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Top 5 trends for programmatic ads in 2022

The programmatic ad market is evolving in response to recent tech developments and is shifting user-behavior patterns. While the changes may not be overwhelming, stakeholders in the programmatic sector should familiarize themselves with the new trends defining 2022 to get the most out of their programmatic ad spend. Roman Vrublivskyi, Head of SmartHub white label ad exchange, talks about what he sees as the 5 trends defining the programmatic sector in 2022.

Reinventing customer targeting and data collection practices

Over the years, advertisers and ad tech companies have relied heavily on third-party cookies to target and display ads programmatically to users. Unfortunately, the use of third-party cookies will be history in a short while. 

The question is: Why are third-party cookies being phased out if they were effective in the first place?

Serving relevant ads to the right audience requires the advertiser or programmatic ad partner to have specific information about users. With third-party cookies, advertisers got this information freely and oftentimes without consent. Usually, the cookie, also called a tracker, is stored on a user’s computer in order to collect information and track his/her digital footprints for ad targeting.

The lack of a transparent consent-giving mechanism has sparked severe worries about privacy. Most popular browsers (including Safari and Firefox) no longer support cookies in response to the issue of privacy breaches and unethical data harvesting. Google has also announced that the use of third-party cookies will be phased out in 2023.

Although most marketers (approximately 80 percent) rely on third-party cookies for ad targeting, change is unavoidable, and stakeholders in the programmatic ad ecosystem are already exploring other ethical targeting solutions.

New trends that are replacing the use of third-party cookies

Contextual targeting: With this method, ads are served based on the content of a site rather than audience information. In essence, rather than directly targeting individuals, advertisers will target web platforms with similar content to their adverts.

According to a report, 51% of marketers admit to committing more of their ad budget into contextual targeting and 43% are quite enthusiastic about it.

Contextual targeting will eliminate the need to harvest users’ information for targeting.

Consensual data collection methods: Companies can collect information from consumers through a voluntary exchange, such as opt-in forms and surveys. Publishers can also incentivize users to provide information for ad targeting in exchange for bonuses.

Partnering with Ad Tech Companies: Solutions that will efficiently replace the use of third-party cookies are currently being developed. Some of these solutions include;

·    Unified Identity 2.0

·    Google SandBox

·    Apple SkadNetwork 

Depending on their ad objectives, advertisers can utilize one or more of these options for attribution or targeting.

Adopting programmatic DOOH

Digital out-of-home advertising has been a major outdoor ad strategy in recent years. Advertisers utilize electronic billboards and other outdoor digital display channels to deliver ads. While this has been quite successful – because people are attracted to electronic displays – there has been a gap that made the DOOH fail (mostly pandemics). However, after the pandemic ends, DOOH might become especially popular.

With programmatic DOOH, media buyers can target viewers and outdoor audiences in relevant ad settings based on important factors, like time of the day, weather, societal events, etc. This implies that relevant ads will be programmatically projected to fit every moment, time and occasion for more precise targeting. Programmatic DOOH employs data analytics, AI and deep learning to organize, compile and deliver ads to a targeted audience. This allows advertisers to better manage their campaigns and employ a data-centric targeting approach. According to research, interactive ad-media appeals more to an audience and generates 100% more conversion than static media type for DOOH advertisements.

Programmatic ads on Connected TV

Programmatic CTV ads have become popular in recent years, and the pandemic was a crucial factor in this rise. CTV ads involve presenting digital ad content on web-connected devices, like Smart TVs, game consoles, monitors and other Internet-connected devices.

COVID significantly impacted user content consumption habits because now we spend more time on screens. People were compelled to stay indoors due to movement limitations, resulting in an increase in the time spent viewing television and streaming videos. Almost a third of our waking hours were spent watching TV or streaming videos on the Internet. In addition, people spent twice as much time in front of the television during the pandemic as they did before it.

Following these habits, more brands and advertisers adopted programmatic CTV advertisements, as more people now had access to CTV. According to a poll, over 80% of the UK population has access to a connected TV. Furthermore, 77% of customers are comfortable viewing ads in exchange for free content.

Although lockdown restrictions are milder now, these habits have lingered, and CTV programmatic display ad spend increased from $4.5 billion in 2020 to $6.9 billion in 2021. According to estimations, CTV ad spend will record a new high of $8 billion in 2022.

The rise of digital audio ads

Digital audio content is attracting a huge audience; hence, the growth of programmatic audio ads. In recent times, podcasts and audiobooks have become a major media preference for many young people. According to recent reports, over 60% of the US population listens to online audio content weekly – the average weekly listening time in 2021 was 16 hours and 14 minutes. Other reports suggest that online audio accounted for 11.7% of total media time in the US in 2021.

Programmatic audio ads involve embedding relevant ads in digital audio content, such as podcasts, music streaming, audio articles, etc. Brands and marketers can utilize the automated and data-centric approach of programmatic systems to enhance conversion while targeting an audio audience. According to reported research by Nielsen, audio ads had a 24% higher recall rate than display ads and were twice as likely to increase purchase decisions.

The digital audio audience is still growing, and advertisers have started taking advantage of this niche to programmatically target users. Audio ads are effective for conversion, as the Midroll report revealed that 60% of podcast listeners completed a purchase after hearing an audio advertisement on the podcast.

Mobile in-app video ads

There are over 3.4 billion smartphone users in 2022, and other research indicates that approximately 3.25 billion people play mobile games on their smartphones. This is a huge audience for online marketers to take advantage of. Brands and advertisers often serve in-app ads, especially in video formats, to mobile gamers and other mobile app users.

Mobile video ads generally have a high view rate, because people watch videos often, and many users (54%, according to HubSpot) prefer to see more video content from brands.

In-app video ads can come in different variations; notably, playable and rewarded videos. Rewarded videos are mostly used in mobile games because they allow users to earn a reward or incentive for viewing an ad. Mobile video ads are engaging; hence, they are great for targeting and converting users.

Conclusion

For advertisers, it is essential to know the trends of programmatic advertising developments and incorporate them into their 2022 campaign approach. Third-party cookies will soon be obsolete; instead of waiting until then, begin transitioning to new targeting choices and data collection techniques. Importantly, be adaptable and willing to test less-popular ad formats, such as audio, video commercials and digital out-of-home. If you’re confused about how any of the trends work, it’s better to approach an ad tech company or ad agency for guidance.

Roman Vrublivskyi
Head of SmartHub