Programmatic advertising refers to the algorithmic buying and selling of digital advertising space in real-time. Instead of inserting ads manually, programmatic advertising relies on software and data to determine ad placements across websites, apps, and more.

In recent years, programmatic advertising has exploded in popularity. Advertisers spent over $100 billion on programmatic ads in 2021 alone. By 2024, programmatic is projected to account for nearly 90% of total digital display ad spending worldwide.

The programmatic advertising landscape is constantly shifting and will likely look quite different in 2024 compared to today. Some of the biggest changes on the horizon involve new advertising formats like connected TV (CTV) and digital audio taking off, while third-party data usage declines due to privacy regulations. Advertisers will also rely more on artificial intelligence and machine learning to optimize campaigns. Video and mobile advertising will continue to dominate.

Overall, programmatic advertising is poised for tremendous innovation and growth in 2024. This blog will explore the most important programmatic ad trends to watch as we head toward 2024 and beyond. Advertisers can harness these developments with the right strategies to drive better campaign performance and customer experiences.

Spending Growth

Programmatic advertising spend is projected to grow substantially in 2024. Spending on programmatic ads reached $224 billion in 2022, an increase of 24% from 2021. By 2024, programmatic ad spend is forecast to reach $354 billion globally, representing an increase of 58% from 2022.

Several factors are fueling this rapid growth in programmatic ad spending:

• Increased use of digital media and mobile devices provides more inventory and data to target ads programmatically

• Advancements in programmatic technology like machine learning and AI allow more efficient and effective ad targeting

• Transition of linear TV advertising budgets into connected TV and online video ads purchased programmatically

• Growth in ecommerce and retail media networks using first-party data for programmatic ads

• Shortage of privacy-compliant data for targeting makes programmatic methods more efficient

• Continued shift from manual to automated media buying across digital channels

With budgets moving steadily toward automated, data-driven ad buying, programmatic advertising is poised to capture over 80% of global digital media spending by 2024. The efficiency and optimization potential will make programmatic a vital channel for brands in the coming years.

Video Ads

Video advertising is poised for huge growth in programmatic channels over the next few years. eMarketer predicts that programmatic video ad spending in the US will increase from $15.2 billion in 2019 to over $30 billion by 2024. This represents a compound annual growth rate of 14.8%.

Several factors are driving increased investment in programmatic video ads:

• More precise targeting: Programmatic platforms allow marketers to target video ads to very specific audiences based on demographics, interests, and behaviors. This makes video ads more relevant and effective.

• Better measurement: Programmatic video ads can be optimized in real-time based on performance metrics like view rates, completion rates, and conversions. This enables continual improvement of video ad campaigns.

• New high-impact formats: Programmatic channels have introduced innovative new video ad units like 360 video, interactive video, and 6-second bumper ads optimized for mobile. These modern formats aim to capture viewer attention and drive better results.

• Connected TV growth: The rise in connected TV and over-the-top streaming has opened up new programmatic video ad inventory on the living room screen. Programmatic CTV ads will account for over 60% of total CTV ad spend by 2024.

Programmatic video ad spending will see robust growth in the coming years as brands allocate more budget towards impactful and measurable video ad campaigns across devices. The introduction of new video formats and CTV inventory will provide marketers with more options to effectively engage viewers.

Mobile Ads

Mobile advertising spend through programmatic channels is projected to grow rapidly over the next few years. By 2024, programmatic mobile ad spend is expected to reach $240 billion, up from $155 billion in 2019. This represents massive growth of over 50% in just 5 years.

Currently, mobile accounts for around 70% of total programmatic ad spending globally. However, desktop still claims around 30% market share. The gap between mobile and desktop is expected to widen further as mobile consumes an increasingly larger portion of digital media time.

Mobile programmatic advertising is growing for several key reasons:

• Increased smartphone penetration and mobile internet usage, especially in developing markets

• More sophisticated targeting capabilities on mobile devices due to GPS, device ID, and other mobile data points

• Improved measurement and attribution capabilities for mobile ads

• Expanding mobile inventory available through programmatic exchanges

• Rising popularity of mobile video and new mobile ad formats

As consumers continue to spend more time on mobile, advertisers will shift more of their programmatic ad budgets to reach this increasingly important channel. Mobile programmatic advertising shows no signs of slowing even with the dominance it has already achieved.

Ad Fraud

Ad fraud continues to be a major concern in programmatic advertising. S:\Temp\Ravi\Zorbis SMO ChangesExperts predict that ad fraud will drain over $100 billion from digital ad spending by 2024 if left unchecked. As more advertising dollars shift to automated buying, fraudsters are finding new ways to exploit programmatic systems.

One major vulnerability is the growth of connected TV and streaming ads. Fraudsters use bots and malicious apps to generate fake ad views on CTV devices. Programmatic ads targeted to invalid traffic on CTVs could cost advertisers over $5 billion in 2024.

Sophisticated bots can also mimic human behavior to commit click fraud, scraping sites for data and automatically clicking on mobile and video ads. Without adequate fraud detection, programmatic ads are highly exposed to invalid traffic.

To protect ad budgets, brands need advanced prevention and monitoring. AI and machine learning tools can analyze traffic patterns to identify bot networks and other sources of fraudulent impressions. Blockchain solutions also show promise for bringing more transparency to the programmatic supply chain.

