Key Challenges and Digital Advertising Trends to Watch in 2019

#AR / VR
#Ad Tech
June 13, 2019 9 min read

In today’s world, where consumers prefer purchasing everything (from clothes to food) online, digital advertising has started significantly overleaping traditional media.

While the ad tech industry is now on the rise and developing in multiple directions, the task of deciphering the digital advertising trends is far from easy.

So, the purpose of this blog post is to:

  • First, identify the biggest ad tech challenges and determine the ways to overcome them.
  • Second, uncover major adtech trends and see how they are going to revamp the industry.

How big is the advertising industry?

eMarketer has reported that in 2019, the total digital ad spending in the US has increased by more than 15% compared to traditional advertising. Also, it is expected that by 2021, the number of digital ad spendings will approach $172.29 billion.

So, we can observe the active growth of the industry with many digital perspectives ahead.

Digital vs. Traditional Ad Spending

The Biggest Challenges Ad Tech Industry Faces Today

Do you know that today more than half of online ads spendings goes directly to waste? According to the Nielsen’ Measurement Breakthroughs report, 56% of advertisement campaign impressions are lost due to either fraud or off-target audiences.
Waste adds up to 56% of digital Ad spendDigital advertising is challenging. However, there are ways to adapt.

Challenge #1: Demand for Transparency

Transparency in the adtech industry plays a very important role. Björn Karlström, a product owner at Bannerflow, once said, “you need to know where your banners are served. And you need to know where your money is spent in the ad tech chain.” This makes sense because if you do not know what you pay for, you lose control over the budget you allocated to the ad campaign.

Publishers and advertisers are doing business, so their activities are oriented toward making money. However, such a fragmented economy makes media buyers pay a much higher price than it’s really worth.Digital advertising trends - pays for the service

According to the study, 42% of each dollar spent on ad publishing goes to the advertiser, while 58% goes to the publisher. Such figures show that the scarceness of transparency is a huge matter for media buyers.

How to overcome this challenge?

To create long-term relationships, you have to build trust with customers, and transparency plays a crucial role in this. It translates into the interaction between the advertiser and publisher as well.

Innovecs can develop a real-time analytics system that helps track all transactions to ensure total transparency over cost.

Additionally, the following tools and technologies can also be used:

  • Programmatic Fee Transparency Calculator, released by IAB in 2016, aims to add clarity to the cooperation of advertiser and publisher. Simply enter your budgets and planning rates into the calculator, and pick ad technologies applied for the campaign. After that, you will see the media plan totals and execution costs.Programmatic Fee Transparency Calculator
  • Blockchain can be utilized to provide transparent and secure data migration from advertiser to publisher. Additionally, blockchain provides the opportunity to carry out real-time transactions where the price is visible to everyone participating in the supply chain.
  • There are a few ad tech platforms that are oriented toward tackling the transparency issue. Their key purpose is to remain transparent with media buyers by showing them how much they should pay, including all fees. Few platforms exist on the adtech market, but you can try Havas or Apomaya to understand how they work.

Challenge #2: Cross-Border Complexity

This challenge involves attracting and retaining global customers, which requires multi-currency billing options.

For example, customers from around the world rely on you to provide them with ad tech services. They are able to pay for these services, but the problem is that your solution may not accept their typical payment methods.

To achieve customer loyalty, your task is to provide them with the opportunity to convert money on your side at acceptable exchange rates. For this, you need a secure and sustainable platform that will be able to execute various multi-currency scenarios.

How to overcome this challenge?

Innovecs knows how to facilitate cross-border, multi-currency operations. With deep expertise in the development of ad tech software, our engineers can develop and maintain an intelligent billing platform that will support multi-currency transactions.

Other methods for overcoming this advertising problem include the following:

  • Integrate a currency converter into your ready-made platform. Find an application programming interface (API) that provides access to the maximum amount of world currencies and updates currency exchange rates on a regular basis. You can try such APIs as currencylayer, Fixer, or XE Currency Data.
  • Provide your customers with the opportunity to use major payment gateways such as PayPal, Authorize.Net, Stripe, SecurePay, 2Checkout, and Payline. Such a diversity of payment options will help attract and retain global customers. Additionally, many of these payment solutions enable you to exchange currencies.
  • Adjust prices for ad services by taking into account average rates across a certain country. While one price can be acceptable for the representative of one country, it can be too high for the other. For example, see the difference in prices for Facebook’s ad by countries.Facebook Ad CPC by countries

Challenge #3: Disruptive Technologies

Technological innovations have started to dramatically penetrate the ad tech industry. Artificial intelligence (AI), augmented reality (AR), Internet of Things (IoT) and others are most popular.

For example, in 2018, Google launched a beta test for automated ads on the basis of AI. As a result, they received a 10% revenue increase for publishers.

Companies that can quickly adapt to the technological boom will survive and gain a competitive advantage. However, those that are not ready to innovate and respond quickly to new technologies are in question.

How to overcome this challenge?

It is not an easy task to change something that already works well.

Advertisers that continue using traditional means for their advertisement campaigns will find it difficult to switch to emerging technologies.

To overcome this challenge, it is crucial to be aware of cutting-edge technologies in online advertising trends. The next section is devoted to this.

Digital Advertising Trends You Have to Adjust Your Campaign

The ad tech industry has seen a huge amount of technological transformations over the last few years. Artificial intelligence, augmented reality, Internet of Things, and location-based ads are the key directions that keep evolving.

Artificial Intelligence

Artificial intelligence is one of the ad tech trends that help ad tech companies in a number of ways.

