Chris woke us up with a bang, delivering a highly insightful session at AdExchanger’s Programmatic IO. He shed light on bidstream congestion, a major issue complicating digital advertising today. Bidstream congestion occurs when the same ad impression opportunity is offered multiple times through different supply paths. 

It leads to discrepancies, increased cost, and complexity in the bidding process. Chris addressed this by walking us through the intricacies. His emphasis on “deepening the dependencies” was vital to understanding the financial flows within the supply chain, urging the audience to think beyond surface-level transactions. From the open internet share shift to the nitty-gritty of auction duplication, Chris provided a deep dive into how advertisers, publishers, and intermediaries interact in such a crowded space.

The explosive growth of the industry catalyzed an arms race among publishers competing for attention in an overly saturated market, leading to challenges for advertisers and media agencies alike.

The Big Players and Their Influence

Chris started his session with a detailed analysis of open internet ad spend over the past eight years. Over this timeframe, we saw Google’s gross ad spend take off in 2021, with them dominating the market from 2020 to 2024. Google leads open internet gross ad spend projections for 2024, with The Trade Desk and Amazon DSP right behind them.

Walled gardens like Google, Meta, and Amazon operate closed systems that significantly influence market dynamics. Google’s non-search advertising is projected to hit $35 billion, Meta commands between $100 billion and $120 billion, and Amazon is at $45 billion. In contrast, the open internet still retains a significant share of the market, valued at $70 to $75 billion, providing an alternative to these walled gardens.

What’s also interesting is how these platforms reshape how the industry allocates spending.

According to Chris, LinkedIn, X (formerly Twitter), TikTok, Snapchat, and Pinterest are rising challenger gardens. But things are shifting. While these platforms may not match the spend of the giants, they are creating their own lane. This share shift could totally reshape the competition. In his overview, Chris highlighted just how huge the Walled Gardens’ influence is over market activity. This was the central theme of his discussion as he dove into detail about the various aspects of the ad tech supply chain.

While walled gardens offer a streamlined approach with integrated services, the open internet is more flexible. Navigating between these two requires a nuanced understanding of each platform’s strengths and limitations. Enterprises must strategically balance investments to optimize their advertising reach and efficiency.

The Anatomy of Bidstream Congestion: The Bloat

Bidstream congestion happens when multiple publishers send the same ad impression through different supply paths, resulting in redundant auction entries that DSPs need to sift through.

DSPs process approximately 30 million bid requests per second, a number that grows as publishers try to ensure their inventory gets noticed by the right buyers. Each publisher competes fiercely to make its inventory attractive to DSPs, who ultimately decide which auctions are worth pursuing.

Chris emphasized how ads.txt bloat has become symptomatic of this congestion. The average number of authorized supply paths for top RTB-traded websites, mobile apps, and CTV apps has skyrocketed from January 2020 to January 2024.

This means more paths for advertisers and more complications for DSPs drowned with duplicate and redundant opportunities. Despite publishers initiating numerous auctions, DSPs often listen to the same bid requests. This disparity reveals a harsh truth: initiating more auctions doesn’t necessarily improve a publisher’s chances of being selected.

Auction Duplication: A Path to Efficiency or Chaos?

One huge contributor to bidstream congestion is auction duplication. In this process, publishers engage multiple SSPs to re-auction the ad inventory, aiming to increase the likelihood of being selected by DSPs. While this strategy may seem rational for publishers seeking higher demand, the more SSPs involved, the harder it is to trace each dollar of ad spend. 

“When it comes to rebroadcasting supply chains, four out of every ten bid requests are duplicative options that take multiple fees and expose problems in the supply chain. Today 40% of the midstream is multi-hop resale.” Chris said when illustrating rebroadcasting. In terms of direct paths and monetizing sites and apps the median across the full web, mobile app and CTV supply is 16. 

“The average total impression is presented 16 times through direct supply chains, 41% of bidding requests are rebroadcasted and 59% are direct supply chains. With each impression made available 16 times through direct supply chains, plus another 14 times through rebroadcasted supply chains there is a 30x auction duplication.”

Yet, despite the congestion and duplication, this structure is seen as a necessary evil to maximize monetization potential, raising questions about whether the duplication ultimately serves or hinders the industry’s long-term growth. While it’s a way for publishers to ensure their inventory gets more eyeballs, this duplication creates inefficiencies that the entire industry must grapple with, inflating bid streams and increasing the overall cost of ad placements. 

In simpler terms, rebroadcast paths mean that bid requests go through multiple hops before they reach a potential buyer. “DSPs who do not take advantage of rebroadcasting opportunities will go out of business,” Chris pointed out. The industry is evolving, and those who don’t evolve with it — whether they’re buyers, sellers, or intermediaries — could be left in the dust.

A Look to the Future: Will Duplication Save the Day?

Chris closed by exploring whether auction duplication is an efficient solution to bidstream congestion or a stopgap for masking deeper issues. On one hand, duplication is a great opportunity for publishers, providing them multiple chances to get their inventory seen, thus maximizing potential revenue. On the other hand, it adds layers of complexity that make the supply chain inefficient and opaque, driving up costs for everyone involved.

“Understanding the programmatic supply chain is no longer optional for stakeholders in the ad tech space. It requires the operational mindset of an insider — someone willing to get their hands dirty in the technical details of how inventory is auctioned, sold, and bought. You have to deepen the dependencies to really understand how money moves in the supply chain,” Chris said.

The ad tech ecosystem is changing rapidly, and bidstream congestion is but one symptom of the evolution. Whether auction duplication can effectively mitigate congestion or add more fuel to the fire is still a debate. But for those in the trenches of ad tech, understanding these dynamics is essential to navigating the future — and making sure they come out on top.

Industry leaders must innovate and adopt new practices to mitigate the detrimental effects of bidstream congestion. Auction duplication, while currently the norm, requires reevaluation.

Publishers and advertisers need to explore ways to streamline the bidding process, perhaps by improving the transparency and efficiency of SSP-DSP interactions or implementing more advanced targeting algorithms to reduce unnecessary bid requests.

The post Bidstream Congestion: Cracking the Ad Tech Supply Chain Code appeared first on AdMonsters.

Technology is evolving faster than we can blink and it’s becoming clear that it’s time creativity and control were reclaimed. As monopolies and walled gardens dominate and limit access, the balance between innovation and content creation is more crucial than ever. In a rapidly changing ecosystem,  publishers are exploring strategies to navigate an open internet increasingly challenged by distribution obstacles and signal loss.

Once a beacon of free and open access, the open web faces an identity crisis. Media companies that once thrived on direct consumer connection are struggling with the rise of walled gardens. Marketers, for their part, acknowledge their role in building these silos as they increasingly funnel media budgets into tech giants. Reclaiming control of data, creative strategies, and audience engagement is critical to preserving the future for both sides.

Publishers should not look at these shifts as threats but as opportunities to develop new strategies that align with consumer behavior and market demands. 

