Top 4 digital advertising trends of 2020
Updated: Nov 29, 2021
To say that digital advertising space is a whirlwind of changes is a fairly good assessment. It’s constantly evolving and adapting as new technologies and regulations step into the spotlight. Brands, publishers, and content creators on one side and advertisers on the other will continue to witness shifts in their businesses as the industry moves forward.
As the first couple of months of 2020 come to an end, it’s a good idea to take a look at digital advertising trends that are already forming and/or will surface this year. Some of these have been in the making over the course of a few years while others are just emerging. As much as it is vital for brands and businesses competing for users’ attention to stay on top of these advertising trends, it’s equally taxing and time-consuming. Hence, I’ve compiled a list of things (in no particular order) that will be reshaping much of the industry in the coming months.
Here are top 4 digital advertising trends:
Programmatic CTV video advertising
Generation Z targeted advertising
Real-time in-game ads
1. Programmatic CTV video advertising goes big
Programmatic advertising just keeps on growing with the programmatic ad spend increasing at double-digit rates, making it one of the most important trends in advertising media you need to be aware of. According to eMarketer, US advertisers were on route to spend nearly $60 billion on programmatic display in 2019, while almost 88% ($81.00 billion) of all US digital display ad dollars will transact programmatically by 2021.
Worldwide, 2019 was the first time the $100 billion mark was exceeded, expected to rise to $127 billion in 2020 and $147 billion in 2021.
Where does this optimism come from? Thanks to technologies like AI and 5G, programmatic advertising will become more and more efficient, offering more options for a more engaging and personalized experience for users through new(er) advertising channels.
One of those particular channels is programmatic connected TV (CTV) – video watched on a TV with internet connectivity. Thanks to so-called cord-cutting – the transition from cable to over-the-top (OTT) services like Netflix, Amazon Prime, and a growing list of other names – more than half of programmatic ad dollars now go to video. Viewers are in the middle of the “streaming wars” where major studios, companies, and networks like Disney, Apple, HBO, and Comcast have launched or are launching their own direct-to-consumer streaming services.
Users will definitely profit when it comes to variety but with multiple subscriptions in play, will such a model be sustainable?
Likely no. Nielsen’s latest report shows found 91% of all respondents currently subscribe to a paid streaming video service, with only 30% of respondents saying that they subscribe to three or more.
Here’s my reasoning: the majority of consumers have a finite budget for video streaming and aren’t willing to spend money on more services, which means advertising will come out as the top means to fund quality original content for a lot of streaming services.
For instance, Roku’s ad revenue reached an all-time high of $740 million in 2019, an increase of 78% year over year. Monetized video ad impressions more than doubled in 2019, and the company even invested in its own ad server.
This is where programmatic CTV video comes in as one of the more recent trends in online advertising. Q3 2019 already saw CTV accounting for more than half of video advertising impressions. That shows me that the ongoing shift from linear TV market to digital means all advertising can be streamed as well. With a wide range of options, advertisers will spend more than double over the next four years, from $6.9 billion to $14.1 billion, on CTV ad spending. As a result, we can expect to see more of those 15-30 second ads that pop up before and during streaming content.
There’s one particularly important reason why that will be so:
2. Fighting for Generation Z’s attention
Gen Z-targeted advertising could be considered as one of those encompassing digital advertising industry trends because this is the one, specific demographic that will be in the focus for years to come.
There’s huge value in this advertising opportunity for a number of reasons. First of all, the demographic born between 1996 and 2010 is now the largest in the world, constituting 32% of the global population or 2.47 billion of the roughly 7.7 billion global population, passing Millennials along the way.
Among the predominant changes in advertising trends will be the effort to appeal to the needs and sensibilities of a generation that largely makes video (and audio – more on that later on) a profitable advertising channel. For everyone out there, the possibility to reach such a prized audience – and at scale, at that – should be a no brainer.
For the most part, that will entail creating a mobile-centric user experience because the kids these days are spending huge amounts of time online, mostly via their mobile devices and I don’t see that changing anytime soon. It also means adjusting to their social media habits and keeping in touch rising platforms like TikTok.
Considering Gen Z-ers are largely lauded as digital pioneers, we can expect significant user-pleasing innovation in video advertising with branded content, new ad formats, and CGI product placement to augment the viewing experience.
Speaking of CGI wizardry…
3. Real-time in-game advertising gains traction
When talking about emerging digital media trends in 2020, in-game advertising is perhaps one of the most intriguing ones. Basically, traditional ad formats in the mobile space such as banners have been applied to video games, creating a completely new advertising ecosystem. Ads are integrated directly into the gameplay as part of the existing environment without disrupting the gaming experience.
So what opportunities are there in-game for advertisers?
Let’s start with the size of the market. There are now more than 2.5 billion gamers across the world, spending $148.8 billion on games in 2019 – a 7.2% growth from 2018. Then, there’s the wide range of available inobtrusive formats (aforementioned banners, native in-game ads, product placements) that don’t break immersion and maintain, even enhance, authenticity. In other words – add value to digital marketing.
