Programmatic Trends for 2023

2023 is expected to be a significant and pivotal year for both the programmatic and advertising industry as they prepare for the potential end of third-party cookies. Google has indicated that they aim to phase out third-party cookies by the end of 2024, which will likely have a significant impact on the industry. Companies which rely on third-party cookies must be proactive in preparing for this change and consider alternative methods or options for tracking and targeting online advertising.

Programmatic Will Grow?

Despite the potential disruption caused by the end of third-party cookies, eMarketer is forecasting that programmatic spending in the US will continue to grow by 15% to reach $141 billion. This growth is expected to be driven by businesses and advertising agencies still exploring the benefits of using automated systems and workflow to purchase and sell advertising space. Additionally, the shift to digital advertising during the COVID-19 pandemic has demonstrated that companies can stretch their budgets further through programmatic advertising compared to traditional methods. As a result, programmatic will likely continue to be a popular choice for advertisers in the coming years.

Recession Coming? Or Already Here??

The threat of a recession is a reality that the advertising industry must face. As inflation continues to rise globally and the possibility of a recession in multiple markets becomes more likely, it is important for companies in the advertising industry to be aware of how this could impact their business.

One potential impact is that companies may need to increase their advertising budgets to keep up with rising costs and maintain their market share. This could lead to an overall increase in advertising spending as companies compete for customers. Programmatic advertising may be particularly attractive in this scenario, as it offers a flexible option for companies to adjust their ad spending based on changing market conditions.

At the same time, higher inflation can also reduce consumer purchasing power, which could lead to a decrease in demand for goods and services and potentially reduce the need for advertising. Similar to what we saw during the COVID-19 pandemic, programmatic advertising may be able to attract budgets that would have gone to more traditional advertising avenues. Companies must be proactive in adapting to these changes to stay competitive and successful in the industry.

My Top Predictions for Programmatic Advertising in 2023

What do we think the predictions for the Programmatic Advertising Trends for 2023 will be? This is how I see it from my perspective of the lens I work in as the President of Gourmet Ads, I am sure that others will have a different trend list. So, while I think areas like CTV, OTT, In-Game advertising and Audio are going to grow over the next few years they are not really something we are seeing or working on at this time.?

1.??More Programmatic run In-House by Brands?

It is expected that the trend of brands taking programmatic in-house will continue in 2023 and 2024. This shift has likely been driven by the realization that brands can leverage their own first-party data for more effective advertising, as well as the potential impact of privacy changes. While this trend may lead to more brands managing their Programmatic Advertising internally, it does not necessarily mean the demise of agency trading desks. Many brands will still choose to work with agencies and their trading desks to manage their programmatic advertising due to the technical expertise and resources available. The key is for brands to find the best approach for their specific needs and goals.

2. The Growth of Contextual?

As third-party cookies are phased out and privacy regulations continue to evolve, Contextual Targeting is expected to be a key focus for advertisers in 2023 and beyond. Without the use of cookies, advertisers will need to rely more on contextual signals to determine which ads to display to users. This means that matching ads to the content of a webpage or app will become even more important for reaching the right audience. What we know works is that chicken brands want to advertise within chicken recipes and diabetes brands want to be on and around diabetes content. That won't change anytime soon. It is our prediction that more companies will seek out contextual capabilities or partner with companies that offer strong contextual targeting solutions.

As a company, we have invested in over the last 2.5 years in developing our own contextual engine from the ground up to better serve our core verticals in food and health. Servicing our core verticals in Food and Health, our team has learned the types of targeting that scale and what doesn’t scale.?

3. Artificial Intelligence??

Artificial intelligence (AI) has become increasingly prevalent in the programmatic advertising industry in recent years, and this trend is expected to continue in 2023. One area where AI is likely to have a significant impact is in the creative design process, which is currently labor-intensive. By leveraging AI, advertisers may be able to create more personalized and effective ads more efficiently.

AI can also be used to analyze large amounts of data and identify patterns and trends that can be used to target ads more accurately. This can lead to higher engagement and conversion rates for advertisers, as the ads are more likely to be of interest to the user. In addition, AI can be used to optimize ad delivery in real-time, continuously adjusting the targeting and delivery of ads based on data such as user engagement and conversion rates to ensure that they are being shown to the most receptive audience. This can help to improve the overall performance of programmatic campaigns.

Our team are currently exploring the potential use of artificial intelligence in the creation and optimization of Contextual Targeting Segments. While our early experiments with this technology have been successful (in terms of scaling segments), we believe that we need to gather more performance data before we can confidently incorporate it into our product offering.?

Overall, it is expected that AI will continue to play a central role in the programmatic advertising ecosystem in 2023, driving improvements in ad targeting, creative design, and campaign performance.

4. Privacy and Data Protection

In 2023, privacy and data protection will continue to be a top priority in the programmatic industry, as companies seek to comply with stricter regulations and protect the privacy of their users. This will likely involve implementing more stringent consent and data management policies, as well as using more secure and transparent methods for collecting and using data.

One key area of focus will be the use of first-party data, which is data that is collected directly from users with their consent and is typically more secure and privacy-compliant than third-party data. Advertisers may increasingly turn to first-party data as an alternative to third-party cookies, which are being phased out by many browser and platform providers.

5. “Now Open” to Small & Medium Businesses

For the most part, Programmatic advertising has primarily been used by mid-sized, large, and global brands to date, as it allows for efficient media buying and activation. However, it is expected that small and medium-sized businesses will also start to adopt programmatic advertising in 2023 due to the increasing accessibility and affordability of the technology. We've certainly see small companies asking questions and requesting deals in Q4 2022.

Programmatic advertising can help small businesses drive results and ROI, as well as save time and resources through the automation of the ad-buying process.

2023 Will be Exciting?

Whatever actually happens, 2023 is going to be exciting. Just like it has for the last decade or so. Here at Gourmet Ads (and Healthy Ads), I am fortunate enough to work every day with some of the smartest and most talented people in the advertising industry. Not to mention our global partners at Xandr, the brands, and the many advertising agencies we work with around the world.

We all get to work in one of the most fast-paced, constantly involving industries in the world, and we should all feel lucky to do so. So yes, Programmatic is definitely going through a transformative period, but we will adapt, innovate and continue to thrive.