5 Adtech Predictions For 2020

The market for advertising technology is expected to record exponential growth between now and 2023. But predicting how the landscape will truly shake out, especially given shifting regulatory and market sands, could be a little tricky, analysts say.

The market for advertising technology is expected to record exponential growth between now and 2023. But predicting how the landscape will truly shake out, especially given shifting regulatory and market sands, could be a little tricky, analysts say.

With 2020 just around the corner, we turned to the experts for their takes on what’s most likely to happen with adtech as we begin a new decade. They shared five predictions and how they may affect companies next year and beyond.

1. Privacy Regulations Will Make First-Party Data Even More Important

Organizations often struggle with collecting and understanding the information they gather from customers–first-party data–because of the “dirty” data problem. This is where inefficiencies in the way companies input, organize, and store customer information ultimately lead to database errors, making that information all but useless. Because overcoming this challenge can be time-consuming and costly, many advertisers started using third-party data instead. The trouble was, much of that third-party data was being collected from online users without their knowledge or consent.

Recently, using third-party data is starting to backfire, particularly among social media sites, which have been forced to re-evaluate and change how user information is collected. A rising tide of privacy regulations, such as Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act of 2018, also are making it much tougher to use tracking cookies and similar tools to target and personalize ads for people based on their online viewing habits.

According to Nicole Perrin, principal analyst for eMarketer, this trend is spurring a “big shift toward more reliance on first-party data and less on third-party data.” As a result, data and analytics solutions that help companies gain single views of their customers built around first-party data are becoming more prevalent. 

“The rise of privacy regulations will only make it more important for companies to have confidence that the data they’re using for marketing purposes is being used with consent,” Perrin told CMO by Adobe. “And working with accurate, reliable first-party data should help genuinely improve experiences for consumers.”

The pressure to use more first-party data won’t just come from regulators but from corporate clients and partners as well, added Liz Miller, senior vice president of marketing for the CMO Council.

“I would expect companies to start fielding harder questions from their clients about how data is being collected, and about their data collection processes, operations, ethics, and the partners they might be using,” Miller said. “In today’s age of data, privacy, and security, the risk we face in engaging with questionably sourced lists is too significant. If we keep doing that, customers will lose trust in our brands and stop doing business with us. We can’t afford that.”

2.  Creative Will Displace User Acquisition As Top Priority

This year marks the 25th anniversary of the first-ever banner ad, a small rectangular-shaped piece of web page real estate bought by AT&T on Hotwired.com. Since that time, advertising has never been the same.

An explosion of online ads, all aimed at securing as many customer views and acquisitions as possible, ultimately became white noise—a flurry of digital content that, over time, began losing its effectiveness for most viewers because everything looked and felt roughly the same.

Indeed, every brand started offering “the same digital experience because they all address the same customer needs, use the same technology platforms, and design for the same mobile use cases,” said Forrester principal analyst Jay Pattisall in the June report, “The Cost of Losing Creativity: The ROI Model for Agency Creativity.”  

“In our pursuit to be customer-centric marketers–to answer every customer need, want, and desire with digital–we have forgotten an important ingredient: creativity,” he said. “Most experiences look, feel and behave alike. All airline apps allow travelers to check in and manage flights. All QSR apps allow diners to order ahead and skip the line. All fashion experiences look the same. How can consumers tell one brand from another? What companies need is creativity to distinguish their brand.”

According to Pattisall, many advertisers recognize this issue, and the pendulum is now swinging in the direction of bringing creativity back into their core set of competencies. For instance, Accenture Interactive has been on a creative buying spree the past several years, acquiring Droga5, The Monkeys, Karmarama, and Fjord to boost its creative and brand communication capabilities. Deloitte Digital, in the meantime, has also deepened its creative bench with the acquisitions of Acne and Heat. Pattisall said he expects this trend to continue into 2020, with more advertising agencies emphasizing creative over customer acquisition numbers and statistics.

“These companies understand the value of creativity and that they need creativity to transform their own cultures as well as their clients,” Pattisall said.

3. Technology Will Increasingly Connect Teams–Not Just Channels

Marketers and advertisers understand the importance of pushing ad content and providing unified experiences for customers across every physical and digital channel they frequent. Omnichannel marketing has been king for several years now, and that isn’t likely to change.

