2023 -24 witnessed significant AI domination in ads, and one of the most-watched ads was Gary’s and Barry’s peanut butter, the world’s first AI-generated ad. Programmatic advertising trends 2024 and beyond will witness increased usage of AI in programmatic advertising.
The power of AI in programmatic advertising is evident in the ad, which targets its audience bang-on without intruding on user privacy. Advertisers and publishers can sigh in relief for the perfect cookie-less solution, and no longer need to worry about issues related to privacy and data in programmatic advertising.
According to a McKinsey report, AI will play a significant role in deploying data-driven advertising strategies in digital advertising in 2025, with AI-generated ad values exceeding $4.4 trillion annually worldwide.
Paragon has analyzed seven trends to watch out for in 2025:
1. Political ad spending to hit astronomical heights
Did you know that according to STATISTA, global ad spending can go up to $989.8 billion by the end of 2024? What’s more, the figure could exceed $1 billion in 2025. A great example is the 2024 US presidential contest, which is expected to touch record heights in ad spending.
A recent news report in The Guardian featured a study by Group M that indicates a whopping $15.9 billion will be spent on the election exercise, a sharp increase of 30% compared to the ad expenses in the 2020 presidential elections.
According to the same news report, this makes the U.S. political advertising market the tenth-largest in the world—more significant than several countries’ total ad budgets.
Although a significant portion of the political ad spending will be allotted to TV ads, programmatic ad-buying innovations herald good news for ad professionals. A substantial portion of the political spending budget will go to digital advertising, with AI playing a crucial role in the exercise.
2. Addressable TV Audience
With traditional TV viewership falling, advertisers are focusing on OTT (Prime Videos, Netflix, Disney+, etc.) to reach their target audiences. With CTV programmatic advertising, advertising professionals can easily target audiences via addressable TV. The USP in addressable TV is that advertisers show different ads to households who watch the same program simultaneously.
Thanks to programmatic ad automation tools, ad spending on addressable TV has doubled in two years. With 40% of the advertisers claiming they will spend more on addressable TV, programmatic advertising trends 2024 show an optimistic upward swing.
Although privacy and data in programmatic advertising play critical roles, trade industry watchdog Go Addressable predicts an average of 68 billion monthly advertising minutes, a 29% increase on 2022 figures.
3. Virtual Reality and Augmented Reality
Brands will rely more on VR/AR to reach their target audiences. They can help advertisers create distinctive and unforgettable experiences. Facebook will soon support AR ads, and ordering your favorite pizza from Domino’s using Snapchat’s AR is child’s play today. One of the most popular programmatic advertising trends, 2024, is Shopify offering its business partners a chance to indulge in immersive shopping experiences using Shopify AR.
Businesses can now use this unique technology to present practical, interactive versions of their products. AR empowers businesses to turn any environment into a swanky showroom using Android or iOS. When shoppers get an idea of the actual size, scale and feel of the products, the experience is unforgettable. Leading brands like Spikeball, NOMATIC, Bethesda store, HORNE, etc. are already using Shopify AR.
Thanks to AI in programmatic advertising, the VR ad market is all set to generate $174 billion by the end of 2024 in revenues. IKEA’s virtual reality kitchen is already making waves with its virtual shopping experiences.
Some other ways advertisers can use such programmatic advertising trends 2024:
- Offering VR tours of hotels and convention halls
- Allowing viewers to visualize products from the comfort of their homes
- Enabling users to test any product using interactive installations
- Develop branded games based on AR
4. Advances in AI and Automation
With AI and automation revolutionizing digital marketing, advertisers are revamping strategies using cutting-edge tools to enhance customer experiences. Platforms can now use AI to analyze consumer data at unmatched scales, customizing messages and prompts with uncanny accuracy.
Programmatic advertising trends, 2024, include advanced tools like Einstein 1 Platform from Salesforce help revise strategies by offering never-before customer experiences. Such AI-driven platforms swiftly analyze consumer data at fantastic scales, and can precisely customize recommendations and messages for specific audiences.
With significant productivity gains from such advancements, thanks to innovative programmatic ad automation tools, what stands out distinctly is the uncanny ability of AI in automating routine, repetitive tasks, analyze huge volumes of data, and generate engaging content, allowing advertisers and their teams to focus on core competencies.
