads will be more interested in them owing to the web page’s context.

Users have become tired of seeing irrelevant ad creatives in the wrong places, leading to the rise of banner blindness. So, advertisers must improve the ad experience by using more relevant and personalized ads in the appropriate context.

8. Video Ads

Video ad spend continues to rise year after year and for good reason. Video consumption is projected to reach 82% of consumer internet traffic this year (PDF download).

US advertisers are projected to spend almost $43 billion on programmatic video advertising this year, up from an estimated $36 billion in 2021.

Video remains the most popular media type for high-impact display ads.

With programmatic video spend in the US expected to account for a majority share of total programmatic digital display spend this year, it's safe to say that automated video ad buying is now the standard for distributing digital video commercials. If you are looking to switch to a video ad network, check out Publift’s guide on best video ad networks.

9. Mobile Gaming

The number of people that play mobile games is projected to rise from around 1.8 billion in 2021 to more than 2.3 billion by 2026. The uptick will be buoyed by the arrival of 5G networks, which promise faster data transfers and increased connectivity.

Until recently, however, there was a widespread belief that mobile gaming audiences were either too small or too niche for big companies to be interested in. That viewpoint has shifted.

Mobile gaming revenue is expected to climb from a projected $124.9 billion in 2022 to $174.6 billion by 2026.

At the same time, the average revenue per user (ARPU) in the mobile gaming segment is projected to hit $64.66 this year before climbing to $75.6.

The mobile gaming landscape has transformed into one that advertisers should begin focusing their digital ad spend on.

Ads can be integrated directly into the game by allowing users to gain tokens or coins when they watch the commercials, or they can appear at the bottom of your game screen in much the same manner as traditional banner ads.

As such, brands not already participating in this space need to begin considering a possible entry as well as which gaming ad networks would meet their needs.

Final Thoughts

Marketers can utilize programmatic advertising to better direct their campaigns across targeted channels. They can use automated systems to help reach the most desirable markets and demographics, while using new data to discover new opportunities.

If you're not already using programmatic ads in some capacity, you're missing out on the opportunity to save your brand money and improve the results of your online advertising campaigns.

This year will see marketers get back to focusing on these programmatic trends and tapping into new opportunities created by the pandemic—for instance, rise of connected TV, DOOH and audio advertising—as part of a successful marketing mix.

Publishers need to be prepared for advertisers to make their move in searching for new ways to reach an evolving audience base.

Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% uplift in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.