But what about omnichannel communication among marketers and advertising professionals?

Today, the various teams involved in creating and disseminating ads often operate in their own lanes, only coming together around projects using a variety of technological tools that aren’t really optimized to maximize their communication and collaboration. What’s more, many of the existing adtech solutions lack the basic functionality to enable this much-needed level of interaction.

That could be changing, however, as vendors begin embedding features for advertising-centric collaboration within their solutions, rather than forcing marketing or advertising professionals to rely on more generic work environments.

“To be effective, most adtech should really include capabilities for unifying and automating all media, screens, data, and creativity at scale–but most of it doesn’t,” said Ryan Fleisch, head of product marketing for Adobe Advertising Cloud. “To deliver the right ad to the right individuals, you really need solutions that connect everyone involved in advertising projects, from the design team to the data team to the media buying team. In 2020, I think you’ll see this becoming a big adtech trend.”

4. More Companies Will Use Automation Technologies To Get The Most From Data

Most of the industry talk around technologies such as artificial intelligence (AI) and machine learning (ML) has involved programmatic ad buying or bid optimization. The idea was that by using programmatic ad campaigns, companies could cast a wider yet more targeted net across a broader set of channels.

But in 2020, industry observers see the interest in AI and ML shifting toward using these technologies for an arguably more valuable pursuit: automating their understanding and use of customer data.

It’s not that marketing and advertising professionals can’t do this on their own. They can, and do. But with 2.5 quintillion bytes of data created every day, it’s simply no longer humanly possible to make sense out of that information quickly and accurately enough for it to be used in a timely manner. AI and ML can help automate that process and provide human beings with snapshots of trends and recommendations they can act on to deliver the right messages to the right customers across the right channels.

“We’re not seeing traction on this just yet,” Fleisch told CMO by Adobe, “but in the next year I think AI and ML will serve a wider purpose in making actionable recommendations for advertising agencies.”

5.   Vendors Will Start Trying to Bring CDPs and DMPs Together

Achieving a single customer view to fully understand a person’s purchase journey has been the Holy Grail for marketers and advertisers for years. But getting there with current technology remains challenging. Customer data platforms (CDPs) provide a solid apparatus for storing information about known customers, and data management Platforms (DMPs) do a nice job of bringing together anonymized data. And while most marketers would agree it would be advantageous to merge the two into a single repository of customer information, doing so is both technically and legally challenging.

That’s because these are two very different systems–with different data structures–designed for their own very specific purposes. What’s more, because DMP data has been anonymized, merging it into a CDP with non-anonymized data would have huge privacy (and therefore regulatory) implications.

There is some data synchronization between the two, with CDPs pushing audiences to DMPs, and DMPs pushing marketing results back to CDPs for analysis, noted David Raab, a CDP analyst and founder of Raab Associates. But it’s difficult to have one integrated system that does what both CDPs and DMPs do.

That won’t stop vendors from trying, though, said Tina Moffett, a Forrester analyst who closely follows the DMP space.

“I predict the large martech vendors will get ahead of this by making needed investments in 2020,” she told CMO by Adobe. “The vision of bridging together data from CDPs and DMPs could potentially be a reality if big martech vendors can find a way to unify anonymous and known customer records while also addressing privacy and consent management hurdles.” 

Companies should start planning as if this will eventually happen, Moffett suggested. To stay one or two steps ahead, they might want to experiment with their DMPs beyond traditional digital media buying, such as applying DMP audience insights to email campaigns or television targeting strategies, she said.

Moffett also advised companies to closely monitor vendor moves to bring CDPs and DMPs together, especially with persistent customer IDs, because opportunities may exist to get a head start on game-changing technologies.

Big Picture: Prepare To Pivot

Whether these predictions come true, all indications point to something changing in each of these areas in the next year: use of first-party data; utilization of more creative content; the need to better connect advertising professionals on projects; expanded use of AI and ML for influencing customers; and creating an effective central repository of customer data.

Marketers and advertising professionals will want to closely monitor these changes, adjust, and look for hidden opportunities to use adtech to provide maximum value to customers in the upcoming new year.

 

An advertiser’s guide to higher return on ad spend.

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