From the rise of social-driven search and FAST channels to Google’s ongoing antitrust trial, ProgIO spoke to many of the challenges facing publishers today. As the industry continues to push for transparency, fairness, and a more open ecosystem, the path forward depends on innovating while maintaining trust with consumers and each other. 

Here are our top takeaways from Day 1.

Breaking Free: How Marketers Can Reclaim Creativity in a Tech-Driven World

Eoin Townsend, Chief Product Officer at Cadent, talking about convergence at programmatic IO. Photo by Donna Alberico.

Eoin Townsend, Chief Product Officer at Cadent, walked us through industry shifts driven by audience, inventory, optimality, and privacy. He says, “The technology we have today is not the technology we’ll have tomorrow.”

Let him tell it: marketers need more control to move away from monopolies and hone in on new technologies to transform their roles in the industry. Eoin emphasized that marketers spend too much time on tech rather than creative marketing. We are evolving from scale, automation, and walled gardens to a new phase focused on integration, alignment, and collaboration. 

More highlights from his talk:

• Let AI automate the hard stuff.
• Take advantage of multi-faceted solutions that integrate third-party data and work across walled gardens.
• Adopt new technology and legal frameworks to ensure compliance and consumer trust.

Eoin’s main argument is: “Let marketers be marketers” free them from technological constraints!

The Future of the Open Internet Is?

Allison Schiff, Managing Editor at AdExchanger, Ben Hovaness, CMO at OMD, Cavel Khan, Chief Growth Officer at Group Black, and Ari Paparo, CEO & Contributor of Marketecture Media discuss the future of the open internet. Photo by Donna Alberico.

What is the open web? The term has gotten lost in the mix, and AdExchanger’s Allison Schiff ensured the panelists revealed the definition from their perspectives early in the session. According to Ari Paparo, CEO & Contributor at Marketecture Media, if you can access a website for free and buy ads freely, it is part of the open web. 

Media companies are losing distribution channels and struggle to connect directly with consumers. What are the biggest challenges of the open web? Walled gardens and signal challenges. Can marketers blame consumers for this mess? Not exactly. Marketers helped create the walled gardens by continuing to invest in and work with them.

“The open internet lost the resources to create the content and do a lot of things that it did to keep the communities it had built,” revealed Cavel Khan, Chief Growth Officer at Group Black. “That’s why we are all seeing the decline over the last three years. Big publishers are going out of business or restructuring.”

More key points from this session:

• The cloudiness around Chrome’s plan for cookies makes it difficult for publishers to determine the best strategy to combat signal loss. 
• Publishers have great tools like WordPress, Beehiiv, and Ghost, along with podcasting, as new solutions for reaching people and monetizing those connections. 
• When asked what the future of the open internet was, the panelists responded bright, sleek, diverse, and changing. 

TikTok, The Latest to Step In the Search Game

AdExchanger’s Executive Editor Sarah Sluis sits down with Blake Chandlee, President of Global Business Solutions at TikTok, to talk about the platform entering the search business. Photo by Donna Alberico.

TikTok is the app beating Google as the number one search engine. With data showing significant search activity on the app, we’re learning that rich, social media-driven search results are key for connecting with consumers and influencing their discovery and purchase intent. It’s no surprise the company is investing in bringing advertising to search. 

“There are two key data points that triggered this for us. One is that independent research proves that 55% of people get their search results from social media and video,” said Blake Chandlee, President of Global Business Solutions at TikTok. “It was just a very good box of rich examples. An example might be if you’re planning to travel to Singapore when you visit a traditional search engine, you’d find links to guide you through that process. On the other hand, you go on to TikTok or some other platforms where you’ll get really rich videos of people like you going through the same decision-making with their experience. It’s a very different experience in the back end of this.”

Ads have been part of TikTok’s monetization model for a while now, but the TikTok shop shook up the game when it came to fruition last year. Live-streaming allows creators to earn money by getting “tipped” from their audience, while the TikTok shop facilitates seamless transitions within the app. TikTok’s investment in logistics and the closed-loop shopping experience allows it to fully capitalize on the commerce generated by creators.

More interesting insights:

• The social media company’s motto: “Don’t make ads, make TikTok’s” works.
• TikTok caters to its users’ diverse interests, allowing brands to connect with highly engaged audiences.
• Ensuring that ads are native is key; don’t oversaturate because ad fatigue can be real.
• TikTok stands out because it is independent and doesn’t rely on partnerships or external links for e-commerce.

Why The Trade Desk is Winning According to Wall Street

Shweta Khajuria, Managing Director of Wolfe Research shared her predictions for the industry from an investor’s perspective. Photo by Donna Alberico.

With the ongoing regulatory scrutiny of Google and the pending cookie deprecation, scale and first-party data are both emerging as leaders in the industry.

Shweta Khajuria, Managing Director at Wolfe Research, dove deeply into The Trade Desk’s success. Partnering with agencies leads to higher retention rates. Product innovations like CTV and UID2 have kept The Trade Desk at the top of the industry. Also, their independence and omnichannel approach allow them to maintain objectivity and avoid conflicts of interest. 

“Trade Desk saw the potential of bidded programmatic and connected TV before most others in the industry,” said Shweta. “As a result, with the head start that they saw, they saw a step change in their growth rates and trajectory.”

Shweta also predicts that Google will spin off one of its ad tech businesses, which could level the playing field. 

Shweta’s other predictions:

• The Trade Desk’s Open Path and Magnite’s clear line anticipate the convergence of the demand and supply sides.
• Efficiency gains will be necessary, and pricing pressures might arise as DSPs and SSPs merge.
• Larger publishers may develop their yield management systems, leading to supply-side consolidation.
• The demand side might gain an upper hand due to its proximity to ad budgets.

Google on Trial: The Battle for Fairness, Transparency, and the Future

Allison Schiff talked to Claire Atkin, Co-founder & CEO of Check My Ads and Jason Kint CEO of Digital Content Next about the ongoing DOJ vs. Google antitrust trial. Photo by Donna Alberico.

Google’s monopolistic practices have heavily hindered the publishing industry, and we are all standing on our toes, waiting to see the outcome of this decision. Jason Kint, CEO of Digital Content Next, explained how Google is extracting value that should go to newsrooms and entertainment companies. 

Jason talked about “dynamic revenue sharing,’ where Google manipulates bid prices to maintain its margins, often behind publishers’ backs. With a press box seat at the trial in Virginia, he says Google’s defense strategy is to confuse the market and redefine it to include more competition, like TikTok or TV. Isn’t this what we’ve all been thinking? Isn’t this a weak defense?

It was great seeing Claire Atkin again doing her best: exposing the real. According to Claire, Google plays a huge role in monetizing misinformation and lacking transparency. Smaller businesses suffer since they don’t receive funds or adequate support from Google when campaign issues arise. Claire argues for log-level data transparency and know-your-customer laws to ensure fair practices. 

Other important highlights:

• Judge Leonie Brinkema is skeptical of Google due to evidence purging, which impacts the credibility of Google’s witnesses. 
• The trial is part of a broader antitrust movement against major tech companies, and breaking them up could lead to more opportunities and fairness in the industry. 
• Both speakers hope to see a future where advertisers can better track and verify their ad placements, leading to more accountability and fewer fraudulent practices.

