4 Predictions for the future of advertising and digital marketing

I’ve always been fascinated with advertising; specifically, digital marketing. I think it’s due to the intersection in which it sits — part mathematics, part art, part communication. Plus, who doesn’t get that warm fuzzy feeling when you push a campaign live and start seeing people hit your website or app, interact with your creation and ultimately purchase! It’s usually the final step in what could have been years of work.

So I understand I’m approaching this from an advertisers’ point of view — I think over the past 5 years my startups, the ones I have managed or consulted for have collectively spent £20m+ between just Google and Facebook. However I’m very much a consumer, I watch Youtube, I browse websites etc. and I actually don’t have a problem with well put together adverts, creative and content.

I do have a problem with the select few that push it too far. The people who load a million scripts behind the scenes. The people who sell my data without my knowledge. The people who try and track every single little detail about me to “better target” me.

I wanted to take the next hour to reflect upon where I see the space evolving too. I should note that I’m in the middle of launching Downright — a startup that firmly operates at the intersection between brands and consumers. Let’s jump into the predictions!

1. Google and Facebook will have their duopoly challenged

If you want to push a digital marketing campaign live, chances are you’ll have to go to Google or Facebook. Google and Facebook attracted one-fifth of global advertising spending last year, nearly double the figure of five years ago. Google is by far the biggest media owner in the world and attracted $79.4bn in ad revenues in 2016, three times more than the second-largest, Facebook, which pulled in $26.9bn. The previous year Google took $67.4bn of ad revenues and Facebook $17.1bn.

With this duopoly in mind, advertisers (such as your startup) are hoping for emergence of legitimate third player to help keep prices in check. For ad agencies, the matter is a little more important: Google and Facebook have the resources to deploy entire teams to work with marketers directly, cutting out them out completely.

To compete with Google and Facebook, other players will need to create premium content that appeals to advertisers or use new technologies that aren’t yet mainstream. They should be zeroing in on new spaces with no dominant player: promoting brands instead of specific products, using newer technologies such as augmented reality or virtual reality. But truth be told, once a successful player emerges in one of these new areas, one of the duopoly will swoop in and buy, most likely for an astronomical price.

Jumping from startup (who will most likely just get bought), many people believe Amazon, which has expanded successfully beyond its core retail business into areas like streaming video and artificial intelligence, has the greatest chance of taking on Google and Facebook. “Amazon is going to be an increasingly important force and one we have to better understand and link with effectively for our clients,” Martin Sorrell, the chief executive of ad holding giant WPP PLC said at the company’s annual meeting earlier this month. He said the company was “highly disruptive in many ways.”

2. Consumers will get their data back, and hold power

Let’s jump briefly into programmatic bidding for a moment; many herald it as the future of advertising. Put simply, programmatic bidding enables advertisers to target their audience. This targeting spans across where you live, what devices you have, and what websites you visit online. It enables companies to advertise to you in real time — on factors, for example, such as the weather.

For example, if you love reading Techcrunch but also love photography — it makes more sense for an advertiser to reach you through a less expensive ad on a camera blog than through Techcrunch. Programmatic bidding enables this.

Put even more simply, programmatic bidding simply means automatic.

So that all seems great – people are being shown relevant ads on relevant websites in real time. But are they? There is a dark side to programmatic bidding, and recently both Facebook and Google have come under fire.

Do advertisers have control over their ad placement? Most likely not. Havas became the first of the major global marketing companies to pull all its ad spend from Google and YouTube. It’s the world’s sixth largest marketing services group, spending about £175m on digital advertising on behalf of clients in the UK annually. The firm said it had taken the step after talks with Google had broken down because the tech company had been “unable to provide specific reassurances, policy and guarantees that their video or display content is classified either quickly enough or with the correct filters”. Other issues that arise are due to “bad actors”, which claim to have significant traffic, while not providing audiences with useful content or information and are only focused on getting traffic by deploying dodgy techniques. These guys affect the entire programmatic ecosystem.

Unreliable metrics. Related to the above bad actors, fraudsters are able to game metrics such as click-through rates (CTRs). In a world of last click attribution, the ecosystem really does push rewards toward the sites that generate suspicious traffic, thereby creating higher conversions in the dashboard. Overall unreliable metrics and these bad actors mean that there is no brand exposure and no actual meaningful consumer interaction. The very reason the whole system was built!

Did anyone see my ad? Programmatic bidding as you would expect, and as I stated above is automated. Therefore it’s high scale. When eyeballs are attributed to basically unique ID, it’ easy to game that unique ID and make it seem like eyeballs saw something, when in fact it was a bot. There’s a bunch of research out there that suggests direct media deals done between publishers and brands are more viewed and impact metrics more than those done through programmatic.

How does programmatic bidding survive in the age of ad blockers? We have seen a huge uptick in the usage of ad-blockers. If my mum is using one — something is wrong with the space. As a result, something needs to be done. First, quite simply, the technology is improving — all of the actors in the space know of the above issues, and with that much cash sloshing about, quite a bit of it is being redirected toward AI and smarter technology to remove those bad actors, and to ensure eyeballs are actually seeing ads. Further, there’s a lot of work being done on the tagging of adverts — which helps with the tracking. I know this point is already pretty long, but quickly I think blockchain will have a huge impact — the transparency, authenticity and the ability for companies to work together in a more seamless and efficient way will have a profound impact.

3. YouTube and Instagram will become a powerhouse, and cash in on influencers

Enough said really. Influencers on Youtube and Instagram have created a billion dollar market. It’s only a matter of time until Youtube and Instagram try and cash in on the deals being agreed off platform. At the moment they can only insert their contextual or targeted ads in between content posted by influencers. But if an influencer has got £20k for one post in a brand deal, a sum which would take tens of millions of impressions for the platform to generate, I’m sure somehow they’re going to start enforcing rules, and taking commissions. Made easier by the fact the FTC require the #ad, more on that here.

4. Better integrated ads within said media

Related to the above, content creators are probably the fastest growing channel at the moment. Over the next few years, the ability to interact with a video, click on an item of clothing a person is wearing and immediately be able to purchase will become a reality. We’re already seeing it with Instagram: