Digital advertising has undergone quite the transformation over the past decade. Looking back to the era before programmatic, digital ad buying was done manually, through direct deals, naturally limiting the scope and reach of campaigns. Advertising campaigns included a healthy mix of TV, radio, newspapers and internet.
Fast forwarding to 2018, according to Magna research, digital advertising is expected to account for 50% of total ad spend this year, having surpassed TV advertising in 2017.
Clearly, digital advertising is on a growth streak, keeping up with the pace of technology. And while we are in the midst of a massive growth period, we need to foresee the imminent maturity of digital advertising and expect that pace to slow down.
When examining the industry forces that are bound to influence the future growth-rate of digital advertising in either direction, we can identify forces pushing in both directions.
Changes facilitating growth
The potential of Connected TV is slowly coming to fruition as we see an increase in interest from brands and advertisers. New innovation in CTV and measurement tools hold the promise of creating a scalable monetization channel that will attract significant percentages of advertising dollars.
In a quote provided by Zenith to AdExchanger, Jonathan Bernard, Head of Forecasting stated that “ad tech’s rapid growth has forced more advertiser budgets into the hands of vendors rather than toward buying actual media”. However, as new technologies and standards are introduced to improve the efficiency of programmatic transactioning, those budgets will be freed to shift to actual media.
A third growth facilitator can be anticipated from technology innovations, as new advertising formats and technologies become available to advertisers and publishers. Looking back, we can see how outstream units have exponentially increased supply to accommodate the growing demand. Who knows what we’ll see next.
And yet, there are also growth inhibitors that point to a sustained growth in digital advertising. With adblocking technologies, as well as wider spanning initiatives such as Google adblocker taking their toll on monetization. As result, more publishers might turn to subscription based content to balance out and secure their yield, leaving less opportunity for ad based monetization.
The rapidly changing landscape of the adtech industry, leaves many question marks when attempting to map out the future. However when looking back ten years, we can clearly see a digital takeover. The only question that remains is when will all growth opportunities be exhausted.