Bee-bee-boop-beep. Technology is taking over! Well, kind of. As early as 2022, 35% of companies were using artificial intelligence in their operations, while 42% were exploring its potential. At the advent of the Industrial Revolution, we had Luddites opposing the use of new technology to produce textiles. In the future of advertising, will there be advertisers protesting the use of AI and other advanced technologies? We hope not! There will always be room for advertisers, just like how the hammer didn’t make the carpenter obsolete. But what exactly does the future of advertising look like? Keep reading to learn more about this very exciting topic.
Dialing Back from the Future of Advertising: What’s Happening in the Industry Right Now?
Before we walk you through the doors of futuristic advertising, let’s first talk about what’s happening in the industry today. After all, everything that the future of advertising holds is strongly linked to the present. And as it turns out, the future is now! The future of advertising came about when businesses started spending the majority of their marketing budgets on online campaigns. In the United States, this happened in 2018.
Technological Innovations in the Present and Future of Advertising
As we have mentioned in the previous section, we’re already in the future of advertising! It’s just a little hard to see right now because this future is still in its infancy. However, the technologies already exist — and two of which are predicted to make the biggest impact on the future of advertising. It’s just a matter of seeing them evolve into the advertising of the future.
Role of AI and Machine Learning
There’s always a fear of being replaced by AI. In marketing, this may have some basis because the market value of AI in marketing is currently pegged at 27.37 billion USD! If you define the future of advertising by the presence of AI, then we’re already here! Today, you can use AI to:
- Create market segments based on data;
- Gather, sort and analyze huge amounts of data very quickly;
- Optimize ad spending;
- Split test ads;
- Identify trends.
The future of advertising will see artificial intelligence taking on more advertising tasks, thus changing the role of advertisers in marketing. The impact of AI in driving efficiency is expected to be so great that by 2030, the world’s cumulative GDP will be 16% higher.
Advancements in AR/VR and Interactive Ads
The interactive nature of technology is something we first saw with commercial gaming, and we’re confident we’ll see more of it in the future of advertising. Remember how Pokémon Go took the world by storm? The relevance of AR/VR goes beyond this trend, with the AR/VR market expected to grow by 12.6% every year until 2028. Because of the engagement that similar technologies generate, we strongly believe that they will also find their place in the future of advertising. See how these technological advancements can change the face of advertising for good.
Augmented Reality and Virtual Reality
The internet has blurred the lines between virtual and reality. But in the future of advertising, these lines may be erased altogether. To make marketing hip and appealing to the younger generations, augmented reality and virtual reality will be used heavily in the ad tech sector. The future of advertising will see marketers trying to outdo each other by incorporating AR/VR into their campaigns. Direct response once reigned supreme, but it may take a backseat as advertisers focus on building brand awareness and meaningful connections with the audience.
Interactive Ads
What does the future of online advertising hold? It’s definitely more engagement-focused. As we mentioned, the competition will only get tougher as more businesses move from traditional methods to online advertisements. So, in the future of advertising, interactive ads will be used even more, surpassing the projected global advertising revenue from VR of around $166.7 million for this year.
You’ll encounter similar interactive formats in the future of advertising to allow for a deeper level of interaction on your part. Even if the formats do not necessarily involve AR/VR, the user will be able to interact with the ad in some way.
Personalization and Targeted Advertising: What Does the Future of Advertising Hold?
For a long time, advertisers relied on cookies to create personalized advertising. These cookies follow users’ activity all around the web, thus allowing advertisers to create ads based on the information gathered. Will the future of advertising still work the same way? Based on the direction that the industry is going, this is very unlikely. However, this doesn’t mean that there will be no personalization in the future of advertising. The approach will simply be different from the current conventions.
The Renaissance of Contextual Targeting
Right now, advertisers and marketers tend to use audience-based targeting. This means that the characteristics of the audience are used as the basis for creating the ads. But in the future of advertising, contextual targeting will be revived. Instead of using information about the audience, it uses web pages. The beauty of this mode of targeting is that it’s immune to issues surrounding privacy concerns. Given the direction in which the future of advertising is moving, contextual targeting may even become the default mode of targeting.
MGID’s Contextual Intelligence Solution
Regardless of the direction that the advertising industry is heading, it never hurts to use more than one targeting method. To prepare for whatever the future of advertising may hold, our Contextual Intelligence solution is the perfect tool to help you integrate this form of targeting into your campaigns. This solution uses machine learning and AI algorithms to quickly index all topics on a publisher’s page. This means advertisers enjoy potentially wider ad placement and coverage while publishers earn more from renting ad spaces.
