The Future of Advertising

I am delighted that we are sponsoring the MartetingDirecto.com ‘future of advertising’ (FOA) conference later this month. As a company that sells technology solutions to ad agencies and marketing and communications businesses, the future of advertising is a topic we are very interested in. This year’s event is on the 15th March and has a mix of online and in-person (in Madrid) and has an amazing lineup of speakers, round tables, and sessions. I’m really looking forward to it!

The team at marketingdirecto.com also asked us to write an article about the subject and my colleague, Carla Sandoval, wrote this excellent piece. However, this is always a topic that evokes a lot of discussion and commentary. After all, this is at least the fourth year that marketingdirecto.com has held the event. So here are the major trends to watch out for the future of advertising.

How is advertising changing?

The "post cookie"world

If you are not aware of Google’s plan to stop supporting cookies by the end of 2023 then you probably don’t work in marketing or advertising. Cookies have been a great source of information on user browsing habits which allows advertisers to target prospective buyers. The problem is that they raise a bunch of privacy concerns. That’s the reason why we as consumers are asked to accept them every time we go to a new website. This way, we get to choose if we want to accept them or not. Google’s decision suggests that this was not enough. The challenge for businesses is to source new, effective, and compliant ways of reaching their audiences without invading their privacy.

Not surprisingly, Privacy is one of the round tables in the FAO summit and it starts at 11.45 local time.

Artificial Intelligence (AI)

We wrote a couple of articles about this topic earlier this year because this will revolutionize every industry, not just advertising.

AI beginning to dominate advertising execution and even creeping into the other disciplines. In fact, it’s interesting to note that 2 of the speakers come from businesses that are based on AI.

Tidart exemplifies some of the points that we made about how AI is impacting the industry. It uses personalized algorithms, bots, and optimization tools to help clients meet their advertising objectives. This no doubt leverages a big chunk of machine learning.

Quantcast specializes in AI-driven real-time advertising, audience insights, and measurement.

One of the biggest opportunities for AI is programmatic. ML technology algorithms analyze people’s online behavior, to enable real-time campaign optimization. This allows to target messages to audiences with the highest chance of conversion.

According to an article by Accenture, although advertisers only use programmatic for 17% of their inventory, that number is expected to double in the next 2 years. Advertisers are well aware of this as it seems as many as 85% of advertisers are using it.

In the future, this programmatic will also be used in TV advertising

Personalization

There are very good reasons why cookies and AI (specifically programmatic) are keys to the future of advertising and that’s because consumers are becoming more and more “resistant” to irrelevant generic ads. Let’s be honest, when did you last see a website banner? I mean they are on most websites that we visit but we don’t see them anymore because we have learned to filter them out.

Consumers are only interested in seeing ads that are relevant to them but without impacting their privacy. Advertisers will need to move away from the ‘one size fits all’ campaigns and really segment their buyers to give them more personalized ads.

Research from Adlucent shows that 71% of consumers prefer personalized ads (in English)

Consumers are also looking for brands that they relate to and share their values so I expect to see more and more ads that. It’s not so much about the products but the brand. Simon Sinek’s “Start with the why” on steroids.

Just take a look at our favorite ads of last year to see what I mean.

The Internet of things/Technology

In the not-too-distant future, I see advertising continuing to proliferate into all the corners of our life, hugely enabled by the internet of things (IoT) and technology.

Smart TVs will be so smart that they will play ads based on your viewing habits.
Smart fridges will not only tell you that you’re running short of milk but advertise milk promotions.
Smartphones advertising products based on your whereabouts

The list is as endless as the number of IoT possibilities coupled with faster and faster networks.

Innovation: The Future of advertising agencies

I’m going to finish this article on a cautionary note because we don’t talk enough about innovation when it comes to advertising and innovation in all businesses in all sectors. Advertisers have relied on creativity to differentiate themselves which is fine but they must innovate.

This excellent Deloitte Germany article and accompanying YouTube video looks at 4 possible scenarios for the industry over the next 8 years. The thing that catches my attention is that the agencies struggle in 3 of the 4 possible scenarios.