5 trends to watch for in programmatic advertising in 2016

Programmatic advertising is gaining momentum. This process of purchasing online ads through an automated process is changing the way media companies and advertisers think about advertising.

Here are five programmatic advertising trends to watch for in 2016:

1. Programmatic advertising goes mainstream

Programmatic advertising — which uses software to tailor ads for individuals or demographic niches — is the buzzword of the moment. A lot of advertisers and brands have heard about it and may even have purchased an ad or two, but it isn’t mainstream yet. That could all change in 2016.

As with any new approach, it takes time to catch on. Some worried programmatic advertising was a phase, others weren’t sure of its viability. Mounting statistics show programmatic advertising is here to stay, which explains why eMarketer predicts programmatic ad spending will account for 63 percent of all digital ad display spending in 2016.

2. Cost of ads will increase

With increased popularity come increased prices. That’s not to say prices will skyrocket to a deal-breaking point, but the increased demand will drive up costs.

Because more people are coming to the programmatic ad table, they could seek ad opportunities that are out of the norm. That’s why private marketplaces could see more activity. Private marketplaces are invite-only arenas where advertisers can select and buy ads from elite publishers.

Prices paid for ads in private marketplaces are typically 3.4 times the price of those won through an auction or real-time bidding, according to MediaPost.

3. Programmatic expands into TV

Programmatic advertising is synonymous with online ads, but that is likely to change next year. In 2016, programmatic advertising will include TV ads. Radio and print could join the group, too.

More TV shows and movies are streamed online through sites including Hulu, which could provide advertisers with another avenue to reach targeted audiences.

Hulu has already jumped on board the programmatic bandwagon, as have several satellite providers. Big networks like ABC could be next.

4. Beyond banner ads

Currently, banner ads are the popular ad choice within programmatic advertising. Next year, banner ads will start to lose their Prom Queen status. Video, rich media ads and sponsorships, which are still sold through traditional sales methods, will become viable options.

eMarketer predicts programmatic video ads will account for 40 percent of digital video ad spending in 2016.

It’s likely these newer options will start out in the programmatic direct arena, where online spots can be purchased in advance for a specific price rather than through the auction process of real-time bidding.

5. Ads made with dynamic creative technology

More advertisers are going to use dynamic creative technology to create ads in the future.

Rather than creating a generic banner ad with one color, message and call to action, dynamic creative technology creates several ads and tests them to see which resonates best. As data are collected, ads that perform well are used over lower-performing ones.

It’s another way to fine-tune an ad campaign to optimize its results.

To be sure, programmatic advertising is a rapidly evolving area of marketing. Many companies will benefit from working with outside experts. Such a relationship can ensure that organizations receive the best return on investment from their programmatic advertising – and otherwise.

Sources:

eMarketer: http://www.emarketer.com/Article/US-Programmatic-Ad-Spend-Tops-10-Billion-This-Year-Double-by-2016/1011312

MediaPost: http://www.mediapost.com/publications/article/256809/programmatic-market-trends-show-its-the-data-stu.html