Programmatic advertisers should continually evaluate fraud protection measures and technology. Companies like White Ops, Confiant, and Pixalate offer verification services to identify and filter out fraud before ads are served. As programmatic marketing expands, defeating ad fraud will be critical to its success.

First-Party Data Becomes More Important

With privacy regulations like GDPR and CCPA limiting the use of third-party data, there will be an increased reliance on first-party data in programmatic advertising. Marketers will need to focus more on collecting and utilizing their own first-party data from customers rather than relying on outside data providers.

There are a few key benefits to using first-party data:

• More accurate targeting - First-party data includes detailed information on a brand's own customers, allowing ads to be precisely targeted to similar audiences. This leads to higher engagement and conversion rates.

• Improved results - Campaigns leveraging first-party data for targeting consistently see better performance in terms of click-through and conversion rates. The familiarity with the brand also helps drive sales.

• Future-proofing - Regulations are only getting stricter on third-party data usage. Focusing on first-party data now will ensure brands can continue effective targeting in the future.

With these advantages and the regulatory environment, first-party data will become the most valuable targeting data source. Brands need to invest in collecting and managing first-party data to succeed with programmatic advertising.

Privacy Regulations Reshape Programmatic Landscape

Programmatic advertising strategies have been significantly impacted by the rise of privacy regulations like the EU's General Data Protection Regulation (GDPR). These regulations restrict how user data can be collected and used for ad targeting without explicit consent.

While challenging at first, the privacy regulations are pushing the industry to adapt in positive ways. Advertisers are relying less on third-party data & cookies and more on first-party data strategies with transparency and user control. There is greater incentives to gain direct relationships with customers through owned channels instead of just renting access to them.

Programmatic practices are having to shift from broad targeting to more contextual and segmented approaches aligned with user expectations. Ad frequency capping and avoiding over-targeting help prevent “creepy” ads that follow users across sites. Overall, increased privacy protects consumers while motivating better-quality programmatic tactics.

Connected TV (CTV)

Connected TV (CTV) advertising is poised for huge growth in programmatic ad spending over the next few years. eMarketer predicts that CTV programmatic ad spending will reach $19.1 billion by 2024, up from just $6.1 billion in 2019. This rapid growth is being fueled by increased CTV usage and improvements in programmatic ad targeting capabilities on CTV platforms.

The current CTV programmatic landscape is dominated by major players like Roku, Amazon Fire TV, Samsung TV Plus, Vizio, and LG Channels. These platforms enable advertisers to buy CTV ad inventory programmatically through demand-side platforms (DSPs) that integrate with their supply-side platforms (SSPs).instead of relying solely on direct deals. Programmatic transactions now account for the majority of CTV ad spending.

There are several key benefits driving the rise in CTV programmatic advertising:

• Targeting - Programmatic platforms allow advertisers to layer on data and target desired audiences at scale across CTV apps and streaming content. This is far more advanced than traditional TV buying methods.

• Flexibility - Programmatic CTV provides real-time bidding options and gives advertisers more control over ad frequency, budget pacing, and creative versioning.

• Measurability - Programmatic CTV provides impression-level reporting and attribution analytics. This allows advertisers to optimize campaigns based on real business outcomes.

• Streamlined workflows - Programmatic CTV centralizes media buying on user-friendly platforms versus manually managed direct deals. This makes execution more efficient.

As CTV usage continues to grow globally, programmatic capabilities will unlock major ad dollar shifts from linear TV to streaming TV. CTV programmatic provides advanced targeting and measurement options that advertisers are eager to leverage.

Artificial Intelligence

Artificial intelligence and machine learning are opening new frontiers in the world of programmatic advertising. AI allows advertisers to optimize campaigns in ways that were not previously possible.

Some of the key applications of AI in programmatic advertising include:

• Automated optimization - AI algorithms can analyze campaign performance data and automatically adjust bidding strategies to improve results. This removes much of the manual work traditionally required in managing campaigns.

• Improved targeting - By processing large datasets, machine learning models can identify the best potential customers to target. This allows for more personalized and relevant ads.

• Anomaly detection - AI can quickly detect anomalies or patterns that may indicate ad fraud or other issues. This allows advertisers to address problems faster.

• Predictive analytics - AI tools can forecast future performance and provide insights to allow better planning. Advertisers can estimate volumes and returns on ad spend.

• Creative optimization - Algorithms can A/B test ad creative and landing pages to determine optimal combinations that deliver the highest conversions or engagement.

With programmatic advertising becoming more automated each year, AI looks set to drive efficiencies and performance improvements for advertisers. The ability to act instantly on data and replace manual processes will be a key competitive advantage as adoption of AI accelerates.

Conclusion

Programmatic advertising has seen impressive growth and evolution over the past years, and these trends are projected to continue into 2024 and beyond.

Despite ongoing challenges like ad fraud, the future looks bright for programmatic advertising as it provides measurable results for advertisers and relevant ads for consumers.

Brands that effectively leverage data and automation will see the biggest gains from programmatic in the coming years. The industry still faces obstacles, but programmatic advertising is poised for ongoing innovation and success by rising to meet new challenges.