FAST is Moving Fast

Katie Barrett, Head of Strategic Sales at LG Ad Solutions talks the future of FAST at AdExchanger’s Programmatic IO Day 1. Photo by Donna Alberico.

Several factors are contributing to the rise of FAST, such as subscription fatigue and evolving audience behavior. On a daily basis, consumers are shifting their mindset from avoiding ads to accepting them if they come with free content. 

“We see that 53% of our consumers are spending at least 2 hours a day in FAST, and the average time of the session is 73 minutes,” said Katie Barrett, Head of Strategic Sales at LG Ad Solutions. “Eighty-seven percent of FAST users have free streaming channels they watch regularly. This shows high levels of habitual viewing. Eighty-one percent believe that FAST streaming channels offer high-quality content. This is important because this perception of fast being low quality is being challenged here.”

Contrary to popular belief that FAST viewers are less engaged or loyal, Katie argues they are developing strong followings due to curated content. The stereotype that FAST viewers are solely budget-conscious is false, as the data shows a diverse and affluent audience.

Other Factors of FAST:

• The median income of FAST users is $85,000, with an average of $110,000, and 43% earning over $100,000 annually. 
• FAST is popular among family units, with a high percentage of users owning homes, being married, and having children, underlining its family-friendly nature.
• FAST is a valuable platform for brands aiming to reach key demographics.

On the Horizon: A New Era for Publishers and Marketers

Publishers and marketers are standing on the brink of significant change. With walled gardens tightening their grip and signal loss challenging traditional methods, publishers are redefining their approach to audience engagement, while marketers are pushing for more autonomy in how they reach and connect with consumers. 

From publishers exploring innovative content distribution methods to marketers reclaiming creative control, the next chapter is about pushing beyond the familiar and embracing new opportunities. 

The journey doesn’t stop here. Day 2 included more revelations and strategies, so stay tuned for our Programmatic IO Day 2 wrap-up on Monday. We’ll dig deeper into the discussions, highlighting key takeaways and what lies ahead for publishers and marketers in this fast-moving space. 

The post PROGIO Day 1: The Next Chapter for the Open Internet, Google vs. DOJ Face-Off, and More appeared first on AdMonsters.

Reaching the right audience at the right moment is critical to business success. However, if the company’s budget is limited, this is not easy. Modern technologies, such as programmatic buying, may come to the rescue, allowing small and medium enterprises to advertise cost-efficiently and reach their marketing goals faster.

Why Programmatic (and What’s That, Really)?

Traditional advertising was mainly manual: it required finding a website where you’d like to place your banners and communicating with its owners. It was a time-consuming and suboptimal solution, plus often, it was expensive. Today, there’s a modern alternative called programmatic advertising. The word “programmatic” refers to how it operates: instead of people, the algorithms buy and sell ad space.

But it’s not just automation that makes programmatic so enticing – it’s also relevance. This technology can ensure your ads will be seen by the right audience in the right context. For instance, you’ve seen programmatic ads when shopping on Amazon. This company shows customized ads to visitors based on their purchasing and browsing history. 

Programmatic advertising revolutionizes the industry, making it easier for global companies and small and medium businesses to access large target groups.

Let’s look at some data to prove this point. According to Statista, in 2023, global spending on programmatic advertising reached $558 billion. By 2026, this number will likely grow to $700 billion. Also, the share of programmatic advertising in digital spending worldwide has increased since 2020. In 2020, it constituted 77.04%, in 2023 – 81.06%, and in 2029, it’s projected to reach 84.92%.

In 2021, 45% of small business respondents in the USA said they paid for digital advertising. They spent $534 monthly on average, and 93% of small companies planned to increase this amount.

So, programmatic advertising is undoubtedly the future. And it’s worth delving deeper into the subject. 

A Closer Look at Programmatic Advertising and Its Benefits 

Basically, the programmatic advertising process looks like this:

• A company creates an ad campaign, describes the audience (demographics, location, etc.), and decides on a budget.
• The ad is downloaded to the programmatic exchange via a dedicated platform. The exchange conducts auctions for ad space: who’s willing to pay more for showing their ad wins.
• A user visits a website participating in the exchange and sees the winning ad. 

Companies can use various types of programmatic ads, such as video ads, audio ads, and out-of-home (OOH) ads on billboards and displays. Today, video format is the most popular option, although OOH usage is growing in retail and other industries.

Every business, regardless of size, can experience the advantages of programmatic buying. But what are the benefits, exactly?

1. Cost-Effectiveness – Programmatic buying allows SMEs to control their budget and spend exactly as much as they are ready. Moreover, you can always be sure your ad will reach the right audience, so your money won’t go to waste. Companies often spend a significant share of their marketing budgets on traditional ads, like in magazines or on TV. Sure, many people will see this campaign, but how many belong to your target audience? With programmatic buying, every time your ad is displayed, counts.

According to Google News Initiative, direct ads cost two to four times more than programmatic ads. The numbers are $10-20 per thousand impressions for direct ads and $1-5 for programmatic ads.

For example, capturing the right audience’s attention was challenging for the Canadian clinic Whistler Medical Aesthetics. They tried traditional advertising channels like radio and magazine ads but weren’t satisfied with the cost-efficiency ratio. The company wanted to attract new customers, but the conversion rates were low. 

Eventually, with the help of consultants, they changed the strategy and focused on several types of programmatic ads. After the first month, traffic to their website grew by 60%. The clinic spent 50% less but got 25% more in return.

2. Advanced Targeting – Programmatic buying helps small and medium businesses identify and reach the right target groups, which is challenging with traditional advertising. The secret behind it is the approach’s core: focus on the audience, not the website. After all, for a company, it doesn’t really matter where the potential customer sees its ad. What matters more is what happens next. The programmatic approach suggests delegating the choice of websites to algorithms. 

So, to run an efficient campaign, a company needs to target the audience appropriately. It can choose among multiple targeting options and combine several in one campaign. The most popular criteria are demographics, interests, and online behavior. The better you describe the audience, the higher the engagement and conversion rates.

For example, a non-profit organization, The Amanda Foundation, wanted to speed up the process of adopting homeless cats and dogs. They decided to try programmatic advertising to reach people interested in hosting pets. Advanced targeting helped the organization identify the right audience and create a profile for potential pet owners. For instance, young people prefer more active dogs, while older people would likely adopt a calmer animal. The campaign’s results exceeded expectations: all the pets found new homes.

3. Real-Time Optimization – Programmatic campaigns are more flexible than traditional advertising. Moreover, the ad’s performance is measured in real-time, and the campaign can be adjusted on the go to get better results. Data on total views, conversions, impressions, etc., is recorded all the time while the campaign is running.