Plus, all of these ads can be implemented in both AAA games and mobile games as two of the prevalent types of games. With widespread 5G, almost every device will become a real-time gaming device. This will drive ad spend through better adtech and entry of new advertisers attracted by the prospect of advertising in brand-safe environments and momentarily engaging typically hard-to-reach audiences.
Another major factor that plays to in-game advertising’s potential is esports.
In many ways, esports is mirroring live sports, with a constant rise in teams, leagues, and regional and global events that draw millions of viewers on platforms like Twitch and top-tier networks such as ESPN and ABC. According to Business Insider Intelligence estimates, total esports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023.
Two things will happen. Advertisers will increasingly find out that gamers (consisting of typically four major segments – Gen Z, Millennials, parents, and high-income consumers) and esports fans are an extremely loyal audience and community, and brands will realize advanced and unique product placement brings realism and creates a tighter connection with gamers. As a result, I fully expect real-time in-game advertising to slowly gain serious traction in 2020.
4. Audio advertising goes to another level
While the video and gaming advertising trends may seem flashy and exciting, audio advertising is arguably the most straightforward and easiest to implement. I’ve previously written about trends in the voice industry specifically but audio advertising is a different beast, and it packs quite a punch, especially if you incorporate it in your marketing strategy
As digital advertising trends go, audio advertising fills a pretty big gap in screenless media, enabling more touch points with audiences (particularly Millenials and Gen Z) that brands can’t reach with visual media. From multiple formats like pre-recorded ad creatives and dynamically inserted native ads to sound logos and personalized in-app ads, there are more opportunities than ever for businesses, brands, publishers, and content creators to take advantage and engage and monetize customers from a new angle.
The potential of audio advertising is massive, and numbers show it: digital audio revenue reached $1.2 billion during the first half of 2019, up 30.1% from the $935 million recorded during the same period the year before.
As an advertising format, one huge advantage audio has is the fact it doesn’t require visual stimulation. With attention spans constantly being bombarded with all kinds of content, reaching people on the go is faster and more direct with audio than with any other channels, especially in situations where screen is not an option (driving, working out, commuting, etc.).
Plus, the one-on-one nature of the medium generates a sense of exclusivity and a highly personal and impactful experience. Advertisers and agencies have begun to register this with 85% of them planning to increase their investment in digital audio in 2020.
I feel like this is the place to briefly mention voice search as a potential seamless link to audio content in the near future. So far, it’s not and despite what people say, I don’t see it being all that swish this year. Google has been making some great strides with voice search by focusing on better understanding of natural/conversational language and understanding what is being talked about in podcasts, directly affecting search results. It’s just that it will take time and likely be a slow-moving process where ultimately people will fully embrace everything voice search has to offer.
But as for audio in general, it’s slowly turning into one of the most potent advertising channels. As the number of people who consume it through podcasts, audio articles, streaming music and radio continues to climb, audio is asserting itself as a fruitful space to target. Opportunities to capitalize on a positive sentiment following this medium and develop a stronger relationship with the target audience are very rare, which is where I see audio advertising further establishing its presence during 2020 and beyond.
Notable mention: IAB’s Gold Standard
If we take for a fact that Gen Z will be the coveted target audience, IAB’s Gold Standard might make a significant change in the advertising ecosystem and user experience in general. Introduced in October 2017 and due for a 2.0 version later this year, the idea is to create a sustainable future for digital advertising focusing on three key points:
minimizing ad fraud through the implementation of IAB Tech Lab’s ads.txt initiative;
improve the digital advertising experience for users by sticking to the IAB Tech Lab’s LEAN Principles and/or the standards set by the Coalition for Better Ads
increasing brand safety by becoming certified signatories to the JICWEBS Digital Trading Standards Group (DTSG) Brand Safety Principles
All noble causes from which a host of adtech companies, media owners, and media agencies could and should take heed of, if anything as a mix of a best practice and cost-effective thing. As the advertising industry evolves, it’s tough to keep pace with rising challenges but more importantly – to build trust.
Given Gen Z’s (and Millenials’) propensity for sustainability and high-level user experience, IAB’s Gold Standard is the next best thing to addressing key user concerns and improving transparency in an industry that is lacking it. Judging by the 95 media owners, media agencies and adtech companies certified under the scheme, it seems the industry is slowly rising to meet this new standard.
Those would be my key takeaways for the year 2020. The industry’s is not without significant challenges: struggles with privacy regulation and the resulting supply-chain challenges will surely affect the growth in some part. However, the fact remains it’s upward trend from here, and those who pounce and employ these innovations to build more meaningful connections with their audiences will have an chance to stand out and drive revenue. And not just in 2020 at that – but very likely during the entire decade.
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https://www.emarketer.com/content/us-programmatic-ad-spending-forecast-2019 https://giphy.com/gifs/corgi-owner-races-Mt7324JaAWSYM https://giphy.com/gifs/excited-fan-league-QkkKVxdSDNK1y https://www.iab.com/wp-content/uploads/2019/10/IAB-HY19-Internet-Advertising-Revenue-Report.pdf