As we look ahead to what 2024 holds for the ad tech industry it is important to assess the present state of advertising. First of all, users are rejecting the tracking of their every move on all the digital platforms they use. Secondly, in 2023 the entire industry had to accept the fact that the deprecation of cookies is here and there is a huge emphasis on first-party data. Thirdly, the changing behaviors and attitudes of consumers have generated a great expectation for non-disruptive advertising and a lower tolerance for disruptive ads. At the same time, there is a need for better capabilities for measuring the return on investment in advertising. So how will all this be reflected in the ad tech trends for 2024? This article was also published in December in Martech Series.
As Google has already started its opt-in testing for Chrome users, the industry started to experience the effects of third-party cookie deprecation. With less effective targeting options on the open web, advertisers are likely to face increased costs, while publishers may lose valuable ad revenue to enclosed platforms. This situation creates a daunting scenario for ad tech companies, which traditionally assist advertisers and publishers in optimizing user engagement, especially outside the confines of walled gardens. Finding viable solutions becomes essential in navigating this new landscape.
The question that remains to be answered is which solutions the advertising and ad tech industries will gravitate towards. The buzzwords surrounding this subject are first-party data, contextual targeting, partnerships, and collaborations.
So far, ad tech has been actively developing solutions for leveraging first-party data and contextual targeting as a first step in answering the demands of publishers and advertisers. However, a lot of big players are still testing the waters and looking for partnerships that will help minimize the impact on their bottom line. With this in mind, 2024 will undoubtedly see the emergence of new collaborations that will bring new solutions or adaptations to this new environment. One of the big hurdles that cookieless solutions providers have to overcome is packaging any new solutions in a way that will make it easy for marketers to adopt them and use them efficiently.
Connected TV is fast becoming one of the preferred channels of video consumption. As a channel that fosters high engagement, it is a fertile ground for high ROI advertising and brands want their share of it. Although a lot of progress has been made in ad tech CTV solutions, the lack of industry-wide standards and the high expectations of advertisers are shaping up to be an interesting 2024. This is particularly relevant as CTV attracts more advertisers who have never used traditional linear TV advertising.
As CTV advertising continues to grow, it will force CTV platforms to further refine their advertising offering to ensure the perfect balance between satisfying the needs of brands and those of viewers without impacting the main revenue streams. High-end technology solutions that enable seamless advertising experiences and accurate measurement will stand to win. The personalization of content and ads for CTV viewers with the help of AI and first-party data is paramount in this process as well as the ability to access comprehensive sets of relevant data.
The spotlight on video content remains unwavering, fueled by the strong consumer demand for visual experiences. This means that video ad formats will also continue to reign supreme in 2024 and beyond. Videos have transcended mere preference; they have become essential, serving as a direct pathway to our emotions and connecting deeply with audiences. The allure of video lies in its ability to tap into our psyche, forging profound connections that resonate on a personal level.
What's truly remarkable is the newfound accessibility of video creation, a transformation attributed to generative AI technology. Gone are the days when professional cameras and high-quality microphones were prerequisites. Now, anyone armed with generative AI tools can craft captivating video content effortlessly, signaling a revolution in content creation. This democratization aligns seamlessly with the rise of Connected TV (CTV).
All of these factors have brought a noticeable increase in programmatic video advertising with more Supply-Side Platforms (SSPs) increasingly focusing their efforts on video traffic. Looking ahead, it's evident that video will continue to captivate both creators and consumers, solidifying its position as the ideal medium for advertising.
Retail media is one of the fastest growing sectors in digital advertising but how will it maintain its growth in 2024 and for years to come? As emphasized by the IAB Europe, at DMEXCO 2023, the pressing demand emerges for the establishment and enforcement of rigorous standards. These standards must span measurement, attribution, ad formats, and data strategies, pinpointing the pivotal areas where the retail media industry must forge ahead to thrive in the future.
Despite the valuable asset of first-party data in retail media, the sector is currently experiencing a decrease in online shopping activity to pre-pandemic levels. In response to this trend, there is a growing need for retail media to explore avenues like programmatic advertising. This shift requires careful consideration of how data is used to ensure maximum advertiser satisfaction. Adapting to these changes is crucial for retail media to maintain its effectiveness and adapt to evolving consumer behaviors.
Native advertising is emerging as a pivotal format, aligning with the growing demand for non-disruptive ads. This unobtrusive approach creates an ideal environment where audiences are more inclined to engage with ads, leading to significantly higher Click-Through Rates (CTRs) for advertisers. At the same time, native advertising empowers publishers to provide a seamless user experience for their audiences, enhancing overall user satisfaction. Its adoption by major publishers has resulted in remarkable success, marked by consistent market growth and robust audience engagement.
The synergy between native advertising and first-party data targeting capabilities addresses the critical need for a personalized and non-disruptive advertising experience. Simultaneously, it delivers a consistent Return on Investment (ROI) for advertisers. This mix of relevance, user experience, and performance metrics positions native advertising as a leader in advertising strategies.
The proven effectiveness of native advertising, and its ability to meet user expectations and advertiser demands, ensures its continued growth and makes it one of the areas of investment for 2024 and beyond.
In conclusion, the ad tech industry faces significant challenges and opportunities in 2024 that require innovative approaches. Keeping the focus on the needs of the consumer will enable ad tech to develop solutions that help publishers to better monetize their properties and enable advertisers to maximize their ROI.
At EXADS we believe in providing enduring ad tech solutions that stand the test of time and navigate the ever-changing trends of the industry. We aim to develop technology that ensures long-term success and effective advertising for businesses across all sectors. So contact us today and get ahead of the trends!
Product Marketing Manager
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On Saturday 17 February 2024, the European Union’s Digital Services Act comes into force for all Online Platforms. For Ad Networks, Mobile apps, Advertisers and Publishers, this relates specifically to Article 26 – Online advertising transparency.
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