Here are the mechanisms enabling real-time optimization:

• Bid adjustments allow changing the frequency of ad showings depending on the device, location, time of day, etc. There’s also an option to adjust bids based on performance metrics. This helps a company maximize its return on investment in advertising.
• Ad placement optimization. Programmatic buying allows placing ads in the best possible location on the web pages and changing it if performance metrics aren’t good enough.
• Audience retargeting. Programmatic advertising aims to increase conversion rates. Hence, it can reach people who have already interacted with a company. It helps to engage non-customers and offer something new to existing clients.

4. Flexible budgeting – Programmatic advertising allows companies to set a spending limit, and they can decide whether it will be per day or for the whole campaign. Small and medium businesses often can’t afford pricey advertising, so it’s crucial to keep the budget under control. Luckily, programmatic buying helps prevent overspending.

As you can see, the benefits of programmatic advertising are convincing. Now, let’s determine how to achieve the best results using this technology.

Better Targeting for Better Outcomes

Programmatic buying isn’t a magic wand. Companies still need to do their homework to make it work, i.e., get to know their customers. With demographics, it’s not hard; you just need to analyze the data you already have. But if you aim for advanced targeting, you’ll have to discover more: what are your customers’ interests? What do they do in their spare time? What do they value the most? Consider conducting an online survey or interviewing your customers to collect this data.

The more you know about your audience, the more targeting options you can use. Among them:

• Behavioral Targeting – This option focuses on customers’ online activity, such as visited websites, cart abandonments, purchases, etc. A simple example is ads with a particular product you start seeing after visiting an online store and looking at similar products. If implemented correctly, behavioral targeting helps companies increase sales and conversion rates. For example, the children’s clothes brand Sunuva couldn’t afford a big sales team but needed a sales boost. Behavioral targeting was the answer: the company focused on cart abandonments and offered visitors relevant product recommendations. It helped increase turnover by 8.9% since the first day.

• Contextual Targeting – This option allows ads with relevant content to be placed on websites. For example, watching an interview with a famous athlete on YouTube and seeing the ad for a brand-new sneakers model results from contextual targeting. Marketers discovered that such advertising increases conversion (and irritates the audience less). Some more examples are knife ads on the website with recipes and sports equipment ads next to the article about the exercise routine.

• Geotargeting –  is a location-based option. Simply put, you reach customers in a certain geographical location and show them your ad. For instance, a restaurant may target people within a 3-block radius. Another popular tactic is to target customers in locations (country, state, city, ZIP code, etc.) that have already shown high conversions. For example, the cider maker Marners launched a campaign in four UK cities to sell tickets to its sponsored events. The company chose the locations where, according to the data, people were the most likely to buy tickets spontaneously. The campaign was a huge success: not only were all the tickets sold, but people also ended up on a waiting list.

For small and medium companies, a wise ad placement strategy requires considering relevance, time, and exposure. This is when targeting options come into play. Any business can choose one of them or combine a few to ensure the best possible result.

Managing Campaigns with Programmatic Platforms

Modern programmatic platforms offer small and medium companies practical solutions to manage their ad creatives effectively. For instance, businesses can:

• Customize Their Digital Ads – If a company has done its homework, it knows much about target groups. So, it can customize ads for different customer segments and channels. After all, the “one fits all” approach rarely works; you often need more than one creative option.

• Conduct A/B Testing – A company can test two or more different ad creative options and compare the results. For example, a clothing store can experiment with different images and offers, monitor their performance and draw conclusions. This helps make more informed decisions, reach the right audience with the right message, and, eventually, save money.An impressive example here is Lacoste. A designer brand decided to boost its summer sales in France, the UK, and Germany and turned to programmatic advertising. First, they conducted audience analysis and defined customer profiles. Then, they harnessed the power of A/B testing: they ran various versions of creatives, adjusted them, and tested new ads. The process continued until the company reached the best results. The campaign resulted in 19,749,380 impressions and 2,290 new sales.Sure, small and medium companies’ budgets are much more humble than Lacoste’s, but they still can analyze data and experiment with A/B testing.

• Use Dynamic Creative Optimization –  Since the programmatic approach includes permanent performance tracking and users’ behavior, it allows companies to adjust creatives, such as images and messages, in real time to ensure their ads are as relevant as possible for viewers. How does it work? A company must create a flexible template with elements that may change, such as calls to action (CTAs), images, etc. Then, track the metrics of each option, if necessary, eliminate inefficient versions, and add new ones.

Creatives play a vital role in engaging customers and increasing conversions. So, one of the company’s primary tasks is to ensure they deliver the message to the right audience in the best possible way. 

Customer segmentation is essential to achieving outstanding results. Dynamic creative optimization will be the most efficient if you’ve identified critical segments of potential clients. You can divide them by demographics, interests, or online behavior. Later, it will help you connect to each segment with the most relevant version of the ad. 

Last but not least, programmatic platforms measure ad performance and create sophisticated reports that companies can use to improve their decisions. The typical set of metrics includes clicks, impressions, conversions, and return on ad spend (ROAS). This data is enough to evaluate the campaign results and compare your expectations with reality.

Today, programmatic buying is changing the market rules. With its cost efficiency, budget allocation flexibility, advanced targeting, and real-time optimization features, small and medium businesses can achieve the success they could only dream about, reach a wide new audience, and learn much more about existing clients. So, why not try it as part of your marketing strategy?

The post Smarter Advertising: How Small and Medium Businesses Can Harness the Potential of Programmatic Buying appeared first on AdMonsters.

According to several US forecasts, 2024 promises to be a banner year for advertising. Last December, IPG Mediabrands predicted that ad spend would grow 8.4% this year, but last week, its research arm, Magna, raised its forecast, saying revenues would grow 9.2% to reach $390 billion. 

Some, but not all, of that increase will be due to spending on political ads. Retailers and travel brands will contribute to the boon by increasing ad spend by 9%; automotive will spend 6% more over 2023.

Social media advertising will grow by 14 percent to reach $80 billion, growing 14% from 2023. That’s more than advertisers spend on linear TV. Advertising in long-form streaming will grow 13% to reach $10 billion, thanks in large part to ads in Amazon Prime.

Magna isn’t alone in predicting better revenues. Last week, Madison and Walls’ Brian Wieser predicted an increase in ad revenues. Moreover, not all that growth will result from political ads, although that will increase to $15 billion this election season. 

“My expectations for the advertising industry for 1Q24 now call for expansion of 8.0% excluding political advertising, and for the full year 2024 I expect 5.6% ex-political growth. In my prior forecast, I expected 1Q24 growth of 7.0% and full-year expansion of 5.2% on a comparable basis,” he wrote in a blog post.

The Non-Recession’s Impact on Publishing

Interestingly, both Magna and Wieser cite improving economic conditions as the source of growth, including a rise in GDP, slowing inflation, and better-than-expected job growth.

For the past two years, publishers have laid off staff in anticipation of lower advertising revenue (in 2023 alone, publishers shed 19,000 jobs). Those cuts were deemed necessary due to the impending recession, which never materialized.

This time last year, we wrote about the layoffs at publishing houses due to an impending recession, even though ad spending was rising.

