What Digital Advertising Will Look Like in 2020

Advertising is undergoing its biggest revolution since digital ads were introduced in the 1990s — and it’s all thanks to data. Here’s how 900 of the world’s leading advertisers are preparing for a brave new world.

In 2018, consumers are receiving more messages than ever, from a multitude of channels. And with the use of wearable devices, digital personal assistants and virtual reality becoming more commonplace, the advertising market is only going to get more crowded.

Data and web analytics are giving businesses the opportunity to cut through the noise by showing them ways they can optimise their ad campaigns. Often, this means hyper-personalisation: going beyond the inclusion of the consumer’s name or industry in their messages, and using all the available data to ensure that individuals receive the right message, at the right time, through the right channels.

This is no small feat. In order to be successful in this new era of advertising, businesses will likely have to restructure their marketing and advertising teams, budgets and strategies.

Our Digital Advertising 2020 report reveals how 900 of the world’s leading advertisers are preparing for this brave new world. Here are the top 5 takeaways.

1. Collaboration is key

Once siloed from the rest of the organisation, digital advertising teams around the globe are now integrating with marketing teams, and in Australia and New Zealand this trend also holds true. Technology is the catalyst for this evolution as it enables marketing teams to gain control of their data, which helps to facilitate team collaboration — all in the name of a better customer experience.

The desire among teams to regain control of their digital advertising and their data is driving independence, with 59% of the companies relying entirely on internal staff to optimise ad spend on Facebook and Instagram.

2. Big data is the holy grail for targeted advertising

In the era of big data, the insights we are able to capture about the consumer and their behaviour is growing exponentially. Demographics as we know them are fading away, replaced by the use of data to build deep knowledge of consumer behaviours, interests and engagement in real time.

In terms of data sources, marketers and advertisers still largely rely on first-party anonymous data, such as online browsing patterns, with 71% of all respondents using or planning to use first-party data for their campaigns. However, over the next 2 years, use of this data is expected to decline by 9% in the Asia-Pacific region.

Instead, global use of second- and third-party data is set to increase by a staggering 26% and 30% respectively — where second-party data is, essentially, another organisation’s first-party data, and third-party data is obtained from sources outside the selling or purchasing companies.  

Marketers are also increasing their focus on data quality and having more control over who they’re marketing to.

3. Facebook and Google remain kings of digital advertising as video ads gain popularity

Thanks to their ability to reach massive audiences and target consumers based on their identities, the Facebook and Google duopoly is here to stay, and represents 67% of total spend for advertisers in the Asia-Pacific Region.

The industry focus, in terms of ad format, is shifting to video, as advertisers prefer to aim at strategic brand-building over tactical direct response.

But there are additional reasons for the rise of video. First and foremost, the ability to tell stories better than any other format, but also the possibility, for primary video sites, including Facebook and YouTube, to enable advertisers to measure and optimise content performance in detail.

This is reflected in our research – 58% of advertising teams in the Asia-Pacific increased their digital video ad spend between 2% and 24% in the past year.

4. New metrics leading the way for greater success

Advertising teams are increasingly prioritising long-term quality relationships with customers, with 27% of advertisers citing lifetime value of a customer as their top success metric.

In search of more insights to inform their strategies, advertisers are becoming more sophisticated – more teams are now using DMPs and web analytics than spreadsheets.

Kellogg’s, for example, tapped into Salesforce DMP’s Cross-Channel Frequency Management to boost the efficiency of its marketing efforts by eliminating wasted impressions in both video and digital display ads. The result? In the first year, Kellogg’s saved more than $20 million in wasted video and display advertising spend, boosting ROMI to more than 25x.

5. New tech means new ways to connect with customers

The future is opening up brand new scenarios and opportunities for advertisers. New technology already in our homes, such as smart TVs, voice-activated digital assistants and wearable devices are creating new touchpoints with customers that translate into new platforms of engagement with them.

These are not being ignored by leading marketers – globally, in 2018, 74% of advertisers are using or planning to use voice-activated digital assistants powered by artificial intelligence to advertise.

As newer technology such as augmented and virtual reality becomes common in the household, this is not only going to further increase the available ad space, but most importantly will increase the intriguing opportunities for advertisers to capture their audiences’ attention, wherever they are.

For more insights into important strategies and tactics you could be using in the lead up to 2020, check out the full Digital Advertising 2020 report.