The future of programmatic advertising

Over the past ten years, programmatic advertising has become the cornerstone of most online media strategies. By harvesting data, advertisers have been able to provide personalised messaging, which is more relevant to the user, and therefore more lucrative for both the advertiser and the publisher. The sheer volume of data companies could access allowed them to dynamically tailor their messaging to be more relevant to users than ever, with ads adapting in response to demographics, locations, devices, the time of day, and even the weather.

But recent regulation has limited the ability of publishers and advertisers to harvest and use this data, and it looks like increasingly strict laws are set to turn the industry on its head. So, just what does the future hold for programmatic advertising? In this article, I’ll explore a few of the potential outcomes we could see over the next few years.

The regulatory squeeze is starting to take effect

Data is the key to success for any programmatic campaign, and the raft of data protection legislation we’ve seen of late — such as GDPR — could be about to make customised advertising much trickier. It’s certainly true that, within the EU at least, there has been an intense regulatory squeeze on companies holding personal data. Companies that were able to freely harvest user data without consequence are now facing a regulatory roadblock that prevents most essential information from being used.

There will inevitably be work-arounds, which at the minute seem to be intrusive cookie acceptance notices, but I’d imagine over time (especially within the EU) it will become even harder to harvest so much user data. In my view, programmatic practices need to adapt to new technologies that will completely change the fundamental model of what programmatic advertising is. Otherwise, I think there is a finite amount of time left for it continue to provide value for advertisers in its current state, especially in the EU.

New tech could give users greater control of their personal data

Starved of the data that is so essential to an effective programmatic campaign, I expect that advertisers will need to use new technology to engage users in a different way. I believe the next evolution in the space will see companies allow users to own, use and monetise their personal data: people will be given control over how — and when— they are advertised to. As a result, both advertisers and publishers will need to work harder to earn their engagement.

We’re already seeing of lot of this sort of innovation coming out of the blockchain and crypto-currency space, with new browsers that allow users to control their privacy and accept advertisement at their discretion. Users could even start paying publishers directly for viewing their content via cryptocurrency.

Cryptocurrency will play a crucial role

One example of the new role of cryptocurrency in advertising is the Brave browser, from the developers behind JavaScript and Mozilla. Brave strips the ads out of sites, allowing the user an ad-free browsing experience. But, it also incentivises them to engage with advertising by offering them a chance to earn a form of cryptocurrency if they choose to be shown ads, which they can then spend on voting for their favourite publishers.

The model offered by the Brave browser is still controversial — understandably, not all publishers are too pleased with the idea of having their ads removed and replaced with ones that drive revenue for Brave. But nonetheless, it certainly represents a shift in the role of the user. With traditional programmatic advertising, users take a passive role, having little say in what data is harvested and how it is used. But with a business model like the one offered by Brave, users have better control over their data, and advertisers are — to an extent — forced to respect their privacy.

Web monetisation

The other piece of technology that I think has the potential to seriously disrupt the space is web monetisation, which has been built into W3C standards using tech called the Interledger Protocol (ILP). It essentially allows for the real-time streaming of micro-payments in the form of cryptocurrency, transferred from the user to the site they’re visiting, as opposed to viewing advertising.

Companies like Coil and Puma Browser are examples of businesses that are building the groundwork for this technology. Much like Brave browser, they claim to champion the privacy of the user, and offer a browsing experience without ads or tracking.

I think programmatic advertising is unlikely to survive in its current form, and companies must turn to new technologies if they want to engage users and continue to profit from ads. Looking to the future, I expect that cryptocurrency and pay-to-surf business models will become much more prevalent, disrupting the traditional relationship between users, advertisers, and publishers.

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