Media as Revenue Generator

Economic historians have long advised that down markets are a great time to advertise, and brands that spend while others cut back stand to gain big market share.

However, according to Marc S. Pritchard, Chief Brand Officer at Procter & Gamble, advertising is a way to add value to a brand, regardless of economic conditions. Writing on LinkedIn, he explains:

“There’s a way of growing markets that doesn’t get the attention it deserves: MEDIA. Media grows markets, yet it is perhaps one of the most underrated and underused ways of accelerating market growth. It’s generally the largest spending element in the marketing mix and can have a significant impact on market growth—positive or negative—but is often considered an expense to be cut when there are profit problems. However, when done well, media investment is a revenue generator that can make markets bigger.”

Publishers have always portrayed their inventory as a source of brand growth, and it’s gratifying to hear the fourth largest company in the world agree. The trick, as Pritcher notes, lies in doing it well. To that end, AdOps teams are deploying multiple AI tools and platforms to identify and respond to trends to drive campaign performance, as we detail in the upcoming Publisher Pulse. With strong economic growth and better insights into campaign performance, perhaps advertisers will continue to increase spending in 2025 and beyond.

The post Ad Spending Will Jump More Than Anticipated in 2024 appeared first on AdMonsters.

Every year, advertisers pay top dollar to feature their ads during the Super Bowl because they know they will reach a large audience. It’s an essential part of the annual pastime for consumers to decide which Super Bowl ad tickles their fancy the most. Yet, even more than large audience engagement, the event assures that the ads catch users’ attention. An iconic, uninterrupted ad spot for viewers — what more could advertisers ask for? 

There were many wins at the Super Bowl — the Kansas City Chiefs, Usher, and the Beyhive. But the real question is, who took the advertising crown? According to AdImpact’s viewership data and day-after advertising analysis, certain categories remained popular, such as beer and sports betting commercials remaining popular. 

Here’s what the stats say: 

The Viewership Breakdown of the Most Streamed Super Bowl of All-Time

Super Bowl LVIII broke TV rating records by becoming the most-watched program in US television history, at least officially. Therefore, it is the most streamed Super Bowl ever. That’s a staggering fact. Still, our CTV-obsessed professionals may be wondering what medium consumers watched the game. 

AdImpact’s data revealed that most viewers watched the game on linear TV (59%), and 14% watched on YouTube TV. Linear TV remains king of the castle in terms of Super Bowl viewership, but will that change as the TV industry evolves? 

We already know that a Disney standalone ESPN streaming service will hit the streets in 2025. Alongside watching their favorite sports, the streaming service will feature an immersive experience for sports fans, offering e-commerce and features like integrated betting and fantasy sports. With a locked and loaded plan to build an audience and keep them, I’m sure all our CTV geeks will be looking to see if ESPN’s new streaming service will dominate viewership for that year’s Super Bowl. 

The Top Performing Ads of the Night

Commercials for the 2024 Super Bowl commanded higher rates than those for last year’s game, ranging from $6.5 million to $7 million per 30-second spot broadcast on TV channel CBS. With ad spend budgets on the line and only a few chances to ensure all viewers remembered your ad, brands were scrambling to score a last-minute field goal to reach that top-10 spot. 

There’s no room to waste ad spend, especially with the spine-tingling ad recession that plagued the industry at the beginning of 2023. Even more, some industry experts predicted ad spend growth deceleration starting this year. 

All brands fought valiantly to the bitter end, but only a few could score their way to the top. According to TV outcomes company EDO, here are the Top 10 ads that drove the highest consumer engagement: 

1. Deadpool & Wolverine (Walt Disney Studios Motion Pictures), Coming Together:15, generated +2,243% as much engagement as the median-performing Super Bowl LVIII in-game ad. 
2. Wicked: Part One (Universal Pictures), Afraid:60, +2,008%
3. Volkswagen, An American Love Story:60, +1,594%
4. Poppi, The Future of Soda is Now:60, +1,561%
5. Temu, Billionaire:30, +1,342%
6. Twisters (Universal Pictures), Chase It:30, +1,125%
7. Temu, Billionaire:30 +1,041%
8. He Gets Us, He Washed Feet:60, +942%
9. Robert F. Kennedy for President, Kennedy:30, +891%
10. Shogun (Hulu), Epic Event Promo:30, +639%

Biggest Ad Trends 

EDO also provided an analysis of some of the night’s biggest trends. New soft drinks, foreign auto brands, and nostalgia took center stage in the Big Game. International automakers seized the opportunity left by the absence of U.S. conglomerates, with Volkswagen leading in engagement with a nostalgia-driven ad. 

Despite criticism, online retailer Temu’s repetitive ad proved effective, securing top spots. Poppi emerged as a standout among soft drink brands, while alcohol ads dwindled after last year’s heavy investment. Nostalgia-driven TV reunions, including cast reunions from beloved shows, resonated with audiences, notably boosting engagement for brands like Mountain Dew Baja Blast.

The post Linear TV, New Soft Drinks, Foreign Auto Brands, and Nostalgia Reigned Supreme at Super Bowl LVIII appeared first on AdMonsters.

In 2020, AdMonsters launched the Wrapper Newsletter. Our aim: To summarize exciting news items that catch our eyes and link them to wider developments in digital media and advertising. And we also point you in the direction of great podcasts and compelling industry voices to follow on social media.

If you’ve been missing out, here are AdMonsters Wrapper archives. And don’t forget to subscribe to receive each issue every Monday in your inbox.

Now on to the the list. (This list is a compilation of readers’ favorite stories from 2023.)

The Top Digital Media and Ad Tech News of 2023

U.S. AD SPEND PROJECTED TO INCREASE IN Q4 AND 2024 

Ad recession where? At the start of 2023, the ad tech industry was filled with fear-mongering rhetoric that an ad recession was bound to sweep the ecosystem. As the year progresses into Q4, ad spend predictions are much more optimistic. (Read more)

THE TRADE DESK WANTS TO CONTROL RETAIL MEDIA

The Trade Desk’s CEO, Jeff Green, told investors he has his eyes set on the $500 million retail media market. Green is confident he can take a large chunk of that $500 billion pie. The Trade Desk plans to leverage the fact that they are a significant source of demand for ad sellers to capture the opportunities in e-commerce advertising.

“I think over time most of that will be available to The Trade Desk — even things like sponsored listings where it’s optimal for those [placements] to get as much demand as possible,” said Green. “There’s more supply than there is demand.” (Read more)

BOT FRAUD ON THE RISE, DOUBLING YOY

People are spending 28% less time online this year than they did in 2022, yet traffic, as many network administrators will tell you, is up. What’s going on?

According to HUMAN Security, a company specializing in fraud prevention, bot traffic is rising, more than doubling YOY. As a percentage of overall traffic, bad bots are rising faster than legitimate users. (Read more)

GOOGLE’S GLOBAL LEGAL TROUBLES; GOOGLE ANNOUNCES DEADLINE FOR COOKIE DEPRECATION

Google’s Global Legal Troubles

Antitrust season is year-round for big tech in 2023.

