The Evolution of Programmatic Advertising: 5 Trends Shaping the Future

Programmatic advertising is extremely efficient; the automated buying and selling of ad inventory allows advertisers to show internet users relevant ads in less than a second. Over the last 15 to 20 years, the prevalence of programmatic advertising hasn’t really wavered; instead, it has adapted and evolved to changes in consumer behaviour and technological advancements.

2024 will be no different. With the fast-approaching death of the third-party cookie and unforeseen developments in AI, the field of programmatic advertising is due for its next evolution.

This blog will explore 5 ways in which programmatic advertising is set to change so you know what to expect in the coming years:

1.Prioritising privacy

Programmatic advertising requires vast amounts of data. Historically it heavily relied on third-party cookies to track user behaviour across the web. This tracking enabled advertisers to create detailed user profiles and deliver highly targeted ads. However, as users became more aware of how their data was being collected and used, privacy concerns escalated.

Programmatic advertising has been at the centre of these privacy debates because of its dependence on third-party cookies, tracking users across different websites without explicit consent. This practice has, of course, raised alarms and led to a push for greater privacy controls.

In response, the advertising industry is pivoting towards more privacy-centric models. Google’s decision to phase out third-party cookies in its Chrome browser by 2024 is a major shift, compelling advertisers to seek alternative methods for targeting and measurement.

Given these changes, businesses using programmatic advertising will have to change the way they use data to support their strategies. Solutions like contextual advertising (which targets ads based on the content of a webpage rather than user behaviour) and the development of Privacy Sandbox (a set of privacy-preserving APIs for advertising) are gaining traction.

Additionally, first-party data (collected directly from users with their consent) is becoming increasingly valuable. Businesses should endeavour to gather this data ethically as it is a highly transparent way of operating.

2.Increased spend on TV ads

When smart TVs offered a new avenue for programmatic ads in the mid-2010s, advertisers were quick to capitalise on the opportunity. In 2024, US programmatic ad spending is projected to grow to $24 billion. This growth can be attributed to the continued decline in traditional TV viewership and the rise of streaming services. More consumers use platforms like Netflix, Prime Video, and YouTube – which all offer advertisers opportunities for CTV (connected television) ads.

CTV advertising offers precise audience targeting and detailed analytics, which are superior to traditional TV ads. This precision allows advertisers to segment audiences based on interests, demographics, and viewing habits, leading to higher engagement and conversion rates. Additionally, the interactive capabilities of CTV ads, such as clickable elements, enable direct consumer interactions, enhancing the effectiveness of ad campaigns​.

In response to changing media consumption patterns, and the likelier success of their CTV ads, we can expect more businesses to invest their funds into programmatic TV ads in 2024.

3.Lower tolerance for ad fraud

Ad fraud has been a persistent issue in the realm of programmatic advertising, costing the industry billions of dollars annually. Apparently, as much as 40-50% of programmatic ad spend can be lost to fraudulent activities, including fake impressions, clicks, and installs. This not only inflates advertising costs but also skews campaign performance metrics, leading to misinformed marketing strategies.

Ad fraud techniques have grown increasingly complicated, with fraudsters using methods like SDK spoofing (where they emulate app installs and clicks, and ad stacking, which hides multiple ads on a single page to inflate impressions)​. These tactics result in significant financial losses and erode trust in digital advertising.

To combat ad fraud, the industry is shifting towards more robust detection and prevention measures. In 2024, efforts will focus on enhancing transparency and implementing stricter verification processes. Solutions include leveraging artificial intelligence and machine learning to detect fraudulent patterns in real time and employing third-party verification services to ensure the integrity of ad placements.

Companies can also adopt dynamic blocklists to prevent ads from being placed on known fraudulent sites​​. Combined with educating stakeholders about the risks and signs of ad fraud, we may see less of it in the coming years.

4.Refining advertising strategies with AI

Developments in artificial intelligence seem to be revolutionising everything – including programmatic advertising.

AI offers the field several ways to enhance efficiency, targeting, and personalisation. In 2024, we can expect to see these enhancements in action, with businesses making use of AI’s abilities to process vast amounts of data and learn in real time. Here are a couple of examples:

• Dynamic creative optimisation (DCO): advanced machine learning models continuously learn from new data, adapting to market trends and consumer behaviours to select the most effective ads. This ensures that ads remain relevant to target audiences, enhancing engagement and conversion rates​ as much as possible.
• Enhancing ad targeting precision: by analysing non-intrusive data points like search behaviour and browsing history, AI can predict user interests without compromising individual privacy. This refined targeting is particularly crucial in a post-cookie world, where preserving user privacy becomes more of an expectation than a preference​.
• Real-time bidding efficiency: this allows advertisers to make quicker, more informed bidding decisions based on comprehensive data analysis. This capability not only optimises ad spend but also increases the chances of reaching the right audience at the right time​.

For businesses looking to integrate AI into their programmatic advertising strategies, several steps are necessary. Firstly, the right tools are essential. Businesses should invest in platforms like the Google Display Network or The Trade Desk, which offer AI/automation technologies to enhance programmatic advertising efforts​​.

Businesses must next ensure they have the data maturity to support AI initiatives. This involves collecting extensive, high-quality data and having the ability to analyse it for valuable insights​. Beware that AI may exacerbate ad fraud – you must implement stringent verification and anti-fraud measures to protect your finances and the integrity of your campaigns​.

AI can massively improve advertising outcomes, but you should contemplate the challenges and requirements before joining this trend.

5.Engaging consumers across multiple platforms

Modern consumers expect seamless and consistent experiences. They’re also more likely to remember your brand if they recognise your ads on several platforms. An omnichannel approach can secure success by engaging users on multiple touchpoints.

We’re likely to see more of this in 2024, with businesses using programmatic advertising on several different channels. AI and machine learning make it easier to analyse customer data and personalise experiences across channels. Customer Data Platforms (CDPs) and other advanced data management tools also enable businesses to unify data from different sources, providing a holistic view of the customer and enhancing personalisation efforts.

Businesses that make use of these tools to create an omnichannel approach will see significant benefits, including a 30% higher lifetime value of customers compared to single-channel approaches.

You may choose to incorporate some of your ads on Spotify and podcasts due to the popularity of audio content. Email and SMS offer more direct ways of engaging leads, posing another suitable channel for multifaceted strategies. As mentioned before, CTV ads are becoming more mainstream, and you may come to recognise ads here that also appear on other platforms.

Of course, social media is a reliable space for advertising, and this isn’t set to wane. In fact, social commerce (on platforms like Instagram and TikTok) is projected to reach $2.9 trillion in sales by 2026.

For businesses wanting to truly diversify, there are also ‘voice commerce’ and AR/VR experiences. With voice-activated devices and augmented reality, brands can incorporate these technologies to create unique and immersive advertising experiences that bridge the gap between digital and physical interactions​.

Businesses aiming to leverage an omnichannel approach in 2024 should utilise AI for personalisation. AI and machine learning not only improve targeting but also enhance the overall customer journey by making it more relevant and engaging.

Final thoughts

As we step into new waters with programmatic advertising in 2024, it’s clear that adaptability and innovation are key to staying ahead. Embracing new technologies, refining omnichannel strategies, and prioritising privacy are not just trends but necessary steps to ensure sustained engagement and success.

The future of advertising lies in creating seamless, personalised experiences that resonate with consumers across all touchpoints. By leveraging advanced AI, interactive CTV ads, and robust tools, businesses can not only meet but exceed consumer expectations, paving the way for more impactful advertising.