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Global digital ad spending is expected to grow to 517 billion by 2023, nearly doubling the ad spend reported in 2018.

The competition is growing fast and in many cases it is nuance that decides ad performance.

This article discusses the biggest online advertising trends to keep in mind in 2020:

1. Programmatic Advertising

Most of the marketers use artificial intelligence (AI) to automate ad buying this year. It is a great tool created to replace human negotiations with AI-optimisation and machine learning.

These ads help businesses target specific audiences and buy advertising in real-time without having to negotiate or preset prices.

There are several programmatic deal types:

  • Preferred deals: These deals are made between publishers and specific buyers. Advertisers choose ad inventory at a fixed price and they can use DSP to understand their target markets. This allows them to determine whether they should purchase ad impressions or not.
  • Real-time bidding: Marketers also call this deal open auction or open marketplace because the ads are unreserved. The ad slots are sold in real-time through an open auction where the person who places higher bid gets the spot.
  • Private marketplaces: These auctions are exclusive and they are available to advertisers who receive invites only. Businesses use premium ad inventory and these ads are mostly used by websites that have mass reach.
  • Programmatic direct: It follows the traditional approach of media buying where publishers and advertisers negotiate the terms. These deals are preferred by businesses that know precisely where to place their ads and have strong budgets.

According to eMarketer, the programmatic digital ad spending in the US will reach $81.00 billion by 2021.

display ad spending

[Source: eMarketer]

2. Video Advertising

According to Statista, by 2024:

  • Video ad spending on mobile will reach $24.264.6 million
  • Desktop ad spending will increase up to $10.806.4 million

For most of the marketers (87%), video advertising is still the top marketing medium.

The growing usage of mobile devices has caused many types of marketing campaigns to cease to be in usage. And long-form content like long landing pages and email newsletters are difficult to consume on smartphone screens.

This is where video formats come quite handy. They are not only entertaining and grab the users’ attention, but they also help businesses convey their message successfully across different platforms.

A survey by Animoto reveals that 63% of businesses claim that video content brings the highest return on investment (ROI). In fact, 93% of them say they’ve made new customers thanks to video on social media.

video advertising stats for desktop and mobile

[Source: Statista]

3. Personalized Advertising

To stand out in 2020, marketers use online user data to target audiences with more relevant advertising content. In other words, they focus on users’ demographics, interests and similar personal data to successfully reach potential clients and sell their services.

Personalized advertising is a powerful tool because it increases ad relevance, improves user experience and boosts ROI.

As stated by SmarterHQ, 72% of buyers say that they only engage with marketing messages tailored to their interests.

And they are willing to share their personal data to receive:

  • Exclusive discounts (90%)
  • Alerts for back-in-stock products (85%)
  • Recommendations (82%)

sharing data

[Source: SmarterHQ]

Many brands incorporate personalized advertising to strengthen their customer loyalty and increase their sales. For instance, using this tool, Starbucks grew its reward membership program to 14.2 million and its revenue skyrocketed to $2.56 billion.

4. Contextual Targeting

According to VIEO Design, users don’t hate ads; they hate bad ads. And 91% of them even say that now ads are more disturbing than 2-3 years ago.

One of the primary reasons for this annoyance is the lack of relevancy.

However, with paid advertising, businesses can only enhance their marketing campaigns by making sure they appear in the right place and at the right time.

Contextual targeting is a form of personalized advertising that enables PPC ads to show up on relevant sites. This is great for business promotion because it allows brands to advertise their products or services in a natural way.

By creating a customized link between what they offer and what their target audiences search for, they increase ad relevance while improving engagement and leads potential.

When using this tool, these types of ads will display when they match:

  • Specific keywords
  • Location
  • Browsing habits
  • Taxonomy topics
  • Sentimentality

The best part about this trend is that it is privacy-friendly since the advertisements show based on keyword and content match, not customer data.

5. Gen Z Targeting 

In 2020, more and more marketers will focus on capturing Gen Z’s attention. However, reaching them successfully is a key challenge.

They’ve never known a world without the internet so they have different expectations for technology and expect instant information accessibility, unlike other generations.

They want personalization, transparency and frictionless experiences.

Mobile devices will be of key importance to this strategy because people aged 22 and younger are more likely to consume content via tablets and smartphones. This is why brands should ensure creating content and ads that will work perfectly on mobile platforms.

A survey by RRD shows that the top five social media channels where this generation is active the most are:

  • Facebook
  • Instagram
  • Snapchat
  • Twitter
  • Pinterest

millenials vs gen z

[Source: RRD]

In addition, compared to millennials, when it comes to receiving promotional messages, Gen Z is:

  • 22% more likely to prefer in-app notifications
  • 23% more likely to prefer social media

gen z and notifications

[Source: RRD]

These facts make multichannel marketing and mobile advertising inevitable for Gen Z targeting.

6. Social Advertising

Considering the fact that there are 3.81 billion monthly active social media users worldwide, social advertising still remains one of the biggest trends among marketers.

The options related to social ads are endless and undoubtedly, there is an audience for any type of business out there.

What makes these types of advertisements great is the fact that brands can easily target their audiences based on their interests and demographics.

However, no matter what platform and types of ads they choose, businesses should definitely focus on video and interactive content to grab the audiences’ attention and engage them.

social media use around the world

[Source: DataReportal]

7. Instagram Shopping Post Advertising

Based on Instagram Internal Data 2019, 130 million accounts tap on a shopping post within the platform every month to discover more about products.

This tool is one of the biggest trends among sellers this year and it shows great potential for advertising. It allows businesses to tag their products directly in their posts so that prospective buyers can easily discover prices and engage.

Advertisers can easily create these types of ads in Instagram Ads Manager and once users want to complete their purchase they will be redirected to the mobile website.

instagram shopping example

[Source: This Is Whistles via Instagram]

8. Mobile Advertising

Last year mobile accounted for half of the internet traffic and the number is expected to grow. Most of the users now spend significant time browsing and shopping on their smartphones.

Brands should use this opportunity and make sure their websites, content and advertisements are mobile-ready.

This trend has affected almost every part of digital marketing. For example, now most of the video marketing companies create vertical videos to fit mobile formats and provide users with a smooth viewing experience.

In 2019, over $190 billion were spent on mobile ads worldwide and the number is projected to grow this year. (Statista)

Final Thoughts

The future of promoting products and services is online advertising. However, in a world where consumers pay less attention to ads than ever before, it is of key importance for marketers to follow the latest trends and create relevant campaigns.

By doing so, they can stay up-to-date with what actually works and engage their prospects successfully.