Sneak Peek at 2017
What will the digital advertising map look like this year? In honor of the New Year, the co-founder & CEO of Intango, Yefi Gureni, shares his insights about what we should anticipate in the global digital advertising industry.
Digital advertising is no doubt the fastest growing segment of global advertising.
According to recent outlooks – during 2017, digital ad spending will grow by more than 17%, reaching nearly $160 billion. More than 30% of companies are planning to spend approximately 75% of their advertising expenditures on digital marketing over the next five years.
“…The collaboration between advertisers and traffic sources
to prevent ad fraud, is going to be a big thing to watch for.”
As we stand at the outset of a new year, we’ve held a unique Q&A session with Intango’s co-founder and CEO, Yefi Gureni, to explore what he sees in the future of what has become an increasingly complex market.
Q: What trends should we expect to see this year?
“One of the hottest topics around is Digital video advertising, and it’s about to reach its boiling point. As video is a highly engaging format, online video ad spend is expected to grow by over 30% this year. According to recent forecasts, over 80% of internet traffic will be video by 2020.”
“But the video advertising landscape isn’t simply expanding, it’s also advancing and evolving. Technological developments, new formats and emerging platforms are continually adjusting their direction.”
Q: Such as…?
“Mobile video, for instance, is one of the fastest-growing ad formats. Today, almost a quarter of the digital ad budget is already allocated to it, but I believe that its potential is only just beginning to be explored.”
“Google has just introduced native video ads for mobile publishers, which makes mobile formats faster and more effective. In 2017, further technological advances will allow mobile video advertising to become more engaging and creative.”
“I estimate that shortly we’ll see advertisers focusing on building native, shareable experiences, and mobile video advertising will become increasingly affordable, making it more attractive to smaller businesses.”
Q: So, it reinforces the assumption that mobile will dominate.
“Recently publicized forecasts indicate that mobile advertising is expected to show faster growth than other types of Internet advertising.”
“According to projections, through 2020, the total global revenue from mobile Internet advertising will expand at a CAGR of approximately 20%.”
“Nevertheless, despite this rapid growth, mobile is not likely to dominate the market. In fact, by 2020, mobile’s share is expected to be just under a third (32.6%) of total Internet advertising.”
Q: This is quite a surprise. Why is that?
“I believe that part of what’s holding back mobile from reaching its full potential is the fact that we don’t have great ways to measure the success of mobile ads, or understand how users experience them.”
“While we will be seeing changes and improvements, we still need to continue to explore better means of tracking how customers consume and respond to mobile advertising.”
Q: Which technologies are expected to affect industry trends and how?
“The growing adoption of ad blocking technologies is a concern.”
“According to Adobe, 28% of U.S. Internet users use adblocking software. This trend will create backlash in three main area. First, the big networks, such as Google and Facebook, will continue to pressure mobile operators not to block ads. Second, the popularity of native advertising, which is meant to bypass ad blockers, is expected to continue to grow. And third, we will see a new breed of anti-ad-blockers, or technology companies hoping to cash in on the ad-blocking situation, by selling software designed to counteract the effects of ad-blocking.”
“Programmatic buying is also likely to have a big impact on the industry, but in a very different way. It’s increasingly viewed as a way of doing business that utilizes data and technology to trade digital ad inventory with maximal effectiveness. In 2016, approximately 70% of all display ads were purchased programmatically, totaling $22 billion USD, and marketers in the U.S. cite mobile as having the most opportunity for programmatic buying.”
Q: How, in your opinion, will the industry deal with the phenomenon of growing fraud?
“Click fraud is the top concern among brand marketers and media buyers, and is sure to affect the industry’s trends. The collaboration between advertisers and traffic sources to prevent ad fraud, is going to be a big thing to watch for.”
“By pinpointing specific impressions, categorizing the problem, and providing actionable data in real time, mediators can work together with to clean up traffic, instead of just blocking it. This way, they can become part of the solution instead of being labeled as the problem.”
“I believe that in a short time, the worlds of cyber-security and anti-ad fraud will merge, and start using many of the same techniques to detect cyberattacks from ad bots that create fake clicks and views.”
Q: In which global markets can we anticipate seeing some interesting developments?
“The growth in our industry is not expected to be even. Some regions will experience a downturn, while other areas will display unbelievable growth.”
“For example, by 2020, US advertising revenue is expected to continue to grow, but it is also projected to lose some of its market share to competition from the Asian Pacific market. Also, while emerging regions like Africa, Latin America and the Middle East are projected to show the highest growth rates, they are still likely to generate less revenue than more mature markets.”
Q: Lastly, what advice can you give online marketers seeking opportunities?
“In today’s complex digital landscape, it’s all about identifying areas of growth – be it geographical opportunities, or sectors within the industry, or both.”
“Bottom line: By 2020, global digital revenue is expected to have virtually caught up with non-digital revenue, with about 1 trillion USD each. And the industry, facing massive disruption, is going to experience a period of massive opportunities. Drastic slowdowns in some regions will coexist with tremendous expansion in other countries and industry segments.”
“What we’re looking at is actually an increasingly competitive global marketplace with pockets of growth. Industry leaders who want to maintain their success, are going to have to apply intimate local understanding in order to drive growth.”