The year ahead for Ad Tech, by Huawei Ads’ Kashmala Khan

Digital advertising will revolve around diversification, automation, first-party data, in-app advertising and contextual targeting, writes Huawei Ads’ head of advertising, demand solutions Kashmala Khan.

Witnessing two years of unprecedented disruption globally, it may seem vague to predict the future of ad tech. However, while the pandemic has caused inconvenience for many industries, digital advertising has only evolved to address changing consumer behaviour. The global disruption has encouraged the ad tech industry to enter a favourable period of innovation, enabling us to adapt quickly to the change in the consumer journey induced by the pandemic.

Moving ahead to 2022, there will be several digital solutions based on different technical specifications and business models that will leave publishers, brands, agencies and tech platforms confused as to which one
to choose.

Based on my industry experience, I envision the following trends and technologies developing in 2022:

Transformation of the ad tech ecosystem

2022 will bring multiple innovative digital advertising solutions and will also see many adtech companies merge whilst audience platforms rise, which will consolidate the industry and help with the commoditisation of ad tech. Many platforms may employ ad tech and martech to provide a holistic service
to advertisers.

With audience intelligence platforms on the rise, publishers will gravitate towards first-party data

Advertisers will lean towards first-party data due to strict privacy laws and gravitate towards audience platforms. By incorporating their databases with rich and unique first-party data by publishers, marketers will effectively reach their audience. This system will create a divide between industry players: between those that are data-rich and those that are data-poor. Advertisers will additionally witness a rise in contextual advertising,
as an alternative to first-party data.

Programmatic advertising will trend

Employing machine learning and algorithms, programmatic advertising will automate buying, displaying, and optimising advertising space. As per the stats, programmatic advertising dominates digital advertising across major regions, including China, Europe and the US. According to IAB GCC, the programmatic adoption in the region is only 20 per cent, indicating ample room for growth.

Outcome-based advertising – achieving more with less

With greater efficiencies in targeting and tracking from demand-side platforms (DSPs), advertisers will continue to strive to get the best out of their budgets. Advertisers will spend in measurable and profitable marketing acquisition channels and allocate investments on platforms that drive the highest ROI. This approach will also help focus on quality interactions while creating awareness at the top of the funnel to drive more conversions. However, advertisers shouldn’t underestimate the effectiveness of a creative branding campaign.

Diversification of digital advertising channels

The risk of failing to diversify in marketing or advertising is similar. Betting heavily on a single channel or idea can cost companies a lot of money with little return. Many people rely heavily on advertising in ‘gated community’ networks, devoting all or the majority of their advertising budget to one or more of these platforms.

A holistic, integrated approach is the most effective way to reach new customers and prospects, engage existing customers, and increase revenue. There is no one-size-fits-all solution or a failsafe playbook for marketers to decide on how to allocate their advertising dollars between walled gardens, search and the open internet. They should allocate their ad budget depending on their customer life cycle campaign, and support their advertising objectives. As an example, native placements across the Huawei device ecosystem are one of the most cost-effective ways to reach, engage and convert new potential customers.

‘Mobile-first’ ad campaigns

Most consumers use their smartphones for shopping, browsing, and entertainment. This habit has seen an increase during stay-at-home advisories and country lockdowns. As a result, brands have ensured that their campaigns are optimised for mobile phones. For instance, most videos are now filmed in an upright position to create a vertical video. That’s because the vertical format is perfect for mobile viewing. This trend will likely be carried on to 2022.

In-app advertising – the new front of digital advertising

According to App Annie’s forecast, the number of mobile app installs will reach 258 billion by 2022, indicating an increase of 45 per cent compared with the total mobile downloads of 204 billion in 2019. It means that, on average, a person now has more than 80 apps installed on their smartphone. So, in the coming years, app marketers have a massive potential to reach billions of users as the MENA region is yet to experience a growth in mobile users.

The fact is that the ad tech industry is ever-evolving; what works today might not work in the future. Therefore, the best way forward for digital advertisers is to experiment and keep learning. Try one approach at a time, analyse results and repeat.

Only flexible and adaptable advertisers will grow on this digital front because things can change completely overnight with every new algorithm. So expect the unexpected, adapt to the strategies as necessary, and stay one step ahead in the game.