10 Trends&Challenges the AdTech Industry Will Face in 2024

Jan 18, 2024

In the realm of adtech, 2023 unfolded without any unexpected twists, and 2024 will follow suit. The upcoming year will witness the ongoing evolution of established trends, essentially building upon previous technologies. While we expect continuity, unforeseen changes still have the exciting potential to emerge. It is plausible that specific industries will transform, introducing new possibilities and reshaping the technologies in ways yet to be revealed. So, we invite you to review the most important trends with the most significant prospects for further development even after 2024.

Table of Contents

Redefining Supply Chain Value

The advertising technology industry is experiencing a profound transformation, reshaping the concept of value within its supply chain. The lack of transparency prompts advertisers to refrain from paying more for their ads, mainly when sold through multiple intermediaries. A renewed dedication to optimizing the supply path (SPO) and demand path (DPO) is fueling this shift. It’s important to note that no one has achieved absolute transparency so far.

Looking ahead to the following year, we anticipate that media buyers will prioritize collaborating with partners who can demonstrate their expertise in enhancing efficiency and delivering authentic value. While there is an expectation of increased consolidation on the supply side in 2024, it is crucial to highlight that diversity and choice will continue to play a central role. This consolidation is not about establishing a singular dominant player but rather streamlining processes, eliminating inefficiencies, and ultimately fortifying the industry.

Politics Will Set The Pace

The upcoming 2024 elections in the USA will witness a more polarized digital landscape than ever, presenting advertisers with two significant challenges: escalating costs and heightened political toxicity. The amplified expenses associated with media during a U.S. presidential election year will translate to lower brand returns. Those who have proactively strategized for this scenario are a step ahead. Still, many need to, necessitating these brands to reallocate budgets or employ creative approaches within existing constraints.

Brands that incorporate timely political messaging into their communications must exercise extra caution to avoid offending potential customers. Many individuals will likely alter their media consumption habits to avoid political noise. Consequently, the media consumption landscape is poised for a shift as people seek refuge in alternative channels and feeds to escape the arguments and political ads. Measuring performance against 2024 using metrics from the previous year will prove exceptionally challenging. But these are not the only aspects that will be affected by the election.

The dynamics of election engagement become intriguing in this context, especially considering that certain digital platforms limit political advertising. Traditional television is poised to garner substantial revenue by capitalizing on this profitable opportunity. Projections indicate that the forthcoming election cycle will see an unprecedented influx of $11 billion in political ad spending. The question now is: How will adtech players respond to this situation? Let’s observe and see.

CTV Will Continue Its Growth

Anticipated to experience a growth of 10.4% from 2023 to 2028, Connected TV (CTV) advertising is poised to become a prominent trend in 2024, primarily driven by the surge in programmatic utilization. This trajectory aligns seamlessly with the increasing preference for streaming services and connected TVs as the primary platforms for television consumption. Brands and advertisers astutely incorporate CTV programmatic advertising into their marketing strategies to connect more effectively with their target audiences.

Expect further enhancements in the landscape, including distributor consolidations, a more competitive bidding process, an expanding base of connected TV users, and refinements to the intricacies of the technology. These developments will likely result in a more diverse range of advertisements, a crucial shift to address the viewer’s aversion to incessant ads. Recognizing that relentless advertising is annoying to viewers, detrimental to the creative content, and impactful on purchasing behavior, the industry is poised to evolve towards more thoughtful and engaging advertising practices.

More Power of AI

The year 2023 underscored the surging popularity of AI, prompting us to ponder whether we’ve genuinely unlocked its full potential. Evidently, the most groundbreaking applications of artificial intelligence are yet to unfold.

One notable stride has been made in generative AI, revolutionizing many marketing approaches by elevating content creation at its core. While it may be premature to herald the era of AI-generated creative masterpieces, be it images or eloquent slogans in advertising, its widespread adoption across diverse job roles is evident. Generative AI is increasingly becoming a tool to enhance developer productivity and augment workers’ knowledge. A substantial 79% of individuals have encountered generative AI, with 22% utilizing it regularly in their professional lives.

The advertising industry has shifted its focus towards attention prioritization, recognizing the symbiotic relationship between heightened attention, brand uplift, and positive client outcomes. Generative AI emerges as a key ally for advertisers, facilitating the adaptation of creatives at scale for various online content, elevating ad visibility and user engagement. Attention optimization hinges on placement, presenting a substantial opportunity to leverage strategies integrated with creative elements.

The Final Opt-out of Cookies

Chrome intends to transition third-party cookies for a 1% subset of randomly chosen users in the first quarter of 2024, with a complete phase-out targeted by the year’s second half. Consequently, the AdTech industry should explore alternative cookieless solutions in the coming year.

Among these alternatives is Unified ID 2.0 by the TradeDesk, where users willingly provide their email addresses to publishers to create a unique identifier. Advanced cryptography ensures the email address remains outside the bid stream despite initial privacy concerns. Preferences are then shared among UID 2.0 partners, facilitating cross-site targeting while maintaining user privacy.

Previously, we have already written a story about the cookieless future. However, we can skip the technical details and leave them to the professionals. The primary challenge lies in persuading users to adopt these new methods, enhancing targeting capabilities.

