There is no question that Ad Tech is poised for unprecedented growth in the next two years. In 2020, global spending on digital advertising is expected to reach $336 billion, up from $229 billion in 2017, according to market research firm Statista. Growth at this pace will no doubt help drive, and be driven by, many new industry developments. At Ranker, we’ve identified four emerging trends that are poised to play a big role in reshaping ad tech beginning in 2018.
Publishers Will Start to Hire Dedicated Ad Tech Developers In-House
The publishing world is splitting into two distinct camps: those that are ahead of the curve in the development of programmatic advertising and yield optimization—and those that are not.
Smart publishers are already investing in in-house ad tech developers, and in 2018, we expect more publishers will dedicate in-house resources to manage their ad tech initiatives. Those who do will discover, happily, how this decision takes efficiency to new heights.
In the past, publishers large and small were wary of taking on the expense of hiring dedicated ad tech developers. Rather, they leaned heavily on internal developers, most of whom had no real experience with ad tech. Today, however, publishers are realizing that good ad tech developers are worth much more than their salary and will only become more valuable as ad technology rapidly advances.
Currently, most ad tech engineers are on the sell side and are relatively hard to recruit. But, as we progress into 2018, experienced ad tech developers will become more plentiful and will likely show an increased willingness to move from the sell side to the publisher side.
Third-Party Vendors That Focus on Header-Bidding Analytics Will Be All the Rage
Header bidding has yielded many positives for publishers. It enables them to squeeze more revenue from their ad inventory and has brought more transparency to the auction process by enabling publishers to see who’s bidding, when they’re bidding, how much they’re bidding and what their win rate is, among other things.
In 2018, expect to see more benefits of header bidding as publishers begin to tap into the power of a huge amount of data they’d previously ignored.
In the coming year, more third-party analytics vendors will start popping up with capabilities to provide a holistic view of what is happening across the entire open auction inventory and shine a light on key insights. This will enable publishers to make better decisions, improve forecasting and truly optimize their yield.
Machine Learning Combined With Publisher-Side Yield Optimization Will Continue to Grow
Machine learning is one of the hottest technologies these days, and every industry is trying to find an application for it. While there may be some questionable use cases for machine learning, the digital ad industry is actually a great fit.
For example, look at price floors. Machine learning has the ability to look at bid data across an infinite number of platforms and systems, and quickly and accurately determine price floors.
In 2018, machine learning will start to power dynamic flooring. Publishers will have better insight into the value of an impression based on day of the month, the day of the week and even hour of the day. The ability to truly understand how much their inventory is worth and set price floors in real time offers incredible value to publishers, and because of this, we expect to see a major uptick in the use of machine learning in the ad tech space.
Ad Fraud Will Continue to Be a Problem
Scammers are selling ad space on websites they don’t have access to, and on fake versions of authentic sites. The problem is real and it’s serious. In fact, ad fraud costs companies a staggering $16.4 billion in 2017, according to ad verification company Adloox.
Online ad fraud will continue to threaten the industry in 2018, and even the largest platforms will likely fall victim. However, the situation is not all gloom and doom.
Initiatives like ads.txt, which is led by the Interactive Advertising Bureau Tech Lab, is working to help to identify approved ad sellers and ensure that companies don’t buy fraudulent ad space. To date, ads.txt has already helped cut down on fraud, and the next frontier is domain authorization at the impression level.
Right now, ads.txt can tell you whether a particular domain is authorized to sell a publisher’s inventory. But, at the impression level, that same real-time authorization does not yet exist. This could change in 2018, as the industry starts cracking down on domain spoofing and gains more control over how and where inventory is sold.
While there are undoubtedly other trends that will emerge in the coming year, these four trends are certainly shaping up to impact the ad tech space in a big way. With the industry’s rapid pace of growth, one overall fact is clear: the ad tech market will continue to evolve rapidly and reshape the way publishers do business in new and exciting ways.