First, AI-based chatbots help interact with the audience and motivate them to buy your products. With the help of artificial intelligence, chatbots can read data and make decisions. Depending on the questions asked interests in the dialogue change. With each additional question, the system has to change the positioning criteria of the customer in a particular social group. This lets it show exactly the items the customer may want to buy.

Second, AI helps in ad positioning. By employing machine learning algorithms generated on the basis of big data, AI automatically sorts ads and shows them to relevant audience segments. Innovecs has experience in developing and running AI-based algorithms for accurate categorization of audience segments to make ad targeting more focused and cost-effective.Customer Data Third, this advertising trend helps to optimize ad mediation, which is the process of sending ad requests to different networks to ensure that publishers come up with the best network for filling their ad slots. AI performs this mediation automatically.

How does it help ad tech companies?

The significance of AI in advertising is apparent. This trend enables companies to:

  • Show AI personalized advertising to the target audience
  • Make the interaction with customers soft and natural
  • Target ads more accurately by minimizing human effort
  • Reduce errors by applying a data-oriented approach to network selection
  • Save time by automating the process of ad publishing

Advertisement agencies have already started benefiting from AI. For example, CafeMedia applies artificial intelligence to tag their inventory and organize it properly. Huddled Masses and Rocket Fuel use AI for determining which ad impressions to bid on to reduce cost.

Augmented Reality

Marketing and advertisement based on augmented reality are in their infancy right now, but both the public and marketers are fascinated.

It has unlimited uses since everyone has a smartphone, and there is no need for special glasses. Shops can easily pre-install AR tools and get/send the info about/to customers when they pass by to increase the likelihood of them making a purchase.

When Pokémon GO was released, it became an instant hit, and with over 100 million downloads so far, marketing prospects of this app alone have been endless.

In 2019, you have the potential to learn about any product by simply scanning it with your phone. Then, a message will pop-up telling you more about it. You can also download an app to overlay a projection of a chair you’ve seen in a store today onto your living room before buying it. All of this opens up endless options for creative and engaging augmented reality ads.

Innovecs participates in the creation of interactive, AR-driven ad solutions to help companies attract more customers.

How does AR help ad tech companies?

Augmented reality is a new approach in adtech, but this advertising trend has a huge potential that makes it possible to:

  • Deliver contextually-relevant ads that stand out
  • Enhance customer experience by making it immersive and distinctive
  • Increase customer loyalty by providing interactive ads

See how Blippar, a visual search and discovery app-maker, has tried to experiment with AR ads:

Internet of Things

In 2010, Hans Vestberg, CEO of Verizon Communications, predicted that by 2020 there would be more than 50 billion Internet-connected devices. Now, it’s 2019 and we have 26 billion, which is less than predicted, but the amount is still huge. Internet-connected devices

IAB has reported that 65% of people in the US with IoT connected devices are willing to receive ads. This opens up space for advertisers.

First, due to the internet of things, it has become possible to bring ad targeting to a new level. IoT provides access to customers’ data around the clock. This means advertisers will know what you did yesterday on the Internet, what you were searching for, and how much time you spent on a specific page.

This trend makes it possible to build a detailed customer portrait, including their mood, interests, health state, and many other factors. This information will allow advertisers to create ads that will resonate with the target audience.

Innovecs’ engineers develop IoT-based software for reaching target audience faster. We can provide various gateway and cloud solutions, and facilitate system integrations to achieve better results in your ad campaign.

How does it help ad tech companies?

Needless to say, IoT is a game changer in the advertising industry. It helps companies to:

  • Know their customers better, which allows for more accurate and efficient target ads
  • Provide customers with valuable products, which in turn increases user engagement and satisfaction
  • Enhance the overall effectiveness of the ad campaign

Location-Based Ads

Increased connectivity is a tool through which you can boost your advertising options.

Let’s say you go to a store, stop near a screen, and have a look at a new TV. The system then detects that you’re currently standing in front of this particular TV, taking note of its brand, screen size, and price. And within a couple of seconds, you get a push notification on your phone with additional information on the item and a promotional offer.Location-based advertising by numbers

iBeacon is an example of how such a location-based advertisement can be implemented. iBeacon employs sensors to communicate the messages you want to share with customers via smartphones, specifically a pre-installed app. This offers retailers limitless options to digitally connect with shoppers while they are physically in their store.

Another way to communicate with a phone is through apps, the primary goal of which is to get in-depth information about you as a potential buyer. You can make people install the app by promising coupons and special offers, but that incentive may turn sour if you start spamming your customers.

If you decide to try a location-based advertisement for your campaign, partner with Innovecs to develop mobile applications that connect you with your potential buyers more effectively.

How does this trend help ad tech companies?

Overall, developing an app for location-based ads and showing highly relevant promotions to customers creates a rewarding omnichannel experience that makes people loyal and satisfied with their purchases. Therefore, by and large, real-time interactions are a global trend that will hit the market in 2019 and beyond.

The Future of Digital Advertising - Ad Tech is Going to Be Changed

No matter the challenges in the ad tech industry, it has a great potential due to innovative technologies and advertising technology trends:

  • Artificial intelligence ensures smooth and natural communication with the audience through chatbots.
  • Augmented reality advertisement results in more interactive ads.
  • The internet of things makes you acquainted with your customers, which allows you to match the ad with the customer’s actual needs.
  • Location-based ads “catch” your customers and display relative ads in real time, which is convenient and increases the chances the product will be purchased.

So, why not implementing these technologies in your ad campaign? Since Innovecs provides a wide digital advertising technology stack, including the usage of Artificial Intelligence, AR, and IoT, you can outsource the development and maintenance of smart ad tech software solutions to our engineers. Rest assured you will get a full-fledged working product on time and budget.

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