In 2016 digital advertising is expected to top any other media channel in terms of investment, according to a study conducted by ComScore for CNBC. This statistic, which applies to the American market, is actually showing a global trend.
Digital advertising’s growth is driven both by the evolution of technology, and by the change that consumer habits in information and entertainment consumption are experimenting, as people are shifting more and more to mobile devices and social media to get content.
2016 will undoubtedly be a challenging year for an industry that, over the past 20 years, has been the spearhead of innovation in advertising.
- We have Reached the Mobile Era
According to eMarketer, the mobile advertising market will concentrate 51% of all digital advertising this year, with an investment that will top the historic record of US$100 Billion.
Additionally, and according to Forrester Research, M-commerce, stimulated through smartphones and tablets, will keep growing, and is projected to account for more than US$252 Billion in revenue by 2020, just from online purchases.
Brands are already starting to dispute their positions in the different mobile app stores, and in 2016 we’ll see a technological leap in the amount and quality of mobile and social advertising.
Social networks have also become Television’s biggest ally (Social TV). It has been proven over and over that the shows that produce more engagement among their audiences are the ones that generate more social content on these networks. That is a huge opportunity for advertisers, who can unify their marketing and advertising efforts with joint activations between both screens. And some companies have already started doing this, with very encouraging results.
According to Nielsen, 57% of TV-related impressions on Twitter are obtained during a show’s broadcast, and 49% of viewers get “more hooked” when a show includes a call to action for them to engage on the social networks.
It is not rare then, that the industry has set its eyes on Facebook’s mobile app, which this year has scored 126 million unique users a month on mobile. YouTube, on the other hand, has also grown to score 97 million solely mobile users every month on its app.
2- Ad Personalisation
This need by the industry finds the most adequate solutions in two technologies: programmatic buying, and DMPs.
In the case of programmatic buying, this type of ads cluster users according to the sites they browse through, and offer them relevant products and services in accordance to those habits.
Programmatic buying will evolve as mobile devices gain penetration, and their influence in social networks, video, and native advertising rises. Through 2016 the investment in this type of advertising is expected to reach US$14.89 Billion in the US alone.
DMP’s, on the other hand, are the big information concentrators for agencies and advertising companies, which are the support of programmatic buying. Using cookies, they collect and later process data in order to segment the audience. With this information, companies can do a better job personalising their ads, and thus reach their audiences better, for example through display ads.
3- Ad Viewability
This is one of the most promising trends for 2016. Thanks to new technologies, it was possible to develop “viewable impressions” that eradicate one of the problems that have cost more money to the advertising industry: fraud.
According to the Media Ratings Council, ads are displayed on users’ screens for a minimum of two seconds in average. If advertisers manage to improve engagement in their ads in this period of time, they can have a special impact on online videos.
The Ad Blocking Challenge. A Good Opportunity for Native Advertising?
We must face the facts. Users’ tolerance for invasive and irrelevant advertising is reaching its peak. And hence the growth of ad blockers. The use of these extensions and apps has cost the industry US$21.5 Billion in 2015 alone.
The challenge for the digital advertising industry is to revert the trend with higher quality ads that are more relevant to users. This means there is a big opportunity for native advertising. These are the kind of ads that blend into the style and content of a particular website.
It is a less violent way to interrupt text, and it becomes a nexus that take consumers to the product and other publications that match their interests and tastes. In general this kind of content is labeled as “advertising” or “sponsored”.
At the same time, Ad Exchanges face the challenge of improving their algorithms to get the best possible ads stock for the publishers who rely on their content.
2016 will undoubtedly be a challenging year for an industry that, since its inception only 20 years ago, has been the most innovative force in advertising.