This article originally appeared in StreetFight
By: Frost Prioleau, CEO of Simpli.fi
2019 has come to a close, and it featured key developments for programmatic advertising. From the rapid growth in over-the-top (OTT) and connected TV to significant improvements in addressable advertising to the current implementation of the California Consumer Privacy Act, 2019 saw momentous developments in the programmatic space that will change industry standards this year.
In fact, eMarketer recently estimated that U.S. advertisers spent nearly $60 billion on programmatic display in 2019, and over the next two years, continued investment in areas like connected TV and OTT will drive programmatic ad spending to $80 billion.
As the ad industry launches into 2020, the ever-evolving programmatic landscape will introduce a fresh set of opportunities and challenges that will shape strategy in the new year. Here’s what to expect.
Programmatic Delivers Scale to CTV World
2019 was, without a doubt, the year for content streaming, as Disney+ and Apple TV+ successfully entered the market, and other ad-supported platforms like Pluto TV experienced exponential growth around the world.
This rising OTT/CTV space introduces a major opportunity for advertisers as well as some major challenges. As the number of advertising-supported video-on demand (AVOD) providers continues to expand, advertisers are faced with significant fragmentation, which makes it difficult to manage reach and frequency across all providers. In the coming year, programmatic platforms will play an increasingly vital role in aggregating inventory across the wide range of programs and devices to help advertisers scale their CTV strategies through behavioral, addressable, and other “digital-style” targeting.
TV Shifts to Advanced Attribution Metrics
For years and years, traditional television advertisers have relied on measuring ads through Gross Rating Points (GRPs), while their digital advertising counterparts have grown accustomed to counting impressions and measuring effectiveness using performance-based metrics such as website actions, foot traffic lift, and purchase conversions. With the rise of advanced television, the lines between traditional and digital blur, and thus advertisers will look to new ways of measuring TV ad effectiveness in 2020.
Because advertisers accustomed to digital performance metrics will likely not revert to demographic-based GRPs, digital and performance-based metrics will rise victorious in this battle of traditional versus new. In fact, local TV stations have already begun moving away from GRPs by selling ads based on impressions delivered—something the Television Bureau of Advertising (TVB) pushed heavily in 2019. The industry will continue to see digital-inspired changes, and attribution and performance-based metrics will not be far behind.
GDPR, CCPA, and The Future of Data Privacy
Predictions about changes within the programmatic landscape go hand in hand with another oft-discussed topic in the industry: privacy regulation. When the General Data Protection Regulation (GDPR) went into effect in the EU about a year and a half ago, many applications and websites were not ready to collect and pass on consent at launch. As a result, the industry saw declines in the supply of data traditionally used for digital advertising and sent the industry into a frenzy.
We expect a different scenario with the CCPA, which went into effect Jan 1. This go-around, publishers and app developers are much better prepared to implement data privacy safeguards to comply with CCPA than they were with GDPR, and the regulation should be implemented with little disruption for the ad industry. And while the new year will undoubtedly introduce additional privacy initiatives, mostly at the state level, it is unlikely that any federal legislation related to protecting privacy will pass until after the 2020 election.
This past year introduced significant changes and growth within the programmatic advertising space, and, considering eMarketer’s ad spend predictions, the industry looks to be heading into another big year in 2020. The smartest advertisers will take advantage of these changes and adjust strategy accordingly to uncover the true value of programmatic, whether on OTT/CTV or across the ever-growing number of digital channels.