With advances happening daily in the AI space and data analytics improving, programmatic advertising has grown increasingly sophisticated, enabling much more personalized ads that have improved the return for advertisers and brands across the industry. According to eMarketer, in 2022, ads bought programmatically accounted for 84% of global digital advertising spending, and the share is forecast to increase to 87% by 2026.
However, the tactic now faces questioning and criticism over privacy concerns, and global regulations and consumer demand for privacy-conscious approaches are forcing change. Today, traditional programmatic methods that rely on third-party cookies for user tracking and personalized ad targeting are being phased out due to these regulations, which are led by industry giants like Apple and Google. As a result, the industry as a whole is shifting toward privacy-first strategies like contextual advertising, which targets ads based on the content of a webpage, rather than personal data.
One reason contextual targeting is growing in popularity so quickly is because it doesn’t rely on third-party cookies or unique identifiers to serve relevant content. Instead, it uses signals such as images, audio, location, time of day, etc. to match relevant content. Advances in AI and machine learning technology have significantly improved the depth of contextual signals that can be captured and targeted, ultimately leading to more effective and relevant advertising. A recent survey on post-cookie measurement conducted by DoubleVerify found that 94% of brands and advertisers are planning to rely on contextual targeting. Once the cookie is finally gone, the biggest challenge for advertisers is that there is no one-size-fits-all solution. Many brands and advertisers have identified components and areas to improve upon and are gearing up for that, but no one is completely clear on how exactly it will come together.
One thing is for certain: Programmatic advertising is not going anywhere. In fact, it can be argued it is only growing. According to GlobeNewswire, the global programmatic advertising market grew from $7.31 billion in 2022 to $8.87 billion in 2023 at a compound annual growth rate (CAGR) of 21.4%. What’s more, the market is forecast to continue its impressive growth and reach $19.12 billion by 2027, at a CAGR of 21.2%. These figures reflect an ecosystem that is adapting to change well and is confident in its privacy-first future.