At the end of 2014, it was predicted that programmatic media buying would push UK ad spend over the £20bn mark in 2015. Whilst current data suggests the UK will now cross that barrier in 2016, last year has without doubt seen a phenomenal year of growth for the industry.
According to figures released in October by the Advertising Association/Warc, advertising expenditure reached a record high of £9,424m in the first half of the year, a surge which – combined with equally strong spending in other digital channels – has resulted in 5.8% growth overall throughout last year.
That rise in spend has understandably triggered a huge shift in how brands think and utilise their data. According to figures published on eMarketer in September, programmatic display ad selling alone will exceed £2bn in 2016. Furthermore, automated ads are expected to account for nearly 60% of the UK digital display market in 2015.
The issue is that the success of any programmatic strategy, much like any CRM strategy, is determined by the level of understanding a brand has around its customers. I predicted at the end of 2014 that 2015 would see a huge rise in large global brands using data obtained from non-traditional sources – including point of sale fulfilment information or shelf-level data. That seems to have come true in abundance.
As Marketing reported in July, Nestlé and Tesco are just two leading brands that are taking advantage of data-led ad technology. Establishing a richer level of data on customers provides a treasure trove of insights, which if leveraged in the right way, can have a huge positive impact on sales, especially when you deploy this knowledge across your ad campaigns and use it to target the right individuals. So what’s next?
The trick now is to see how this will manifest itself into even deeper connections and relationships in 2016. The approach that eBay, Nestlé and Tesco have taken is hard and fast proof of the right person, right message, right time approach in action. And that has definitely been a major development for this year as marketing and advertising campaigns have increasingly started to collide and become far more integrated than they have before. You only need look back to the events at this year’s Cannes Lions Festival – where there was a lot more talk around the collision of creative and data – off the back of the now infamous BA “Magic of Flying” campaign, which caused a storm in the industry last year when it won the Grand Prix award in the direct category, to see how much has changed.
Despite all these developments though, the process admittedly needs to be reformed to ensure an even greater level of precision is achieved, and then delivered. The experience has to translate into a positive and valuable end result. If a customer is unable to take advantage of a promotion or purchase a product they have seen advertised, the positive connection founded on solid interactions and beneficial data will inevitably break.
Which brings us on to cross-device marketing. This is where things get particularly interesting. According to Deloitte, 76% of the UK adult population now have a Smartphone. The way brands target consumers has therefore naturally had to adapt in response, and driven a huge surge in programmatic mobile buying. In fact, whilst (at the time of writing), the final figures for 2015 are yet to surface, in September eMarketer was already predicting that 56.1% of UK programmatic display ad spending would be going mobile, surpassing desktop and laptop spending for the first time. According to the IAB, the actual figure for ad spend on mobile was £1.08 billion in the first half of 2015, an increase of 51%. The figures released in October also showed that within display, video ad spend increased 56% to £292 million during the same period, acquainting to 22% of display revenue.
This shift away from traditionally siloed marketing strategies towards a more holistic approach to media buying allows brands to serve ads to customers far more seamlessly, at the most appropriate time.
With many questions still surrounding the EU General Data Protection Regulation, which serves to implement strict measures around personal identifiable information this year, the way brands are using and acquiring data is perhaps not working as co-operatively or as seamlessly as predicted. For some, the notion of opting into co-operation with other companies is far from becoming standard practice and consequently we are still seeing wasted impressions for wider audiences slipping through.
So where does that leave us?
For starters, programmatic has never been in finer health and as predicted it has definitely cemented itself as the future of digital advertising. Despite seeing vast amounts of growth, the industry has also faced a number of external challenges, and seen some markets accelerate strategies at variable rates. As the vice president for EMEA at Yahoo, Nick Hugh told Campaign that 2015 has seen a great deal of discourse enter the programmatic arena, with ad blocking and video dominating the agenda. That said, the focus on data and cross device attribution remain two of the biggest areas of opportunity as we now move into 2016 and closer to that £20bn target.