The tech titan Google has found itself in another antitrust debacle. The EU dropped a bombshell, charging them with violating EU antitrust laws. Google’s dominance in online advertising has led them down a slippery slope, undercutting their competitors left and right. (Read more)

Google Announces Deadline for Cookie Deprecation, for Real This Time

Google has extended the deadline for turning off third-party cookies in Chrome several times, raising doubt around the ad tech community that the cookie would ever crumble.

Joey Trotz, Director of Google’s Privacy Sandbox, eased all industry suspicion at AdMonsters Ops NY conference in a session about why publishers should start testing Google’s Privacy Sandbox now.

“One hundred percent, we are deprecating the third-party cookie in the second half of 2024 – full stop,” said Trotz. (Read more)

THE DOJ SUES GOOGLE (AGAIN). PUBLISHERS RESPOND; STATE OF DATA 2023

The DOJ Sues Google (Again). Publishers Respond

It’s deja vu for Alphabet’s legal team, as the Justice Department once again filed an antitrust lawsuit against the company. This time, the DOJ, joined by eight states, accused the tech behemoth of absolute dominance over the digital ad tech space. (Read more)

Everything You Need to Know About IAB’s State of Data 2023

We will see five new state-level data privacy regulations coming to life in 2023, with a few already brought to life this month. So, it’s perfect timing that the IAB unveiled their sixth annual State of Data initiative, IAB State of Data 2023: Data Clean Rooms and the Democratization of Data in the Privacy-Centric Ecosystem this past Tuesday at IAB ALM ’23 (and it was one for the books). (Read more)

TRIOPOLY AGREES TO AI SAFEGUARDS; AD TECH SCRUBS MFA SITES; OREGON PRIVACY ACT SIGNED

7 AI Companies Agree to Safeguards; the Triopoly Among Them

The Biden Administration is pretty uneasy with AI for numerous reasons and has wrangled voluntary commitments from seven AI companies to put safeguards around the risks posed by generative AI, including algorithmic discrimination and disinformation.

“Companies developing these emerging technologies are responsible for ensuring their products are safe. To make the most of AI’s potential, the Biden-Harris Administration is encouraging this industry to uphold the highest standards to ensure that innovation doesn’t come at the expense of Americans’ rights and safety,” the White House said. (Read more)

ANA Study Leads Ad Tech Vendors to Scrub MFA Sites

Made-for-advertising sites flew under the radar for some time, but thanks to the Association of National Advertisers (ANA) study, MFAs are getting a much-needed crackdown.

Companies like Magnite, Sharethrough, and PubMatic are blocking MFA sites to keep them from profiting from alleged deceptive practices. MFAs thrived in the supply chain for years. However, that changed when the ANA launched an investigation and found sites riddled with disruptive user experiences, tactics that compromised content value, and security risks. (Read more)

Oregon Governor Signs Opt-Out Privacy Laws

In a groundbreaking move, Oregon Governor Tina Kotek signed a privacy bill, granting state residents the power to regain control over their online advertising fate. The law allows state residents to opt out of ad targeting based on their online activity.

The Oregon Consumer Privacy Act (SB 619) ensures that consumers have the right to know what personal information brands collect about them and who receives it. In addition, the language around personal data is relatively broad, covering identifiers such as cookies. (Read more)

The post ICYMI — Top Digital Media and Ad Tech News of 2023 appeared first on AdMonsters.

We’d also like to thank you, our community, for your support. From clicking on and reading our content to providing us with story ideas  — you were there to help us grow. Many thanks to our Advisory Board as well for being a sounding board and inspiring us.

And, we definitely couldn’t have done it without our full-time content staff, News Editor, Andrew Byrd, and Content Manager, Yakira Young, as well as our freelancers — Susie Stulz, Emily Dalamangas, and Kacey Perinelli — and, of course, our many industry contributors who have written columns for us or shared their POV for an article or Playbook or two. Thank you!!!

Now on to the list…

Best of AdMonsters: Your Favorite Stories of 2023

What’s Hot in Publishing and Ad Tech: An AdMonster’s Q&A with Scott Messer

We interviewed Scott Messer, an executive media operator with a passion for creating, operating, and monetizing digital businesses. He first started in the digital media business back in 2006 and has held numerous leadership positions within the industry. Today, he is the Principal and Founder of Messer Media.

We spoke with him about the challenges of Seller Defined Audiences, Deal Curation as a Service, and the recent EU Study on the impact of recent developments in digital Advertising on privacy, publishers, and advertisers. (Read more)

Data Monetization in the Era of ID Deprecation: Best Practices to Pivot and Evolve Your Data Strategy

With ID deprecation well underway and consumer privacy legislation on the rise, publishers face more complex obstacles than ever before. Yet the consumer expectation for personalization remains, as does the extreme competition for engaged eyes and ears.

When it comes to evolving data monetization, publishers are positioned at various levels of sophistication and preparedness. Notably, each publisher possesses a unique composition of data signals. While some are blessed with substantial strong quality 1P signals, others rely more heavily on cookie-based identity, with limited access to alternative identifiers. Given these diverse circumstances, there’s no one-size-fits-all solution. Nonetheless, there are best practices and levers of control you can employ to shift your strategy and mitigate risk.

The pivotal question emerges: What is the optimal place to start, and what are the best practices for privacy forward data monetization? (Read more)

A Path to Net-zero for the Digital Advertising Sector

The digital advertising sector has a dirty little secret: its carbon footprint is huge. How big?  About the size of the airline industry.

Collectively, digital ad tech accounts for 3.5% of the global greenhouse gas (GHG) emitted each year. A single campaign that fills one million impressions has the same carbon footprint as a roundtrip flight from Boston to London. (Read more)

Forget the Hype: How Publishers Can Safely Enhance Their Products with AI

The National Eating Disorder Association (NEDA) rolled out — then quickly took offline — a chatbot called Tessa. Tessa was supposed to offer callers guidance, but she urged callers to restrict their diets, assuring them they could safely lose one to two pounds per week. It’s a reminder that generative AI products must be rolled out with care.

But what does that “care” mean? What’s involved? Initiatives like BuzzFeed’s Botatouille are a great way for publishers to enhance their products to gain more subscribers and offer more value to their existing subscriber base.

To understand how publishers can deploy AI bots safely, we spoke with Kyle Alan Hale, a Solutions Architect at Rightpoint. Kyle holds an advanced degree in philosophy of mind and neuroscience and is currently working on a degree in computational linguistics, focusing particularly on language models. (Read more)

The State of Programmatic Advertising in 2023

According to a webinar hosted by Comscore, 2023 State of Programmatic, programmatic spend has experienced exponential growth, doubling over the past four years. Data shows that over 91% of $148 billion in digital display dollars are transacted programmatically. Where does this leave the state of programmatic? 

