Programmatic Trends: Forecast for Q4

The adtech world is full of excitement and anticipation as we enter the fourth quarter of the year. Programmatic advertising is the powerhouse of modern marketing. It is poised to continue its constant evolution. In this article, we analyze the leading trends for the adtech industry and try to understand what to expect in the next quarter.

The fourth quarter of 2023 holds great promise and intrigue in the rapidly evolving landscape of programmatic advertising. Despite global uncertainties, the resilience of the industry shows through, preparing for solid expansion. Meanwhile, sustainability initiatives and environmental awareness continue to shape the industry, encouraging a greener and more responsible approach to advertising practices. As the industry rises above the landscapes of video, audio, CTV, and gaming advertising, staying at the forefront of innovation is key to unlocking its potential. 

Will Q4 be the turning point for programmatic?

The global programmatic advertising market has shown remarkable growth, rising from $7.31 billion in 2022 to $8.87 billion in 2023, representing a remarkable annual growth rate (CAGR) of 21.4%. However, the geopolitical situation has disrupted the prospects for global economic recovery from the COVID-19 pandemic, at least in the short term. It has resulted in economic sanctions against several countries, a spike in commodity prices, supply chain disruptions, and resulting inflation in goods and services. These ripple effects have impacted various markets around the world.

However, the programmatic advertising market is resilient. It is ready for continued expansion. It is expected to reach a substantial size of $19.12 billion by 2027. In the face of global challenges, programmatic advertising remains a beacon of growth and innovation, adapting to changing circumstances and emerging as a key player in the evolution of the advertising industry.

Consequently, our team believes that the industry will continue to grow in Q4 and will not be hindered by external factors. Despite the potential upside, we consider it important to look at the trends that the programmatic industry will face in the next 3 months.

Leading Ad Format: Battle Between Video and Audio

The programmatic advertising arena is currently a fierce battle for supremacy between video and audio formats. These two titans have been locked in a year-long battle. And the fourth quarter promises no respite.

The industry continues to be stunned by research into the power of the two formats. It seemed that video had proven to be fully effective, beyond the reach of other formats.

But, the impact of audio format on the industry is undeniable. Studies by Dentsu and Lumen revealed its potency with longer attentive seconds, higher brand recall, and impressive brand choice uplift, setting a new standard for advertising effectiveness.

Video advertising, known for its visual appeal and storytelling power, has captivated audiences and advertisers. Demand for programmatic video advertising is exploding as marketers capitalize on its ability to engage and convert viewers.

Who will win this battle? We will see very soon. Our team's opinion is that the video format will be the winner.

Connected TV Programmatic Advertising 

Connected TV (CTV) is quickly becoming the crown jewel of programmatic advertising. According to Insider Intelligence, a staggering 87% of CTV ad inventory will be transacted programmatically in 2023, including through programmatic guaranteed deals. This figure is expected to rise to 89% within the next two years, according to Paul Verna, principal analyst and the Head of Insider's advertising and media practice.

However, it's important to note that programmatic CTV faces challenges, particularly fragmentation, making it difficult for advertisers to seamlessly access their target audiences. Nevertheless, CTV remains a promising technology that offers marketers a dynamic and engaging platform for their campaigns.

Rapid Rise of In-Game Advertising

This emerging trend, while nascent, is quickly gaining traction. It's a relatively new concept, with the programmatic aspect being particularly disruptive. The emergence of 5G technology has been a catalyst for this trend, but significant efforts are needed to identify high-return segments and to develop new targeting and viewability metrics. 

As the fourth quarter approaches, the gaming industry is proving to be an exciting and powerful channel for connecting with audiences during key events such as Back To School, Black Friday/Cyber Monday, and the run-up to Christmas. 

Sustainability and Environmental Awareness

The dynamics of programmatic advertising are closely tied to broader market trends that profoundly impact business strategies. Companies are embracing sustainability and environmental awareness in response to heightened global environmental concerns.

Sustainability in advertising in Q4 is on the rise, with initiatives like AdGreen, a UK-based nonprofit, expanding its carbon calculator for creative production. Additionally, nonprofits like Isla provide valuable tools like TRACE, which tracks emissions from events. The World Federation of Advertisers' GARM has also introduced a "Sustainability Quick Action Guide" to promote eco-friendly media planning and buying practices, highlighting the industry's commitment to a greener future.

Embrace the trends, harness the drivers, and overcome the obstacles — Q4 is eagerly awaiting the adtech enthusiast in all of us.