Therefore, if the future of advertising truly means a heavier reliance on contextual targeting, then this is good news for everyone!
Ethical Considerations and Privacy Concerns
Let’s face it: in the future of digital advertising, users hope that cookies will be a thing of the past. The European Union clearly agrees with this; that’s why they have set out strict cookie use guidelines in the GDPR. Only those required for communication and the provision of online services are permitted. Given the global influence of the European Union, many countries are expected to follow suit, so the future of advertising will be less invasive. After all, laws eventually catch up to unfair practices. But some ad formats, such as native ads, are inherently more ethical because they don’t rely on invasive practices to deliver a personalized experience.
Importance of Data-Driven Marketing
Right now, data-driven marketing is at the heart of creating personalized campaigns because advertisers have realized the potential of these strategies. After all, no level of personalization or targeting will be possible if you are just shooting in the dark. In the future of advertising, what does data-driven marketing entail?
- Using data straight from the users to make marketing decisions
- Looking at the results of past campaigns
- Being able to support your decisions using data
Data-driven marketing is going to be just as important in the future of advertising because companies are always looking for ways to boost their returns. But beyond the monetary terms, there are more reasons for you to value data-driven marketing as we head towards the future of advertising.
Competition Is Tougher Than Ever
Online marketing has already become mainstream in advertising. The competition has never been tougher, and with people being glued to their mobile phones, the future of advertising will get to the point of oversaturation. In 2022, mobile marketing made up 64% of worldwide advertising spending. This means that only the best and most engaging ads stand a chance of getting returns on their investment. With the future of advertising, your best bet in beating the competition will be to do your research and make data-based decisions. Your ability to gather reliable data and generate insights will be invaluable.
Regulations Are Changing
Data-driven marketing is going to be more important than ever because, in the future of advertising, you won’t be able to rely on cookies to do the dirty work for you. This means that you will have to get creative about how you gather your data. As we have mentioned, countries other than those in the EU are likely to follow suit in restricting the use of cookies on sites. In the future of advertising, having data allows you to quickly recover from any changes introduced. Just make sure to adopt a customer data strategy that’s flexible enough to respond to shifting and restricting regulations.
Advertising Requires Constant Growth and Monitoring
We discourage advertisers from thinking about the future of advertising as a distant time that they’ll eventually get to. This thinking prevents them from getting ahead of the times, discovering trends and uncovering possibilities before the competition does. With data-driven marketing, you’re always living in the future of advertising! By using data, you’ll be able to create and implement strategies that are tailor-made for your ever-changing customer base.
Mobile’s Disruptive Force in Advertising: Will the Future of Mobile Advertising Have a Greater Impact?
It can be hard to imagine a day without using your phone. That’s unless you’re taking a no-wifi yoga retreat in the middle of nowhere! During the second quarter of 2023, people spent 57% of their time browsing the web on their phones. This number is expected to grow further, with even more people gaining access to smartphone devices. In the future of advertising, mobile won’t just be a disruptive force; it will be an unstoppable one! Therefore, any advertiser worth its salt should not ignore the power and potential of mobile traffic to generate impressive returns.
Trends in Mobile Ad Formats and Engagement
If we haven’t made it clear, the future of advertising is mobile. Right now, these elements seem to be generating the most engagement from users.
- Short videos: Reported by 66% of consumers to be the most engaging type of content, short-form videos are going to be more prevalent as we step towards the future of advertising.
- Gamification: Allowing users to play and participate is a great way to make the ad experience more enjoyable. This is why the gamification market grew by 25.3% in just a year.
- Live streaming: Live streaming lets businesses interact with their audiences in real time. The future of advertising is likely to see live streaming becoming more popular.
Mobile-First Strategies for Advertisers
Mobile-first advertising recognizes the mobile phone as the primary device that users use to access the internet. Therefore, we can expect the future of advertising to be optimized for mobile devices. Advertisers can help make this a reality by:
- Creating their campaigns on mobile before desktop;
- Integrating advertising with social media;
- Making sure that the ad can be viewed properly on mobile;
- Simplifying the buyer’s journey.
The future of advertising relies on both mobile and desktop devices to drive users to a sale. After all, even though conversion for desktop is higher, it’s the exposure on mobile that makes it possible.
Programmatic Advertising and Automation: Is Programmatic Advertising the Future of Marketing?
