Five ways the ad industry is about to transform

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Technology has brought enormous changes to the advertising industry, changes that would have been inconceivable just ten years ago. People are accessing, consuming and sharing content in more diverse ways than ever before, and marketers have many new opportunities to understand, reach and interact with consumers. But at the same time, the ecosystem of technologies that supports online advertising has become so complicated and cumbersome that it’s actually harder for advertisers to invest more money to market effectively, jeopardizing the industry growth.

The next evolution of digital advertising must be driven by innovative platforms that more effectively help marketers advance their businesses. Technology will only be able to deliver on its promise of moving TV dollars online if it creates greater process efficiencies, drives commerce, and enables deeper engagement with consumers.

Fortunately, there are encouraging trends. Here are the changes I expect to see over the next year:

1. Automation will prevail. As automated or programmatic advertising technologies replace unwieldy manual media planning and buying processes that take too long and neglect critical consumer data, more (human) resources can be directed to the creative side of the house and to engaging and effective advertising that drives commerce, for example, native advertising, sponsorships, buyouts and other strategic initiatives.

Automation is also a win for web publishers. Programmatic advertising doesn’t mean publishers have to put their inventory to the highest bidder. It just means that they can make it available through a technology platform that makes it easy for buyers to access while setting premium prices. Programmatic advertising is about automation, not bidding.

Conclusion: Sophisticated technologies will serve to complement and improve the creative talents of humans by freeing up their time which has been – to a large extent – taken up with rote tasks such as fulfilling insertion orders for ad buys. Screenings around 22% of all digital media will be automated next year, up from just 4% in 2010.

2. Open ecosystems will succeed. Both Wall Street and Madison Avenue have lost patience with niche ad technologies that are product features disguised as point solution companies. Look no further than the massif sale last week of stock from ad tech vendors. For too long the industry has required marketers to manage multiple relationships with up to 40 vendors to execute online advertising. This is a significant deterrent to digital investment, as it creates more work than value for already stretched agencies and marketers. Those closed systems that require marketers to assemble a patchwork of feature companies will lose out, and a small number of open ecosystems that these feature companies can connect to will emerge to streamline the workload for agencies and marketers. We’ll see industry consolidation carry on in 2014 and witness the rise of open platforms that will dramatically simplify media planning and buying for everyone involved.

3. Mobile will drive sales for marketers. 2014 will be the year marketers demand device independent advertising. desktop display growth has been exceeded by smartphone and tablet, putting multi-screen advertising in the spotlight. The Association of National Advertisers and Nielsen have just announced that by 2016, approximately 50% of digital advertising will be multi-screen. We are already seeing this trend in our business with approximately 45% of all customers serving ads across multiple screens. Innovations and technologies – such as new targeting capabilities and new uses of data that enable marketers to get a single view of the customer across all screens are driving this movement, because ultimately account, a multi-screen strategy will generate the highest return for marketers.

4. Premium advertising will become more premium. 2014 will be the year that immersive ad experiences directly tied to a transaction begin to flourish on the web. As automation kicks in and time is given to agencies and marketers to be more creative, we will see a call from the industry for more premium opportunities that go beyond banners and become much more sophisticated and customizable. Whether it’s a new live ad run (think Oreos’ response to the 2013 Super Bowl blackout) or a commercial campaign that drives sales through content location-based, digital advertising will be remarkable, unique and experience-based.

5. Operational convergence will drive strategy. Technologists, creative art directors, and content producers can no longer operate in separate silos. With more consumer data being generated than ever before, marketing, data and technology need to be aligned. As this convergence accelerates, more holistic and integrated businesses will emerge and outperform their competitors.

I am convinced that these big changes in the industry will result in relationships between brands and consumers that are more transparent and based on the exchange of real value.

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