The short answer is that the automated supply chain is flourishing, but signs indicate an ad spend slowdown. The further context suggests that since programmatic accounts for nine out of ten digital ad dollars, the market is reaching a state of saturation rather than stagnation. (Read more)

Legit Black-owned Publishers Are Being Labeled MFA Sites, but Maybe There’s a Solution

In the wake of the media reckoning sparked by the tragic murder of George Floyd in 2020, advertisers funneled more ad spend toward Black-owned publishers. Ad agencies, driven by commitments to allocate a portion of their media budgets to these publishers, sought to address the longstanding disparities in media representation.

However, Black-owned publishers now face unique challenges, primarily related to declining referral traffic from sources like Facebook ever since the social network’s algorithms started deprioritizing news.

This decline has made it increasingly tricky to meet ad impression requirements stipulated in deals with advertisers. Consequently, some Black publishers felt compelled to buy traffic or partner with other publishers to extend their reach.

But here lies the conundrum: as Black-owned publishers seek to bolster their audiences and meet advertiser demands, they face the risk of being labeled MFA sites.(Read more)

The post Best of AdMonsters: Your Favorite Stories of 2023 appeared first on AdMonsters.

You should also check out the ANA’s Qualitative Report from August. It includes a wealth of interview quotes; everything the study participants were willing to tell the ANA under condition of anonymity. Together, these reports are real eye-openers.

These reports tell us quite definitively that information asymmetries (or “knowledge gaps,” which is a bit more succinct) are causing advertisers to unknowingly pour their budgets into lousy bidding environments, inventory, and audiences, not because they have access to bad information, but because they simply don’t know what information to ask for in the first place.

I want to dive into what’s gotten us here on a first-principles basis, as I find the topic fascinating (in fact, I explored “knowledge asymmetries” just a few weeks ago on The AdPod before the ANA report was released).

Reactive tactics are important too, but until you understand a few fundamental truths, you won’t understand what makes digital media so dangerous when you find yourself on the wrong side of an information asymmetry.

Specifically, I’m going to explore three principles:

1. Information asymmetries and lies are not the same thing
2. There’s no referee in digital
3. You’re not buying a commodity product

Information Asymmetries and Lies Are Not the Same Thing

Many information asymmetries are not powered by lies but by omission.

If someone is making money off information you don’t have, not only are they disincentivized from giving you that information, they won’t even tell you it exists. And this is convenient because they can profit from the asymmetry without ever telling a lie or doing anything out of the ordinary from your perspective.

Consider MFA inventory: sellers of such inventory are never going to voluntarily add extra fields to their impression reports showing how many other ad placements were simultaneously loaded on the page, or how many ad placements didn’t meet viewability standards.

Such fields would add a great deal more context as to what the ‘Impressions’ reporting field actually means. But no, it’s more convenient to omit those other reporting fields and let the advertiser or their agency do a lot of extra homework for themselves (or enlist an attention metrics vendor).

Digital media is filled with such gotchas. It’s a real jungle out there.

There’s No Referee in Digital

Whether we realize it or not, we all carry around with us the nearly 30-year-old assumption that digital media is more rules-based and controllable than the “fuzzy” broadcast and physical media of yesteryear (e.g., radio and magazines).

However, thinking that digital media is inherently rules-based is an assumption that can get you into trouble because there is no referee enforcing these supposed rules.

The programmatic supply chain is so immense, diffuse, and complex that no one is “minding the store.”

Here’s an example:

The ANA report recommends that advertisers and buyers use inclusion lists instead of exclusion lists. The inferiority of exclusion lists is obvious once you know just one thing:

However fast you can spot bad publishers in your reports and exclude them, shady operators can launch new garbage sites and plug them into the programmatic supply chain 100x faster. You will never, ever be able to outrun bad actors.

Also, an ecosystem full of information asymmetries disincentivizes very many people from telling you this fact.

Case in point: the “website reduction” experience of JPMorgan Chase in 2017 as noted in the ANA report. The company was running ads on 400,000 separate sites and subsequently saw zero drop in performance after reducing that to an inclusion list of only 4,000 sites.

400,000 sites! If anyone along the food chain was minding the store, might they have raised their hand when JPMorgan Chase crossed the 100,000 site milestone, let alone 200,000 or 300,000?

If JPMorgan Chase left things on autopilot, how many sites might they have been allowed to spend across? Four million? Four billion?

In digital, there’s no referee who’s going to step in, so use inclusion lists and make sure the field of play is small enough that you can see the whole thing yourself.

You’re Not Buying a Commodity Product

This last principle is simple: the industry-standard nature of terms like “impressions” and “users” implies that these are universally-standardized commodities; that they are like eggs or barrels of oil.

Nothing could be further from the truth. An impression could be a bot loading an MFA site or it could be a high-net-worth executive loading the homepage of The Wall Street Journal.

When advertising broke the constraints of broadcast and physical media, it essentially entered the limitless world of the might-not-be-real.

That user? They might be a real human doing normal human stuff. They also might not. That click? Might be a real human genuinely interested in an ad, and it might be a real human fat-fingering a CLOSE button.

The industry has made valiant attempts (some successful; some not) to bring about standardization, but even the most rigorous standards can be thwarted and can even become a hiding place for bad actors who cloak themselves in the language of standardization.

This doesn’t mean that basic metrics like impressions deserve to be thrown out. Obviously, advertisers need ways of measuring audience reach. And obviously, genuine industry standards help a great deal.

Instead, what this means is not allowing garbage to “hide” inside ad budgets just because that garbage happens to use the same words to label its reporting fields as the legit stuff. Digital media is not a commodity and the terms we use every day have little intrinsic meaning aside from being industry shorthand.

Go Read the Report

That’s all I have to say for now. But go read the ANA report. If you’re on the buy side, get educated so you can begin asking the questions it recommends. If you’re on the sell side, get educated so you can begin answering those questions, because I expect this report will keep the industry talking into 2024 and beyond.

The post Information Asymmetries in Digital Media Will Eat You Alive. If You Let Them. appeared first on AdMonsters.

While there have been some positive developments, as highlighted in a recent study by the ANA’s Alliance for Inclusive and Multicultural Marketing (AIMM) in collaboration with MAVEN/Media Framework, LGBTQ ad spend nearly doubled from 2020 to 2022, reaching $15 million. However, there is still room for improvement. 

Exactly one year ago, we delved into the challenges faced by LGBTQ publishers, including the issue of keyword blocklists, which often block advertisers from reaching diverse audiences. We also shed light on the bright side, showcasing ad tech vendors who support LGBTQ publishers.

Today we revisit this topic by consulting industry experts to gauge whether these challenges persist. Unfortunately, our findings reveal that these issues are far from resolved. We caught up with Nandini Jammi, co-founder at Check My Ads Institute, Chris Kenna, CEO and Founder of Brand Advance Group, and Michael Kelley, Chair and President of Growth/Development at equalpride.com.

Jammi was our primary source in our research last year, and according to her, the hate groups are having their way this year.

Hate Group Success Scares Marketers Off 

You read it right, in 2023 hate groups are still thriving. These hate groups and outlets make a full-time job out of engaging in hateful theatrics geared toward the LGBTQ+ community. 

