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| What Changes Will Take Place In The Digital Advertising Market |
The year 2021 has been a year of transformation, both in the world as a whole and in the advertising industry. Tired of waiting for the pandemic to end, people, corporations and the community began to explore the future and take steps to change it.
New challenges
It was in 2021 that global marketing spending recovered significantly, returning to a higher level of advertising spending than the pandemic and showing a 7.2% increase to $ 1.366 trillion. And the biggest contribution to this growth was made by digital media: their share of total advertising spending increased from 40% in 2019 to 51% in 2021. The new wave of market consolidation shows that the industry is in full swing and evolutionary processes are resuming: the acquisition of Flashtalking by Mediaocean, the acquisition of Smart AdServer by Capital Croissance, the acquisition of Publica by IAS, the acquisition of DataFleets by LiveRamp and many others.
The cookie apocalypse has also come to an end: in June 2021, Google announced that it was postponing the blocking of third-party cookies in Chrome to 2023.
The cookie apocalypse has also come to an end: in June 2021, Google announced that it was postponing the blocking of third-party cookies in Chrome, which was previously scheduled to launch in early 2022, to 2023. This gives all players more time to find and test new solutions. However, the market has already undergone significant changes that will have to be taken into account in the future. This includes the announcement of Facebook's transition to the metaverse, changes introduced by Google (Core Web Vitals updates, as well as the transition from last-click attribution to data-based attribution), and the growing pandemic boom in the CTV advertising market, and many other changes.
These changes were also reflected in the Ukrainian market. According to the assessment of the market of marketing services by the International Association of Marketing Initiatives, in 2021 the Ukrainian market showed growth in all categories of marketing services by 12%. Delayed demand, which had accumulated despite quarantine restrictions and lockdowns, worked and has grown rapidly this year. According to IAB Ukraine, the percentage of companies with a large (over 30%) share of the budget for 2021 for interactive advertising exceeded 55%.
In addition, the Ukrainian market is well educated in the availability and variety of interactive advertising tools. SMM and banner advertising are used by the vast majority of companies (91% and 89% respectively). It is also worth noting the practice of using Programmatic technologies and specialized Mobile formats. The IAB Ukraine survey shows that budget growth is expected primarily in video and native formats, while performance - mobile video (60% of respondents), Influencer marketing (54%), SMM (43%), Search (43%). And all this is just the beginning, so it is worth keeping an eye on the pulse of innovation.
The role of technology in advertising the future
Undoubtedly, all these changes would not be possible without the development of technology. It is the technological part that is the rocket (particularly in digital advertising), which makes companies more efficient. Let's briefly outline a few factors that will remain influential and significant for the advertising market:
New communication standards as a way to digital transformation and change user behaviour
5G and Wi-Fi 6, which are becoming available in more and more areas, will provide faster connectivity. This will inevitably result in a change in the very idea of ​​the organization of the work process. Yes, the boundaries between remote and office work are becoming increasingly blurred, and eventually, disappear altogether. The vast majority of IT executives expect to work outside the office in the future using compact and intelligent devices. "Hybrid" employees will actively participate in video conferencing and make phone calls from anywhere. The behaviour of potential users is changing - and this will need to be taken into account.
Contextual intelligence
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| What Changes Will Take Place In The Digital Advertising Market |
Sooner or later, however, cookies will eventually be a thing of the past. Therefore, new targeting solutions are already actively appearing and being tested, which will only speed up this process. Thus, the priority of the industry was Contextual intelligence: instead of focusing on the previous history of user behaviour, thanks to the latest developments in ML and NLP, advertising can reach users with the right mindset and deliver advertising messages on time. It is enough to configure the system that will track it, and according to the given logic select the appropriate advertising parameters for targeting.
Safety above all: raising the bar of brand safety
Blacklists are also a relic of the past. Advertisers are more demanding about which sites and in which context their advertising is displayed, as well as the content. The next generation of brand security controls is likely to combine keyword filtering, contextual categorization, and tone analysis.