Programmatic advertising is advertising that follows a certain program or method based on important metrics like ad spend, reach and impressions. Technology is used to complete the transaction. However, this does more than just automate purchases. A perfect fit for the future of advertising, this entails using big data to automate various processes that allow businesses to make smart decisions about ad placement. With the help of tech, this entire process happens instantly! The future of advertising will definitely see more programmatic advertising as global spending here is projected to exceed $700 billion by 2026, three quarters of which will be spent targeting smartphone and CTV users.
Benefits and Challenges of Automated Ad Platforms
As everyone participating in the future of advertising is expected to make use of programmatic advertising, let’s look at its pros and cons:
| Benefits | Challenges |
|---|---|
| Higher efficiency: Buying and selling is done quickly, thus maximizing ad exposure. | Little human control: Everything is done too quickly, so you may not be able to control where the ad appears. |
| Better returns: The future of advertising through programmatic ads is designed for optimized results. | Needs tech know-now: Programmatic buying may be difficult to successfully implement if you’re not tech-savvy. |
| Data-backed: The decisions the algorithm makes are based on data. | Ad fraud: Automated systems are susceptible to ad fraud, where malicious actors generate fake clicks or impressions |
FAQs on the Future of Advertising
Are there ethical considerations in the use of advanced advertising technologies?
The use of technology itself isn’t a bad thing. Besides, many advancements have been used to create great user experience. The issue arises when the technologies are used to exploit users in any way.
How is technology shaping the future of advertising?
Technology dictates new possibilities for advertisers. The introduction of new and appealing tools, like interactive ads and AR/VR, has been great in getting and keeping the user’s attention. In the future of advertising, more advertisers will follow the trend of using engaging technology for their campaigns, making them the norm.
What role does artificial intelligence play in the future of advertising?
Artificial intelligence is predicted to impact various dimensions of marketing and advertising. It will be able to help with:
- Increasing efficiency: In the future of advertising, AI will do more than just automate tasks. It will also be able to make campaign decisions based on existing data.
- Improving customer engagement: AI can also be used in client-facing parts of advertising, such as chatbots.
- Giving you an edge against competitors: Advertisers who maximize AI can create campaigns more quickly and earn more from their efforts.
Are traditional advertising methods still relevant in the future of advertising?
Yes. Traditional advertising modes will always be relevant because:
- Not everyone is receptive to digital marketing: In fact, research from Insider showed that the trust in social media ad declined in 2022.
- Users crave connection: People want to feel connected to other people. And even though the internet has made this easy, users still prioritize the quality and “realness” of connections. In the future of advertising, nothing’s more tangible than traditional ads!
- You can use it to stand out: Because most advertising now exists online, going traditional can help you break through the clutter.
What does the future of advertising agencies look like?
Businesses that were once able to obtain some level of success without professional advertisers may now need expert agencies to help them navigate the changes. Therefore, the future of advertising may involve a lot of thriving ad agencies lending their expertise to businesses of all sizes.
How can businesses adapt to the changing trends in consumer behavior?
The first step will be to actually find out what those trends are. Beyond following a trend, it’s also important to:
- Conduct research: Gather information about your audience through competitor analysis, surveys, interviews or other methods that you feel will work, given the restrictions in the future of advertising.
- Ask and listen to feedback: Gain a better understanding of changing preferences based on what users think about your product or service.
- Always communicate: Use various media to develop a deeper relationship with your audience so that they become more open with you.
By doing all these, you will always be in the know. You will be able to create campaigns relevant to your audience now.
What are the key challenges advertisers might face in the future of online advertising?
If left unchecked, many of the challenges faced today may only get worse in the future, such as:
- Ad spend leakage: Fraudulent clicks, views and engagement may cause advertisers to lose money.
- Ad blindness: This is a persistent problem that exists beyond the future of advertising, where 86% of users instinctively ignore ads.
- More costs: The greater competition means that advertising will become more expensive, which can mean more spending.
How can individuals and businesses stay informed about the latest developments in the future of advertising?
If you want to stay updated with the world of online advertising, head over to the blog section of MGID. There, different members of our team share valuable insights about various interests surrounding industry trends.
Conclusion: Strategize and Adapt to Survive the Future of Advertising
With so many changes happening in the advertising industry, you need to be prepared. Privacy-related regulations will continue to pop up, which vastly increase the relevance of privacy-oriented contextual advertising. At the forefront of championing user protections in the future of advertising, MGID provides innovative ad formats that respect user privacy while also driving promising returns. Explore our Ad Gallery to see how they’re shaping the future of advertising. And when you’re ready to make your advertising efforts future-proof, create an account on MGID. Our advanced tools, personal managers and experienced creative experts are all here to set you up for success.