“Hate groups have been building out disturbing narratives around the LGBTQ+ community for years,” Jammi explains. “And this year, they decided to focus their attention on big brands, specifically ones with brick-and-mortar stores. Target, Kohl’s, and North Face faced harassment online but had to contend with the physical threat of violence in their stores. This year is uniquely violent, and I can understand how they successfully spooked marketing executives who normally wouldn’t think twice about openly celebrating Pride.”

Jammi predicts we will see a lot of internal reflection in the next 12 months as corporate marketers assess what’s happening. 

The Rocky Road of Navigating LGBTQ+ Ad Spend 

Chris Kenna reassured us that 2022 – 2023 has been a challenging year for LGBTQ+ community and media. 

“The implementation of Brand Safety and Brand Suitability settings such as GARM which has a social issues setting allows brands to block 95% of LGBTQ+ media if they put this setting too high,” Kenna says. “Most LGBTQ+ issues are social issues. It’s imperative that when a brand and their agency wishes to support the community they adjust what they deem to be brand suitable. This will ensure as much budget is spent in that community’s ecosystem.”

He advises brands and agencies to use single person assets or product assets if they don’t want to produce an LGBTQ+ campaign to run in the communities direct media. 

On the Bright Side 

When asked about ad spend challenges at equalpride.com, America’s #1 media voice for the LGBTQ+ community, Kelley mentioned programmatic, social media, and performance-based advertising methods as challenges. It seems with these methods the intended messages get misconstrued.

“While these methods may deliver intended audiences at scale, they also deliver unintended audiences, the minority of which are lying in wait to weaponize the diverse intentions against the brands and destroy reputations and brand equity,” Kelley explains. 

Kelley reassures brands that they do not have to spend an arm and a leg to reach LGBTQ+ audiences if they invest in the community each year. 

“Brands consistently spending with minority media are reaping the very simple benefit of love and loyalty in return for showing love to the LGBTQ+ community. LGBTQ+ audience numbers are as high as 40m Americans and 2.4 trillion in household spend. We are recession proof,” says Kelley. 

The post LGBTQIA Publishers Continue to Face Ad Spend Inequality appeared first on AdMonsters.

Brands are being cautious with their ad spend right now. Amid a recession, they are worried about their revenue gain as inflation takes its course. On the other hand, consumers are still spending money. While they are allocating more funds to non-discretionary spending, discretionary spending is still rising. 

Inflation is not keeping consumers from spending money, and brands should take notes. 

“If consumer spending is still strong in their category, now is not a good time to cut ad spend,” said  Nick Mangiapane, CMO and Head of Partnerships at Commerce Signals, a TransUnion Company. 

TransUnion discusses this in their survey, Consumer Spending Remains Strong as Headwinds Build. Inflation may be at an all-time high, but Consumers are still spending and pushing the economy forward. How much longer the consumer can keep up their spending power is up for debate, but advertisers can play a role in assisting them. 

Non-discretionary V. Discretionary Spending 

Last year, consumer discretionary spending was slowing down. While the rate was not decreasing, economists were unsure how long the trend would last. In a shocking turn of events, the data shows that consumer discretionary purchases and spending have shown signs of growth in 2023. 

While some may infer that increased inflation meant less consumer spending, last year, the data showed that consumer card spending increased by 14.6% in July. Due to the strong job market and the high consumer saving rate during the pandemic, consumer spending has stayed above inflation. Although, as the market effects of COVID-19 waned away, consumer habits changed.  

For instance, inflation forced consumers to distribute much of their revenue to non-discretionary segments such as food, gas, rent, and utilities. While discretionary spending slowed, the spending is still strong. 

In January and February of this year, there was an uptick in discretionary spending, specifically in the travel industry. Consumer spending continues to remain strong in both non-discretionary and discretionary categories.  

“Discretionary spending through February is up 12.3% year over year, so while growth may slow, there is still a long way to go before it becomes negative,” said Mangiapane. 

The news is good for now, but economists had contrasting views on how much longer discretionary spending will grow: 

• JPMorgan Chase & Co. Chief Executive Jamie Dimon said U.S. consumers have about six to nine months of spending power left. 
• Bank of America Corp. CEO Brian Moynihan asserted that other than gasoline, consumer spending was higher than inflation, and he believes the trend will continue. 
  • “The spending is strong, and then customers have more money in their accounts than they did pre-pandemic by multiples,” Mr. Moynihan said. “They’ve got plenty of money to spend.”

Trading Down and the Flourishing Travel Industry

Last year, consumers implemented a trading down strategy to compensate for the high prices. This included continued spending on high-priority discretionary categories and cutting back on lower-priority discretionary categories. In the packaged goods industry, consumer purchases increased by 3.4%, while food prices were up by 10.4%. The caveat was that consumers purchase cheaper items like burgers instead of steak. 

                                                                                                                                  Source: Commerce Signals’ Spend Analytics Suite

In 2023, the high spending rate in the travel industry was vital for the uptick of discretionary spending. Travel spending saw the highest growth, with an increase of 34.5%. The number of consumer transactions also increased at a rate of 21.3%, highlighting that consumers are traveling more than they were a year ago. Evidence highlights that the increase is due to higher average ticket prices directly influenced by inflation, but purchases were still up. Is it because the pandemic trapped consumers inside their homes? 

With travel bans implemented worldwide during the pandemic, disaster struck the travel industry. Christine Maguire, VP Of Global Ad Revenue at TripAdvisor, said that while the trip planning company had a tough time, their business needed data and revenue to weather the storm. 

“In reaction to the pandemic’s impact on the economy, specifically our business, we had to go into action mode to weather the uncertain storm immediately,” said Maguire. “After being in hyper-growth mode to maximize the media business, I had to put my finance and operations hat on quickly to manage costs, reimagine a streamlined and consolidated global organization, while managing the changing dynamics in the marketplace due to the pandemic.”

Last year, the travel industry bounced back due to their tenacity, innovation, and the consumers’ eagerness to travel once federal governments started to lift travel bans. This year the travel industry is continuing that growth. The transportation category, which includes cruises, ride-sharing, taxis, and trains, had the highest increase in spending at 79.6%. Airline spending also started the year very strong, with a growth of 50.3%. 

Don’t Reduce Your Ad Spend

During inflation, advertisers might want to decrease their ad spend budget, but the data urges you to do the opposite. You must increase your ad spend budget to encourage consumers to keep spending. 

Economic uncertainty causes some to decrease their ad budget, but most industry experts will agree that it is a disastrous move for both brands and consumers. Brand exposure, brand prominence, and audience targeting will decrease. 

“As a marketing leader, I’m very familiar with leadership requesting marketing budget cuts,” said Mangiapane. “However, cutting budgets expecting lower revenue can be a self-fulfilling prophecy in times like this. Advertisers with reliable incremental sales studies will easily defend their budgets.”

The post Consumer Spend Is Sky High Despite Inflation, So Why Isn’t Ad Spend? appeared first on AdMonsters.