2023 is just three weeks old and many companies in the marketing industry are still in the midst of annual planning. Because: When, if not now, would it make sense to reflect on the past year and look forward with excitement to the new one? For programmatic there are some really interesting trends down the line and we’re gladly here to help you remain on top of things.
So here are our top picks for where programmatic advertising is going in 2023, and what trends you want to be prepared for.
Trend #1: Transparency is the holy grail
With programmatic advertising popping up, the online display-advertising industry was completely revolutionized. It became quicker, easier – just better. But it has also obscured the process of buying and selling media inventory to a certain extent. Nowadays the lack of transparency concerning the supply chain is one of the biggest impediments to programmatic investment and one of the main issues that the industry has to resolve.
Fortunately, the IAB has worked continuously to create a fully transparent advertising environment by releasing quality standards. For example the IAB Tech Lab just recently announced the finalization of OpenRTB 2.6 draft – a new standard of implementation that ConnectAd already has been using for years. The IAB TechLab also released ads.txt.1.1, which is a new spec to help buyers to determine the owner and manager of ad inventory and that in turn helps to reduce fraud.
And last but not least the Transparency Center has been introduced with the potential to once and for all put an end to supply chain fraud and misrepresented inventory. How so? It’s actually quite simple, but nevertheless ingenious: The Transparency Center crawler performs full-scale crawls of ads.txt, app-ads.txt and sellers.json and and makes all information found available in the Transparency Center. Therefore the Transparency Center is a public database for companies within the advertising supply chain to share information regarding audience segments, structured metadata about publishers, ad tech intermediaries and buyers in explorable and downloadable format. Great? For sure!
Trend #2: The focus on ROI is stronger than ever
A global inflation crisis, the war in Ukraine and the energy crisis in Europe ensure that we all find ourselves in economically challenging times. This is also having an impact on advertising budgets. They are shrinking and shrinking. The consequence of this is that everyone needs to improve their ROI. This goes hand in hand with the preference for fast, flexible and intelligent advertising channels.
The logical consequence of this is that educated maketers will rely on programmatic advertising even more than before. By doing so they will be able to capitalize from the mix of quality media, targeting opportunities and supply-path-transparency. Therefore the decision for programmatic advertising is an opportunity to turn headwinds into tailwinds and get the most out of every ad dollar spent.
Trend #3: Alternatives for third party cookies popping up
For several years there have been discussions that Google would discontinue support for cookies. It was originally scheduled to end support in the second quarter of 2022, then moved to 2023 and was again postponed to 2024. So we still have sometime to get everything sorted out but the end of the third party cookie is inevitable. In the near future marketers will no longer be able to track users across the web and serve them targeted ads by using third-party cookies. This is hard for the whole industry but we should welcome these changes and see themas an opportunity to reconfirm our belief that transparency and privacy should underpin any consumer data usage.
One bright spot is that not all cookies are dead. We should stop whining and remember that we still have first-party and second-party data. They can provide a massive amount of really useful marketing insights, beginning with browsing habits and user preference. They are full of possibilities and therefore the party ownership is now more important than ever.
But the most promising solution to tackle the vanishing of third party cookies in 2023 will be so-called identity solutions which already are growing in number. Carefully selected and well-implemented identity solutions enable advertisers to accurately target and measure audiences, while publishers benefit from better monetization of the target audience. More importantly, consumers continue to enjoy customized advertising experiences tailored to their individual characteristics and needs.
Trend #4: Programmatic campaigns run in-house
It was just a decade ago that only a handful of companies even controlled their programmatic ad buying. Today, the situation is completely different. Advertisers themselves are generally very educated. They want to understand how programmatic works, are always willing to learn, and therefore are much more independent than they used to be.
In 2023, internal programmatic advertising will be an increasingly popular move for marketers who want more control and transparency in their media campaigns. Cost reduction and resource efficiency are two other benefits. It's easy to explain why. By eliminating costs associated with third-party services and data management, companies can invest in active marketing initiatives to a greater extent than before. On the long run this should result in a higher return on advertising investment.
Trend #5: Private marketplaces are on the rise
In the US private marketplaces already make up for more than 50% of supply side platforms revenue in 2020, and the trend is rising. Europe is still lagging behind a bit, but we will see a similar development. To understand this shift we have to dig into the differences between the open exchange and private marketplaces.
As the name suggests, the open exchange is a real-time public auction in which any buyer or seller can participate. A private marketplace deal, on the other hand, is an invite-only marketplace where publishers make their premium inventory directly available to selected buyers. To speak metaphorically: The open exchange is like general admission to a concert, while PMP offers are the VIP tickets backstage.
But what is the advantage of these “VIP tickets”? That’s explained quickly: They guarantee an exclusive intimacy that comes with a save environment and many other quality assurances like transparency and the certainty that ads will appear only on high-quality media properties. In times of growing concerns about brand safety and ad fraud this is very important for advertisers. And one thing is already certain: Publishers who want to be successful in 2023 will have to offer “VIP tickets” because – as those private marketplaces will outperform open exchange most of the time – the eCPM will increase.
You heard enough and are ready to take off? Let’s get in touch! We’d love to be there for everyone who’s looking for a qualitative supply side platform partner that connects great demand with great supply.
