As they say, there is one constant in the world of AdTech…and that one constant is change. That axiom should remain true in 2024 as, like usual, the industry has been presented with some new developments in the last 12 months.
Here are some thoughts on what I expect 2024 to bring:
Artificial Intelligence (AI)
To borrow a song title from Toby Keith, in 2024 advertisers will be looking for “a little less talk, and a lot more action” on the topic of AI.
Despite all the talk about AI writing its own programs to execute AI functionality, implementing meaningful AI capabilities throughout the AdTech stack will still take efforts by experienced programmers. Most AdTech players are very familiar with machine learning, a branch of AI which has been long used to automatically optimize ad campaigns to achieve the desired KPIs.
Now, with the rapid advances of generative AI, platforms will be working to incorporate new AI-based functionality. These will include:
- Creative Automation – New AI tools are enabling rapid creation of ad variations, across not only display but also CTV/Video campaigns. With the ability to quickly and cheaply produce multiple messaging variants, advertisers will look to replace broadly targeted national and regional campaigns with more tightly targeted campaigns, whether those campaigns are targeted by more precise location or by more precise audience attributions.
- Insights – Adtech platforms for years have produced reams of data about campaigns, including information about types of audiences, content, devices, time windows, creatives, and other factors that deliver incremental performance to the advertisers desired KPIs. In the past, distilling multivariable data into meaningful, actionable insights has required experienced humans to review and extract relevant takeaways. In the last year, AI functionality has broadened to include automated data analysis. We can expect this sort of functionality to be incorporated into reporting platforms in AdTech.
- Media Planning – Historically, the process of omni-channel media planning has relied heavily on human experience and judgment. While this process has seen significant automation over recent years, new AI capabilities will accelerate this trend. In particular, AI will bring the ability to quickly analyze dozens, hundreds, or thousands of past campaigns for performance against a particular vertical, location, or product. This should lead to more efficient advertising spend, with campaigns launching that have already been “pre-optimized.”
With the global market for AI in advertising predicted to reach more than $100 billion by 2027, AI’s impact in advertising will accelerate in 2024 and see more “action” than in 2023, when there was a lot more talk.
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Democratization of TV Advertising
Digital advertising, in general, is famously democratized. Advertisers of all sizes, including those with small budgets, can quickly launch campaigns across search, social, programmatic, and other types to achieve positive results.
TV advertising, on the other hand, has been dominated by a few hundred large advertisers. In the past, smaller advertisers were excluded from TV advertising by barriers that included the high cost of developing quality TV creatives, high minimum spend requirements from broadcasters, and limited geographical targeting capabilities which required advertisers to purchase advertising in locations outside of their targeted areas.
CTV, along with AI capabilities for generating creatives, are now making it feasible for smaller advertisers to efficiently access the power of TV advertising. In particular:
- TV advertising can now be bought with small budgets
- Local advertisers can now target audiences much more precisely by:
- Reaching users at the ZIP code level.
- Targeting individual households with a wide range of demographic variables, including income levels, occupant ages, presence of children, cars coming off leases, political affiliations, and many more.
- Activating first-party data to existing customers or prospects.
Chrome Cookie Deprecation
It would be a dereliction of duty to write an article about AdTech in 2024 without mentioning the much-discussed deprecation of third-party cookies on Chrome browsers.
Since inception, the AdTech industry has been subjected to a variety of topics that have been presented as existential threats. Ad blockers, GDPR, ATT (app tracking transparency), ITP (intelligent tracking prevention) bot traffic, Google/Facebook dominance, MFA sites are some of the issues that have threatened the industry.
However, the AdTech industry is populated with nimble, resourceful, experienced, forward-thinking, adaptable companies. When threats have presented themselves in the past, the industry has developed and deployed solutions that both comply with ever evolving regulations and expectations, and also deliver results for advertisers.
With Google Chrome’s cookie deprecation, I expect the same result. Privacy friendly identity graphs will be deployed, some budgets will shift to contextual and other content-centric targeting, 1st party data will be used more broadly, Privacy Sandbox capabilities will be incorporated, and a variety of other solutions will be implemented. While there will be some winners and losers, the AdTech industry will continue to thrive throughout this most recent change.
Political Advertising on CTV
For the 2024 election cycle, advertising spend for candidates and advocacy issues is expected to reach nearly $16 billion, an increase of more than 31% over the 2020 presidential year. Historically, a majority of political advertising spend funnels through to local broadcast TV outlets. But as younger voters tap into online and social media to view their preferred content, campaigns and agencies will need to tap into CTV to reach that coveted demographic.
In 2024, more sophisticated AdTech tools will be used across CTV and other streaming outlets that empower political campaigns to educate, fundraise, and encourage voters to volunteer and head to the polls on election day. CTV advertising solutions will enable political advertisers to engage with voters down to the zip code and household levels without infringing on privacy issues.
Entering the AI era of AdTech
2024 will be a year of continued evolution for AdTech, especially as AI evolves and enters new sectors across the advertising industry. The ongoing trend of automation and localization will continue, driving improved performance for large and small advertisers alike.
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