According to Diana Zheng, Head of Marketing at Stallion Express, AI and programmatic advertising are closely connected, and enhance efficiency to ensure unforgettable customer experiences.
Rapid strides in AI can help enhance personalization and create better content. AI algorithms are proficient in creating compelling content, and its predictive analytics are accurate, helping marketers gauge customer behavior, needs and trends correctly.
5. A Cookie-less Future
With privacy issues still being a thorn in the flesh for advertisers, the solution to a cookie-less future is here. Customers can now opt for browsers that don’t support third-party cookies.
The alternatives:
First-party data: Advertisers can now leverage data sourced directly from users.
Comprehensive IDs can create more fool-proof user identifiers suiting various devices and platforms.
Contingent targeting: Determining how relevant ads can be served through web pages.
Uncompromised privacy: Analyzing data from different sources in a clean environment ensures confidentiality is never breached, helping maintain sacred customer privacy.
Analyzing Browser Habits: Studying the browser habits of the target audience helps group them accordingly.
Data platforms: Collecting data from multiple sources and collating helps gain deeper insights.
Google Privacy Sandbox: Sandbox is Google’s industry-wide initiative, which helps improve user privacy by limiting site and app tracking of sites and apps. It also helps phase out third-party cookies.
The above alternatives ensure users’ privacy is respected without restricting programmatic ad strategies. Communicating data privacy practices clearly makes it easy to maintain consumer trust.
6. In-app and In-Game Ads to the Forefront
Did you know that over 95% of free mobile games feature in-app advertising? According to a recent study, 2025 will witness unprecedented growth in In-App and In-Game advertising. Its highly interactive and absorbing nature will endear users with lucrative rewards.
The best way to monetize mobile apps is by selling ad space within the app itself. Advertisers rely on in-app ads to propagate their apps and build a considerable following.
Advertising professionals use various monetization methods for in-app games, such as purchasing ad space within the game itself by integrating the ads directly into the game or using banners at regular intervals. In-game advertising is one of the best means to enhance user experience by displaying ads based on perfect timing, eg when a user is stuck at some level in a game.
The formats used for in-app ads include banners, native ads, display ads, videos, rewards, etc. AI in programmatic advertising collects and analyzes user preferences and behavior to ensure advertisers reach their target audiences.
There are regular ad exchanges where publishers and advertisers meet in the digital marketplace to buy and sell ad spaces.
7. Programmatic Digital Out-Of-Home will Reign Supreme
The future of programmatic advertising will continue to hang on programmatic digital out-of-home (pDOOH), and ad spending could increase sharply by 57% between 2025 – 28, clocking $15 billion.
Most marketers prefer pDOOH as it ensures brand protection as it creates a secure environment to convey their brands’ messaging.
Brands endeavor to create lasting impressions by crafting attention-grabbing ads that are customized, interactive and immersive.
Last year, the following pDOOH campaigns proved the efficacy of this medium, where AI in programmatic advertising combined with creativity helped engage customers in innovative ways:
OVO: A leading energy provider in the UK relied on data sourced from the National Grid ESO for programmatic bidding, bidding only if they were sure that the grid was carbon neutral and eco-friendly.
On: A reputed Swiss sportswear brand collected footfall data to validate the effectiveness of their pDOOH campaigns.
Uber Eats: This San Francisco-based online food ordering and delivery platform used dynamic creative optimization (DCO) for their ads featuring dishes served in neighborhood restaurants.
Programmatic Advertising Trends – 2024
The fag end of 2024 reconciles to the fact that digital advertising is in for compelling changes come 2025. AI will be at the forefront, driving innovation to achieve advertising strategies focusing on privacy consciousness while exploring the immense potential in this field.
AI can help streamline programmatic advertising aspects, including bid management, strategic ad placement, and performance optimization, without compromising performance optimization. AI effectively reduces manual oversight, allowing advertisers to scale campaigns to remarkable levels.
Closing Thoughts
Exciting changes are underway come 2025. With digital advertising scaling new heights, thanks to AI-based innovation, customers’ privacy rights will still reign supreme. Political ad spending and VR/AR ads will further be refined, engaging audiences across the globe.
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