One of the biggest ad tech trends of 2019 has been the shift to programmatic direct. As premium video inventory becomes available across CTV and OTT, buyers are embracing programmatic as a way to execute branding campaigns. We expect direct transactions will continue to grow as marketers navigate this fragmented landscape, vet premium publishers with meaningful distribution footprints, and invest directly to gain greater control over the content and delivery of their ad buys.
The convergence of TV and digital represents a monumental shift in the advertising ecosystem, with combined worldwide ad spend forecasted to exceed $587 billion in 2020, according to eMarketer. At the center of this convergence is the opportunity for advertisers to identify, target, and measure households across the full array of addressable channels, including linear, connected TV (CTV), digital, and social. But the premium TV and video ecosystems behave differently than traditional display, where programmatic buying originated.
To capitalize on the total video opportunity, both media sellers and buyers need to embrace new technologies and measurement strategies, while breaking down the silos that have historically separated TV investment from digital trading. Audiences already consume content this way, moving seamlessly from screen to screen; it’s important for agencies and brands to converge their data and operations to build a better consumer journey that aligns with this behavior.
In 2019, we saw advertisers and publishers tailor their solutions to data and privacy regulations. There is a growing need to help advertisers protect their data and better understand consumers’ choice to opt-in to personalized recommendations and more relevant ad experiences. For example, at Roku, we are actively working on solutions to help foster more advertiser adoption of OTT by going beyond the traditional 15 or 30 second ad to engage with consumers in new and immersive ways.
There was a lot of conversation about in-housing, which has resulted in fresh thinking about the positioning of agencies, where programmatic talent should sit and, ultimately, the pursuit of transparency. Brands have been controlling elements of media planning and buying in-house for years, but the desire to develop full programmatic capabilities in-house grew considerably in 2019.
The results have been varied. In some cases, it’s as simple as brands owning tech contracts but collaborating with agency teams to streamline planning. In other scenarios, brands have taken control of the planning and strategy, and then outsourced activation. It’s a positive trend in terms of broadening knowledge and promoting more open partnerships. Agencies will continue to add value in the form of expertise, as brands still require their knowledge, influence, and competence for campaign delivery.
According to Samsung Ads’ proprietary data, we’re at a tipping point where time spent watching streaming is catching up with linear TV – 45% to 55%. And although we do find a portion of viewers who only watch streaming (30%), or only linear (26%), the biggest group watches both (44%).
Even more interesting, this group of “Total TV Watchers” watches 50% more TV than any other group. The implications of these changing TV viewing behaviors are far-reaching as ad tech providers innovate solutions to embrace this new TV paradigm.
One of the biggest trends we’ve seen this year has been the widespread integration of data into campaign development and strategy. Technological advancements have equipped ad sales teams at advanced MVPDs and vMVPDs like DISH Media with the technical infrastructure to be more precise in how we target audiences. These efforts involve collaboration with top data partners to help brands and agencies better understand their audiences and be smarter about their ad buys. These days it’s all about reaching your audience wherever they are, and whenever and however they watch video.
The biggest ad tech trend of 2019 was connected TV (CTV) devices becoming the leading method of digital video viewing, especially for long-form content. CTV and over-the-top (OTT) services create an ecosystem for viewers to access all their favorite shows in one hub, with some original equipment manufacturers (OEMs), even creating an environment where consumers only need to buy a TV (no additional plugins) to tap into their favorite apps.
This one-stop shop for consuming premium OTT video is driving up engagement and viewing minutes, with a higher adoption of viewers connecting into this experience. It’s a significant moment for advertisers to target household users at a highly captivating moment. OTT engagement rates speak for themselves with video completion rate (VCR) at 95% or higher compared to a 70% VCR rate on desktop or mobile devices.
The biggest trend of 2019 lives at the very heart of the Internet: sustainability. The Internet has swiftly evolved as the most important communications channel for consumers globally, but regulation, consumer concerns around personal data usage, and brand misalignment with inflammatory and fake news threaten its long-term viability as a marketing platform. While there is still work to be done, 2019 has seen the industry start to come together to address these material issues – building consumer trust, and giving advertisers clarity and confidence in their digital investment.
I think it’s safe to say that OTT was the biggest ad tech trend of the year. Investment in OTT significantly increased as more and more advertisers are embracing its potential, from incremental reach to audience targeting and advanced insights. Today, OTT serves as a powerful medium and an ideal solution to reach the right consumers with sight, sound and motion.
At the same time, media owners have also been betting big on OTT by developing and/or acquiring direct to consumer apps in an effort to open another channel for viewers to consume their content. By doing this, publishers have the ability to enhance the distribution of content and connect with their consumers.
A significant increase in M&A activity, coming from both strategic acquirers as well as private equity, is continuing to step into the sector. Many ad tech companies have been “pivoting to video” for years already and now we are seeing “aging” display or mobile platforms “skipping” the video narrative and coming to market with “Connected TV/Over The Top TV” offerings that are not stable/accurate or scalable. The traditional “linear” TV market continues to face ratings declines and subscriber losses making CTV even more important to the future of entertainment.
Multi-channel contextual advertising was the biggest ad tech trend of 2019. Through the rise of artificial intelligence (AI) and machine learning, more brands are realizing the importance of personalizing ads to relevant target groups following a customer-first approach.
Ads can now be laser-focused and tailored in order to correctly detect the viewer’s searches, enhancing the user experience. With the rise of mobile, we also saw a surge in video ads over static ads.
Until recently, many Japanese consumers used DVD players to record linear TV shows at home. In the last few years, OTT streaming apps like TVer have been driving new behaviors so that consumers no longer need to record and can stream where and when they want.
This OTT ad inventory was originally sold direct (not programmatic) and controlled by a select group of agencies including Dentsu and Hakuhodo. But as of late 2018, TVer has partnered with the likes of CCI and SpotX to sell inventory programmatically and introduce broadcasters to PMPs for the first time.
2019 was the year that Programmatic Guaranteed went from being an emerging trend to a substantial transaction type across both video and display. As we move into 2020, I believe we’ll see more programmatic guaranteed campaigns because of the efficiency of automation with the personal assurances of traditional direct sales, eliminating the laborious emails, tags and invoices that have always plagued manual direct buys.
The biggest ad tech trend we saw in 2019 was businesses placing a greater emphasis on the need for first-party data powering their advertising and targeting strategies. With changing privacy and technology regulations impacting the use of third-party data, businesses began thinking about the sustainability of their data strategy with greater importance than ever before. Whether it’s privacy or performance, first-party data reigns as the champion; however, companies have had difficulty connecting martech and adtech solutions to make the most of their data and activate it seamlessly across environments. We anticipate the momentum of this trend continuing into 2020 and beyond as changes to policies continue to impact advertising as we have known it.
Consumption of digital video continues to rise across all devices and supply types. Leading the pack over the past year has been connected TVs, which now account for nearly half of broadcast VOD streams. CTV has the added value of tapping into co-viewing experiences where advertisers can achieve a 40-80% increase in audience at no additional cost. The growth of CTV reflects the fact that audiences still love to lean back and enjoy quality TV programming on the big screen. This demand isn’t going away—it’s just shifting into new times of viewership, and more varied sources of programming.
The biggest ad tech trend of 2019 has been creating a harmonious ecosystem that balances direct sales initiatives with programmatic endeavors. This brought awareness to competitive separation, challenges with latency, as well as managing saturation of an ad to the end user. It also sparked initiatives to address these shortcomings, which will be a primary focus in 2020.