In this two-part post, Per Pettersen, founder and CEO of Impact Radius (and former co-founder of Commission Junction) highlights Six Key Trends that are likely to affect the performance and brand advertising markets in 2014.
If you missed Part 1, click here. For the rest of you, let’s move on to Part 2 . . .
4. Attribution will still be a priority
Advertisers will continue to invest in gaining a better understanding of the value of each touch point in their consumers' journey. Advertisers will start to question view-through attribution and want to ensure they are paying for real, actually viewed ad impressions. Overall the trend will be toward higher accountability and toward more rational, value-based pricing. That said, there won’t be a revolution here, and advertisers will still spend billions on highly questionable display inventory.
5. Direct relationships will be a focus for brands and publishers
On the supply side, publishers will invest in SSPs and private marketplaces, while focusing on innovating with native advertising formats. Publishers will strive to wrestle control of their inventory away from exchanges and networks by providing better targeting and profiling within their own platforms. This is evidenced by a majority of publishers, as 60 percent plan to increase participation in private marketplaces and SSPs.
On the performance side of the equation, big performance publishers or “affiliates” will demand that intermediaries such as affiliate networks take a smaller cut as they are looking for ways to grow their margin. Advertisers will increasingly see the value in going direct for both display and performance channels as well.
6. Video advertising will continue to surge
We are truly in the middle of a revolution as to how video content is consumed. YouTube is now the largest “TV network” for young adults, with more than one billion unique visitors per month. This traffic has translated into tremendous advertising revenues, with YouTube seeing $1.96B in global digital ad revenue in 2013.
Interestingly, video is growing fast on mobile as well, and that should accelerate with 4G adoption. In the case of YouTube, 40 percent of overall traffic now comes from mobile devices, up 15 percent from January 2013.
Other online video content providers such as Netflix are experiencing similar transitions to mobile viewership. With 23 percent of their subscribers having watched on smartphones and 15 percent on iPads, Netflix typifies the shift to mobile video, illustrating the importance of mobile-based platform marketing strategies for video content. In incentivized mobile traffic, leaders such as TapJoy are reporting staggering growth of watching videos as a means for earning points.
The growth is driven by changes in consumer behavior, with social sharing of videos taking off, but also by innovation in ad formats to get even more creative in ways of engaging consumers.
The Six Key Trends profiled here bear close watching within the performance and brand advertising communities. Taken together, they reveal the vibrancy and innovation that are driving our industry today.