Social networks: more privacy, quality and algorithm settings
The platforms will focus on privacy and the quality of content. Despite recent public criticism, Facebook is likely to continue to grow in both several users and revenue. Given the need for both security and social media content, all major platforms are likely to update their privacy policies and set up their algorithms by the end of 2022.
A new generation of creative influencers is also expected to grow and spend on advertising on the most popular social networks, which offer a wide selection of short video content - Instagram and TikTok. Attention is also being paid to direct sales and fast customer service, which have so far paid insufficient attention to these platforms.
Aa The growing role of artificial intelligence
Artificial intelligence may well change the way we look for ideas, create, enjoy food, fashion or look for work. Michael Spranger, chief operating officer of Sony's artificial intelligence team, explains that the shortage of manpower has prompted many organizations to use AI to assess candidates. The latest developments in the field of machine learning and artificial intelligence can be learned and retrained independently based on collected data in real-time. This allows you to quickly find the hidden logic and predict the desires of users instead of analyzing their past behaviour.
Reformatting the creative industry
The emergence of new technological solutions and expanding opportunities have resulted in the formation of new approaches and methods of work in the advertising industry. Some key trends:
Video marketing as one of the priorities
Content consumption is increasingly being reformatted towards short videos. Yes, Google said YouTube has more people aged 18-34 and 18-49 than any other network in the United States. Facebook reports that video posts attract six times more attention than posts with images or links. Let's also not forget how popular Tiktok has grown in recent years, especially in Ukraine. Video content allows you to quickly connect with the audience: it gives a voice to the brand, strengthening the trust and loyalty of customers.
Flexible planning
Digital marketing allows marketers to see the user's reaction to advertising in real-time and quickly reformat their strategies. At the same time, the pandemic shook sectoral arrangements and reduced planning horizons. Nowadays, brands are more accustomed to and tend to plan advertising campaigns on a short-term basis.
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| What Changes Will Take Place In The Digital Advertising Market |
Reorienting users to digital media
In the early 2010s, the Ukrainian media market discussed whether the Internet could replace the classic media. Yes, the TV advertising market is still one of the key ones. 26% of companies surveyed by IAB Ukraine redistributed the TV budget to in-stream video and 17% - to mobile video. At the same time, up to 10% of respondents set a single budget for video advertising (TV + digital). Most companies (20-30% of respondents) try to allocate additional budgets in the digital video while maintaining the level of presence on TV. However, both the pandemic and the development of technology are constantly pushing users to move online.
Customer needs as the main focus of marketing strategies
Content marketing still dominates the market, but approaches to its creation and positioning are changing significantly. Yes, the content of the future is authentic and humane: Generation Z increasingly expects a clear position on various issues from the marketing strategies of the brands it chooses. In addition, the content becomes more interactive, offering the user a unique experience. Finally, content focuses not so much on product presentation as on meeting the user's needs and providing them with relevant information.
Summary:
The future of advertising:
In 2022, the outlined trends are expected to continue to develop. Obviously, improvements in AI and machine learning models will create new approaches to analyzing user behaviour, and expanding 5G coverage will only accelerate the overall transition to online and, consequently, strengthen digital dominance not just as a method but as a full-fledged media platform. Flexibility in planning and strategy formulation will remain key throughout 2022 and beyond, and the content will be increasingly focused on customer needs and interests.
Ukraine is not out of the world. IAB Ukraine notes in the majority (69%) of the respondent companies in its study an increase in the number of employees engaged in interactive advertising and the reformatting of relevant departments. The growth of online advertising in 2022, according to forecasts, will be primarily due to video and search advertising, where the main drivers of growth today are and will be global players next year (Google, Facebook and probably TikTok's position).
Whether we will see the emergence of new digital multiverses and whether developments in the field of brand safety will come to a single solution that would satisfy all market players - is currently a question. However, one thing is clear: the ice is melting, the industry and customers are not waiting to return to the "pre-pandemic" rhythm of life, but are creating new approaches adapted to reality. Which, in turn, are already creating a new reality for us here and now.
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