Eight predictions for digital advertising in 2018

By Guy Phillipson

As we enter the era of mass personalisation, tempered by strict data protection rules, we at iCrossing gaze into our crystal ball to reveal eight predictions for digital advertising in 2018.

  1. The Duopoly will finally be breached

Google and Facebook have ruled the digital advertising roost for years, hoovering up nearly all the growth this year. After numerous failed attempts by pure plays to breach the duopoly, Amazon will emerge in 2018 as the realistic challenger. When it comes to searching for products, Amazon has no equal – and over 70% of us search Amazon at some point during a purchase journey.

It’s the rich consumer behaviour data that powers advanced targeting through Amazon’s Demand Side Platform (DSP) onto unique ad placement that will attract share of spend – plus, of course, the invaluable sales and data reporting so craved by the advertisers.

Expect 2018 to be the first of several big years for Amazon, as the duopoly becomes an oligopoly for the next decade.

  1. Watch out for a high profile bust after a short GDPR honeymoon

Friday 25 May 2018 will be a date etched in the history of digital advertising. When the day dawns, the General Data Protection Review (GDPR) legislation becomes law across Europe – and the UK has opted in. That means we have to gain specific, unambiguous consent to use personal data – including cookies, IP addresses, device IDs and so on. It all becomes personal data.

And while the likes of Amazon, Google and Facebook are sitting quite pretty with tens of millions of registered users, the opposite is true for the swathes of ad tech businesses most people have never heard of. I expect a short regulatory honeymoon period from the Information Commissioner’s Office, before investigations begin in earnest. We could see a high profile bust in the autumn.

  1. Could the Government finally announce legislation over harmful and illegal content?

This year has been an annus horribilis for brand safety exposures, from Jihadi websites, to fake news and even child abuse. So it’s no wonder marketers cite brand safety as their number one concern. This month the Prime Minister’s independent watchdog, The Committee on Standards in Public Life (CSPL) recommended that social media sites be recast as publishers to stop them describing themselves as platforms with limited control over the millions of messages and videos that they host.

This would have huge implications, and any future legislation could lead to fines or prosecution for not complying with new rules surrounding control of content and take-down. Watch this space over the next two years.

  1. Voice search reaches early majority

Voice search has already reached 20% of all queries. That’s critical mass in my business book, so we must be heading for the early majority on the old bell curve. With Google, Siri, Alexa and Cortana there’s a whole gang of virtual assistants taking our commands, and getting smarter in the process.

This will have a positive impact on our SEO strategies in 2018, as we optimise and generate content to respond to longer (and sometimes surprising) consumer voice queries. For those who do it well, this should become a seamless element of the modern brand experience

  1. Chatbots take over the sales and service front line

Businesses successfully implementing chatbots to help answer consumers’ questions in real time have realised great efficiencies in customer service and sales conversion. And it turns out customers love the convenience of chatting with a virtual assistant – just be sure yours is an intelligent one who knows when to hand over to a real human being if the questions get harder.

Your customers expect excellent, fast service and in 2018 we’re going to witness the emergence of some seriously talented virtual helpers.

  1. AI rules ‘mass personalisation’ targeting revolution.

Once upon a time, demographic targeting was the height of sophistication. Now we’re entering the era of advanced audience insights. Not just time and place, but known consumer likes and dislikes, search, social and purchase history, even preferred formats.

It’s that ‘big data’ we kept talking about five years ago that can now be analysed in nanoseconds with artificial intelligence to customise messages in the moment. Welcome to the era of mass personalisation.

  1. Wholesale shift of programmatic to private marketplace.

Programmatic ad trading is highly advanced in the UK, and in 2018 we expect a whopping 80% of display spend to pass through the trading desks. In the early days, nearly all the programmatic spend was on open exchanges, but as the market matured and the big publishers started to take part we saw growth in the Private Marketplace (PMP) offering premium inventory.

While the open exchanges gave us access to millions of consumers on thousands of sites at low CPMs, the brand safety and fraud risks were higher. Witness then the inexorable rise of the PMP which should cater for around 75% of programmatic spend in 2018, with growth formats in video, native and high impact display. Again – it’s all about the brand experience.

  1. Static banners die off as video becomes all-pervasive.

The first ever online ad was a banner for AT&T on www.hotwired.com back in 1994, and for almost 20 years the majority of digital display spend went on banners, skyscrapers and things called ‘mid-page units’. These formats have not only been in decline for the last few years, but the far more dynamic and engaging video, social, native and paid content ads are due to account for three quarters of online display spend. All very much better for the consumer experience, and improved brand engagement for the marketer. Which also means…

A bonus prediction… CPMs will go back up (at last).

OK – I’m sticking my neck out for the publishers here. After years of decline, following not just the recession, but a veritable tsunami of cheap content available on the exchanges – which led to ad blocking, ad fraud and brand safety issues – we took a long look at what actually worked and what the consumer might actually accept.

So, given the above predictions for the continuing growth of video, content and native, traded on private marketplaces; and the associated declines for static display formats and spend on open exchanges, the outlook for CPMs is…. pretty encouraging.

So there we are. As always, the New Year is full of exciting and innovative opportunities, but it’s also tinged with tough challenges as the digital ad industry continues to mature and take the lion’s share of media budgets. We at iCrossing are all over this stuff, but, like everyone else at this time of year, we’ll press pause for a few days before whacking the fast forward button in 2018.

Guy Phillipson is the chairman at iCrossing UK and the former chief executive officer at the Internet Advertising Bureau UK.

Source: TheDrum

 

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