03rd January, 2018
Hailed by advertisers worldwide for its potential to streamline the process of ad buying, programmatic technology has firmly positioned itself at the forefront of automated decision making for advertisers. The technology now looks set to continue dominating the digital advertising sector, with it predicted to account for 100% of advertising trading execution by 2020.
Advertisers are increasingly utilising programmatic technology to improve the efficiency of their ad spend and tackle long-standing industry issues, such as fraud and a lack of spend transparency. Yet, as new technologies continue to become increasingly innovative, the rate of progression of programmatic technology is beginning to show some signs of slowing across the sector. As with any established technology, this is a likely sign of increasing consolidation, as it continues to prove its value throughout the industry. However, it also raises questions over how the technology will continue to evolve and overcome any new hurdles which are set to appear in 2018.
Programmatic in a post-GDPR ecosystem
Emerging technologies such as Artificial Intelligence (AI) and Machine Learning have been quickly established as key drivers of intelligent advertising throughout 2017. This machine-led technology is currently being used extensively across programmatic advertising to enable companies to collect smart data on consumers and ensure better ad targeting.
However, the European Union’s forthcoming General Data Protection Regulation (GDPR) could somewhat restrict AI’s role within digital advertising in the future. The new legislation is set to transform the way programmatic advertisers both collect and process the personal data of consumers. Once fully implemented in May 2018, programmatic providers must increase their transparency by obtaining full consent to use consumer data. Meanwhile, consumers will also have the power to remove historical data from any given database.
With consumer data more essential than ever for intelligent ad targeting, these upcoming changes to the way that data is regulated could in fact disrupt programmatic’s ability to offer advertisers an effective ad buying process. This could be achieved by reversing much of the progress made towards personalised advertising, which has been driven by AI in recent years.
In my view, programmatic advertising technology will face new challenges when trying to provide the current level of automation, security and transparency that is required for successful advertising. With GDPR promising new challenges when handling consumer information, providers will have to adapt their approach to AI to continue delivering efficient and secure advertising, whilst remaining compliant. It is therefore now vital that programmatic providers fully recognise the potential of other new technologies in 2018, which accommodate the values of GDPR, while improving advertising efficiency.
Advancing programmatic with blockchain
One such technology that I predict will have a huge impact on programmatic advertising in 2018 is blockchain technology. Since its emergence a few years ago, blockchain has become a huge talking point across many industries worldwide, given its ability to increase the security of transactions. The technology has also rapidly increased its presence across the ad tech sector of late and can provide clear benefits for advertisers leveraging programmatic.
By providing advertisers with a permanent and irrevocable receipt of all transactions which occur automatically within the programmatic marketplace, blockchain can significantly reduce the risk of ad fraud, an issue which continues to hugely disrupt the industry. It also has the potential to increase transparency in ad spend, by enabling advertisers to see exactly where their budget is being spent and with whom, eliminating the risk of hidden costs.
Should blockchain become widely integrated into programmatic advertising in 2018, providers will be able to drive security and increase trust and confidence amongst buyers and sellers. As more come to realise its benefits, I believe we will witness a rise in the presence of blockchain across automated ad buying processes in the next 12 months.
As digital advertising becomes ever-more reliant on automation and personalisation, programmatic advertisers must now welcome the capabilities of emerging technologies such as blockchain, to continue to innovate over the coming months. Yet, with fraud and transparency still causing industry wide concerns and with GDPR creating new challenges, the programmatic advertising ecosystem will be forced to adapt in order to continue its own progression and maintain its ability to facilitate well-targeted advertising in 2018.
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