Contextual Advertising Has a Second Wind

Contextual targeting is not a new technique predating the internet and emerges as a vital strategy for programmatic advertisers grappling with the absence of third-party cookies. Amid this challenge, new technologies present opportunities to elevate contextual advertising. Leveraging sentiment analysis and related advancements enables advertisers to understand a page and its audience profiles profoundly.

This heightened understanding empowers advertisers to execute contextual targeting with unprecedented precision. The anticipation is that this refined targeting approach will address persistently low click-through rates and enhance brand recognition. Additionally, these advanced filters serve as a safeguard, preventing brands from unintentionally aligning with undesirable content. Combined with modern technologies, contextual advertising uses the power of artificial intelligence to display ads that better match consumer behavioral patterns, ultimately leading to better engagement. This means that the main potential of contextual targeting has yet to be realized. Our recent article looked at the second wind of contextual advertising.

5G Boost

With the ongoing global expansion of 5G standalone networks, the need for seamless connectivity on both national and international levels is becoming more pronounced. In this landscape, telecom operators and IPX providers will be pivotal in driving these advancements, fostering a worldwide ecosystem for 5G roaming. This elevates user experience and creates fresh avenues for revenue generation. Operators and enterprises stand to capitalize on the escalating demand for uninterrupted connectivity on a global scale, underscoring the transformative potential of 5G roaming.

The development of 5G, in turn, boosts other areas of adtech. As faster internet becomes more widely available, it significantly enhances the feasibility of video advertisements from a technological perspective. In 2024, the United States anticipates a surge in online video advertising spending, with the estimated total reaching 12.66 billion. This trend underscores the growing role of the potential and effectiveness of video advertising and 5G.

Leveraging the power of faster internet, DOOH campaigns are poised to unveil a new realm of interactivity. Dynamic connectivity facilitated by trigger-based creative optimization allows consumers to interact with tailored content or promotions based on factors such as location, time of day, product popularity, or known interests.

Incorporating real-time data feeds into pDOOH campaigns empowers advertisers to integrate elements like countdowns, the nearest store location, and current weather conditions at a highlighted destination into the ad’s creative design. This capability amplifies relevance and instills a sense of urgency, encouraging immediate audience response with each ad play. The result is a transformative approach that enhances brand engagement and responsiveness in the dynamic landscape of DOOH advertising.

A Good Word About DOOH

In 2024, experts anticipate a robust growth of approximately 17% in global digital out-of-home (DOOH) advertising revenue, surpassing 15.5 billion U.S. dollars. Expect a noteworthy increase of 34% in the next four years, pushing the value to nearly 21 billion dollars by 2028. The trajectory of DOOH advertising is poised to revolve around strategic integration and coordination with other advertising methods.

A significant driver of industry expansion is the rapid proliferation of programmatic DOOH, with real-time bidding opportunities seamlessly accessible through widely used DSPs. Notably, Google has taken a proactive step to democratize access to DOOH ads for all users of its advertising platform, Display & Video 360 (DV360). This initiative involves collaboration with various DOOH SSPs and ad exchanges, ensuring widespread access to the inventory of major out-of-home media owners. Dynamic growth, technological integration, and enhanced accessibility through crucial partnerships characterize the future of DOOH advertising.

Augmented/Virtual Reality Ads are Not Impressive

Although affluent companies have successfully crafted virtual reality branded experiences, organic VR advertisements’ programmatic delivery into third-party VR applications has not yet materialized. Significant barriers currently impede progress in this domain, including the need for sophisticated and expensive equipment, relatively low video and audio quality, privacy concerns, and challenges in measuring return on investment.

In navigating technical hurdles and contending with a relatively modest user base, we do not anticipate substantial advancements in these areas in the immediate future. Programmatic VR advertising requires strategic solutions and technological innovations before realizing widespread adoption and progress.

Sustainability Will Remain on the Headers

The pressing challenge of climate change necessitates focusing on sustainable business practices within the digital advertising sector. Both at the individual and corporate levels, there is a shared responsibility to address the climate emergency. Embracing sustainable change is not only a moral imperative but has also become crucial for business growth.

Consumers, increasingly conscious of environmental issues, demand accountability from brands, making sustainable practices a critical factor in purchasing decisions. Expect brands, vendors, and partners to drive meaningful change proactively. The changing landscape of requests for proposals highlights this shift towards sustainability, placing increased emphasis on disclosing information about sustainable practices.

Numerous companies and organizations actively guide the industry to reduce its carbon footprint. Despite progress, there is a collective recognition that there is always room for further efforts to create a more sustainable and responsible future.

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The Last Word

The AdTech industry is continuously evolving, characterized by changes in supply chain dynamics, the influence of political events on advertising, and the sustained growth of Connected TV advertising. Artificial Intelligence is increasingly shaping content creation and attention optimization strategies. The impending transition to a cookieless future necessitates the exploration of alternative solutions. Contextual advertising is gaining prominence as a strategy, and the global expansion of 5G networks is expected to impact online video advertising. Programmatic VR advertising faces challenges, while sustainability remains a focal point. In summary, the industry is adapting to these shifts and actively participating in the integration of new technologies.

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