Five advertising trends you should know about
Advertising will be a topic of discussion in several sessions at the FIPP Congress, including advertising-specific sessions featuring the likes of Marcus Rich (Time Inc., UK), Scott Button and Kenneth Suh (Unruly, UK and USA), Rob Dembitz (Lions Festivals/Cannes Lions, UK), Patrick Scissons (GREY, Canada), Brent Bernie (comScore, Canada), Doug Quenqua (Campaign, USA) and Andrew Bailey (The&Partnership, USA). The FIPP Congress takes place from 13-15 October 2015 (register here).
Here are some of the trends to look out for.
Mobile overtakes desktop
Mobile’s dominant rise as a content platform and engagement tool for brands has been well documented. So how are advertisers responding? According to a recent eMarketer report, desktop ad spend still leads mobile by US$1.18bn. However, mobile spend is expected to double desktop spend within two years – reaching $49.81bn – so it’s clear mobile is now the focus of spend.
The report suggests mobile will not completely swallow up all digital spend, instead estimating that digital ad spend as a whole will continue to grow too. However, desktop spend will stagnate to around $25bn in the next several years, it says, and by 2019, mobile will make up a 72 per cent of total spend.
Mobile video
Mobile video in particular is seeing considerable growth. Business Insider Intelligence predicts we will see growth of 73 per cent by 2018, reaching $4.4bn in ad revenue in the US alone.
Brands have found video formats highly effective in engaging users and delivering stronger brand stories.
Native ads
Another much-talked-about area of advertising has been native advertising and, despite continued debate about transparency of sponsored content, native ads continue to grow in popularity. Almost two-thirds of marketers surveyed by the Association of National Advertisers recently, The Power of Native, said they will increase their native ad budgets going forward. Meanwhile, market research firm Statista predicts native advertising spend will double by 2018 – to around $8.8bn.
Of course, that level of investment remains only a fraction of overall advertising spend – as little as 5 per cent – with the ANA suggesting many marketers still say they don’t fully understand how native advertising works or what it is. It says others are put off by competing desires to increase transparency while presenting advertising content in a way that it’s hard to discern from editorial. Concerns about relevancy and how best to measure the success of the tactic also present challenges, say the ANA study.
“When compared to traditional advertising, native advertising was found to be more informative (32 per cent compared to 16 per cent), more interesting (27 per cent versus 19 per cent), more useful (21 per cent versus 13 per cent) and more helpful (15 per cent versus 10 per cent),” the report stated. However, native advertising was also perceived to be “less eye-catching” (21 per cent versus 23 per cent) and “less easy to understand” (23 per cent versus 27 per cent).
Programmatic’s rise
Programmatic ad spend now accounts for nearly half of all display ads in the UK and is worth close to £1bn, according to a study released by the Internet Advertising Bureau.
The IAB’s ‘Media Owner Sales Techniques’ study, conducted by research consultancy MTM, revealed that 45 per cent of display ads across the internet were traded programmatically last year. This was up from 28 per cent in 2013.
Total ad spend for display was £2.13bn last year, with programmatic accounting for £960m, the report said.
Meanwhile mobile (display and video) ads traded through programmatic doubled from 2013 to 2014 and the platform accounts for nearly two-thirds of sales volume for mobile.
Tim Elkington, the IAB’s chief strategy officer, said programmatic is estimated to account for up to 80 per cent of all digital spend by 2018.
“Some still consider programmatic primarily as a direct-response tool,” he said. “However, its increasing role in video ads – a branding medium like TV – shows programmatic is on advertising’s top table.
“Consequently, due to the rise in mobile and video ad spend, we estimate around 70-80 per cent of all digital spend will be programmatic by 2018.”
Making the right impression
An area of growing importance for advertisers is the measurement of performance and whether their spend is generating the kind of impact they want.
Until recently, digital advertisers were very susceptible to fraud. ‘Click fraud’ was a huge risk. Essentially, some people realised they could run up their competitors’ advertising bills by creating computer bots that automatically clicked ads. This practice became so rampant that fraudulent bot traffic may have cost the advertising industry as much as $11.6bn in 2014. New viewability technology and an advertising model called “viewable impressions” are eradicating both of these problems.
With viewable impressions, advertisers are only charged if the ad appears on a user’s screen for a minimum duration. According to the industry standard, for a display ad to count as a viewable impression, 50 per cent of the pixels have to appear on the screen for a minimum of one second. For video, 50 per cent of pixels have to appear for a minimum of two seconds. Bots can’t create fraudulent viewable impressions because they can’t complete the actions that distinguish a genuine user view from a false one.
However, in many cases, one or two seconds isn’t nearly enough time to engage a viewer – so the industry is expected to continue to look for ways to gain a true view od advertising effectiveness in the coming year.
John Wilpers, author of the sixth annual FIPP Innovation in Magazine Media World Report, released earlier this year, certainly agrees this will be a major issue in the near future.
“The disturbing trend we discovered this year which hasn’t been on the agenda in a big way before is advertising fraud,” he said upon release of the 2015 report. “Ad fraud is costing the industry US$6.3bn a year. Much of that comes from the clicks and responses businesses think they are getting from humans but which are actually coming from bot networks (groups of infected personal computers), which can now give the impression of being real people and can take a journey right to the point of purchase. Digital ad fraud effects between 10 and 60 per cent of all digital advertising, depending on the type (search, video, third party traffic, private exchanges, re-targeting, etc.)”
Hear more about these and other advertising trends at the FIPP Congress, which takes place from 13-15 October 2015 (register here) in Toronto, Canada.
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