what the future of programmatic will bring
Programmatic, Trends

Programmatic Is Expected to Grow by 30 Percent – What 2017 Will Be All About

According to Zenith’s Programmatic Marketing Forecast, at least every second Euro spent on digital advertising this year will be managed programmatically. Now that market observers have published their forecasts for 2017, we decided to summarize the most important programmatic trends and share our thoughts on what’s to come.

1. Dynamic Creatives Meet Micro-Moments

As expected and described in one of our recent blog posts, the trend towards personalization will go on unabated. Static forms of advertisement will continue to lose significance, while dynamic creatives will achieve their final breakthrough. The reasons are obvious: Compared to conventional retargeting approaches, click rates for dynamic advertising media are up to 100 percent higher, and the costs are up to 50 percent lower.

This makes dynamic creatives a catalyst for successful programmatic storytelling, which reaches potential customers with personalized advertising messages in so-called micro-moments. Smartphones, wearable gadgets and the Internet of Things will create space for creative advertising concepts for which technical requirements weren’t met in the past.

adverserve’s take: More and more people are constantly connected which lets dynamic advertising unfold its full potential. Advertisers can finally reach their target groups with highly personalized messages in micro-moments.

2. Goodbye Black Box, Hello Programmable Advertising

Years ago after programmatic advertising was invented, it’s time to question the efficiency of the established DSP model. Critics point out the black box nature of many DSPs, whose algorithms are optimized for automation and cost-effectiveness, but offer little transparency and creative design possibilities for advertisers.

At the same time, advertising inventory is changing dynamically, and conventional DSPs with their established structures are reaching the limits of flexibility. Their lack of adaptability means that they offer advertisers too few possibilities for a differentiated approach to reach their target group. Programmable advertising will shed light on the black box and turn the present DSP model into a kind of ‘meta DSP’ that will allow advertisers to optimize their campaigns more directly. A programmable approach can provide deeper and more meaningful insights about the audience advertisers want to reach. At the same time, it requires a stronger dedication to data to make campaigns successful. Information needs to be unified, aggregated and diligently analyzed in order to achieve better cost saving efficiency and reach target audiences with precision.

adverserve’s take: In order to captivate target groups, advertising must become more sophisticated and tranparent. A programmable restructuring of the DSP model will give advertisers more flexibility to implement creative campaigns.

3. Brand Safety: Caught Between Risk and Reach

While the risk of an advertising campaign leading to inventory sources that don’t comply with one’s own brand safety criteria will decrease, it can’t be eliminated completely. The problem is the undefined grey zone that exists between blacklists and whitelists – but thanks to improved algorithms, it will continue to shrink in 2017.

In order to protect advertisers from unwanted inventory sources, algorithms continuously comb through provider websites and categorize content. As a result, advertisers have more transparency when it comes to managing brand safety. However, this process isn’t fully automated yet, so advertisers and service providers will have to continue to manually rework results in 2017 in order to minimize the risk of advertising on undesirable sites.

Advertisers should openly discuss brand risks and non-preferred inventory sources with their service providers from the very beginning of their cooperation. Every brand has its own policy and trustworthy service providers will address brand safety risks proactively in order to avoid any misconceptions. A joint investigation of grey areas is always a good start and helps to manage campaigns in the right direction right from the start.

adverserve’s take: Brand safety is a source of concern, but there’s no reason to panic. Improved algorithms and more transparency now make precise risk management possible. Find out more in our next blog post, which will be published here soon!

4. Programmatic Everything: Advertising as a Universal Experience

Advertising on all channels, without target customers feeling annoyed: Programmatic everything makes it possible! In 2017, cross-linking inventory sources from mobile to social media, from radio to TV and from in-home to out-of-home will remain a key focus area for us in programmatic advertising. Connecting online and offline touch-points such as loyalty cards and bonus programs offers new opportunities to address users seamlessly and without gaps along the lifecycle.

The challenge for top-notch advertisers will be to improve the customer experience to the point that customers no longer perceive advertising as such. Advertising should be an integral part of the overall experience of a brand and accompany target groups in a way that is subtle and highly personalized throughout the managed lifecycle. IKEA Austria, for example, is already doing this.

adverserve’s take: With artificial intelligence, machine learning and the seamless interconnection of different media formats and channels, the prerequisites for programmatic everything are finally met. 2017 will be a year of steep learning curves, and we’re excited about all the creative campaigns that we’ll be able to look back on at the end of the year.

The bottom line: Together with you, we once again look forward to the developments in the programmatic market with great anticipation this year. We will do our best to keep you up to date with a variety of interesting stories, news and practical advice – and, of course, we always appreciate your feedback!

Let’s talk about the future of programmatic and meet us at the d3con – one of the world’s biggest events for Programmatic Advertising – on the 14th of March 2017 in Hamburg. We are looking forward to welcome you in our private meeting space! For an appointment please contact us by mail welcome@adverserve.com.

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