New communication technology --including social media, wearables, virtual reality -- is turning the advertising industry upside down.
Consumer behavior is shifting rapidly towards these new modes of communication -- and the advertising industry is following suit. In 2017, digital advertising is expected to overtake TV advertising for the first time ever, pulling in $202 billion dollars in the process -- a sure sign of the irrevocable transformation of the advertising industry.
But as technological innovation continuously redefines the landscape of advertising, many advertisers are struggling to keep up. Modern advertisers are confronted with the daunting task of riding this massive wave of technological change in the ad industry without getting drowned by it.
Traditional media strategies that were built around loose branding budgets and just a few reliable channels are no longer viable. Advertisers without a roadmap for this uncharted terrain are quickly becoming lost in forests of inaccurate data they can't make sense of or dark caves of illusory tech that yield no light at the end of the tunnel.
With that in mind, I've compiled a list of the three most important trends that are shaping the future of advertising -- and will continue to do so -- and included some tips on how to take advantage of them.
Trend 1: Ads are becoming more dynamic and personalized
What does this mean?
In the modern 'attention economy' where consumer attention is divided across more devices, applications and formats than ever before, only engaging and relevant ads will command consumer attention. Advertisers are creating content that engages their target audiences in ways that are most likely to command their attention -- in-feed videos in social media feeds, interactive banners in games in virtual reality headsets and native placements browsing popular apps. Across all of these formats, behavioral profiling technology allows advertisers to personalize these messages to their audience based on their browsing history, location, time of day and demographic profile.
What can you do about it?
First, create content specifically designed for that formats that align with your audience's browsing behavior -- this will ensure that your ads are engaging. Choose inventory that is interactive and collects rich data. Put systems in place that profile your audience and match your content to their interests and behaviors -- this will ensure that your ads are relevant.
Trend 2: Advertising channels are becoming automatically integrated
What does this mean? A
s consumers divide their attention across devices, their behaviors become more complex. Advertisers are developing integrated strategies that deliver ad sequences to consumers as they check their email at work on desktops, watch movies at home on connected TVs, play games during their commute on tablets and post socially on their phones at a concert. Real-time audience optimization makes it possible for advertisers to identify and target consumers second by second to deliver timely ads that facilitate desired behavior.
What can you do about it? Automate as much of your advertising process as possible -- configure your advertising mix so that as many channels as possible communicate programmatically with one another in real time. This prevents your channels from competing against one another and optimizes the efficiency of your ad placements -- and makes less work for you. Select advertising partners that are willing to integrate with one another.
Trend 3: Transparent attribution is tying all ad spend to hard data
What does this mean?
The concept of a 'branding' budget -- whose performance cannot be quantified -- is obsolete and is quickly being discarded across all advertising channels in favor of direct-response metrics. New data streams and attribution models in advertising are making it possible for advertisers to understand the entire conversion flow of their customers. These increasingly complex models attribute proportional credit to each advertising touchpoint over the course of the consumer journey show the relative performance of every channel.
What can you do about it?
Reorient your advertising budget towards performance by tracking where each and every dollar is going. Develop a holistic understanding of your marketing funnel that eliminates 'branding black holes' and accounts for each and every channel's contribution towards your bottom line. Demand transparent performance reports from all advertising partners and use this information to develop a holistic attribution model that spans all of your channels.
The Last Word
The advertising industry is sure to change even more in the next ten years than it did in the last ten. Awareness of these three enduring trends in advertising will enable you to unobtrusively deliver relevant ads to targeted consumers while collecting thorough data -- with whatever exciting new ad technology is available.
Stay on top of developments in advertising technology -- but don't overcommit. Avoid becoming too focused on any new individual component of your advertising mix. No matter how sleek a new piece of inventory looks or how thorough a new attribution report appears, each new improvement in technology will only be a component part of your overall advertising strategy. Remember... keep an open mind. As ad technology continues to develop, ask yourself if it fits into one of these three enduring trends described. If it does, and it aligns with your strategy -- give it a shot. The most successful advertisers in this data-driven future will be the ones who are willing to take risks on new channels, systems and processes.