The Future of Ad Revenue: Trends and Opportunities for 2023
Media consumption is changing, and the future of ad revenue will continue to evolve, understand the upcoming opportunities.
Photo by Alexander Grey on Unsplash
Explore the most recent trends and upcoming opportunities in ad revenue beyond 2023.
In recent years, the advertising industry has undergone significant changes due to the rise of digital technologies and the changing media consumption habits of consumers.
As we enter the year 2023, it is essential to explore the future of ad revenue and understand the trends and opportunities that will shape the industry.
In this blog post, we will discuss the current state of the advertising industry, the trends that will shape the future of ad revenue, and the opportunities marketers can leverage to succeed in the dynamic advertising landscape.
1. Programmatic Advertising
Programmatic advertising has been a growing trend in the digital advertising industry for several years, and it is expected to continue to be a major trend for publishers in 2023.
It is projected that advertisers in the United States will spend over 200 billion U.S. dollars on programmatic digital display advertising in 2023. This is based on a report from Statista Research Department in January 2023.
Another report by Insider Intelligence outlines that programmatic display ad spending will grow by 16.9% in the U.S. in 2023, the highest growth rate of any country they track.
Takeaway
It’s becoming increasingly important for publishers to prioritize programmatic advertising, as it’s expected to make up a big chunk of digital ad spend. The technology helps publishers enhance the user experience on their websites by delivering ads tailored to their audience’s interests and preferences.
By tapping into data and insights, publishers can offer advertisers more valuable ad inventory, leading to higher revenue for publishers. They can also use real-time bidding technologies like header bidding and automated optimization to maximize their revenue potential and streamline the management of their ad inventory.
2. User Data & Privacy
Consumers today are more concerned about their data than ever before. With data breaches and online privacy scandals making headlines regularly, people are understandably wary of sharing their personal information online.
According to a study by Razorfish, 50% of the respondents stated that they would not engage in any further business dealings with a company if their data were shared without their consent. When sharing their personal information, individuals tend to have 3X confidence in established brands compared to newly-formed startups.
However, consumers still expect brands to deliver authentic and personalized content safely and transparently despite these concerns. Most (81%) individuals prefer customized experiences provided by brands. However, only a small minority (17%) will provide their data in exchange for such experiences.
In the last year, most consumers (85%) have deleted a phone application, while 82% have chosen to opt out of sharing their data. Additionally, 78% of customers have avoided a specific website, and 67% have decided against online purchasing due to privacy concerns.
Takeaway
To prioritize transparency and safety when collecting and using consumer data, publishers monetizing with ads must build trust with their audience by being clear about their data collection and usage practices.
They should only collect the data necessary for business purposes and utilize it responsibly and ethically. Additionally, publishers should give consumers more control over their data, such as opting out of data collection or deleting it from the publisher’s systems.
By taking these steps, they can demonstrate their commitment to consumer privacy and establish stronger relationships with their audiences.
3. Emerging Ad Formats
A significant trend in mobile advertising spending in the United States in 2021 was the dominance of search and video advertising formats. Search advertising was the most popular mobile format, spending approximately 78.51 billion U.S. dollars.
3.1. Video Advertising
Video advertising followed closely in second place, with 63.82 billion U.S. dollars spent. The trend is expected to continue, with spending on video advertising projected to increase to an estimated 134.5 billion by 2026, while search ad spending is expected to amount to 123 billion.
This indicates that advertisers are increasingly recognizing the potential of video advertising, which is becoming a more significant part of the mobile advertising landscape.
As more consumers turn to mobile devices as their primary source of internet usage, the competition for advertising space is heating up, and advertisers are looking for new and innovative ways to reach their target audience.
3.2. Podcast Advertising
The popularity of podcasts has skyrocketed in recent years, and it’s not just listeners who are taking notice. Advertisers are also recognizing the potential of this medium and have been increasing their spending on podcast advertising at a rapid pace.
In fact, podcast advertising spending in the U.S. has been growing at a double-digit rate and is expected to reach a whopping 2.56 billion dollars by 2024. This growth is not surprising, given the unique advantages of podcast advertising.
Podcasts are highly engaging and immersive mediums that allow advertisers to build a strong connection with their audience. Unlike traditional advertising, which can be easily ignored or skipped over, podcast ads are often woven seamlessly into the content, making them harder to ignore.
As per Dan Granger, CEO of the audio ad agency Oxford Road,
“I think that you’re seeing a little mini gold rush here that people are responding to. Word got out that people actually like consuming podcasts… on YouTube and now the marketplace is reorganizing around that,”
Takeaway
Publishers can attract advertisers and generate revenue by creating engaging and high-quality content as podcast advertising spending grows quickly. Publishers must create content that resonates with their audience and maintains their interest. Building a loyal following can help publishers attract advertisers that aim to reach their target audience.
Publishers should consider offering sponsorship and advertising opportunities within their podcasts. By weaving ads seamlessly into the content, they can create a more immersive and engaging advertising experience that is more likely to resonate with listeners.
4. The Rise of Mobile Advertising
The emergence of mobile devices has most certainly transformed how businesses tackle advertising and marketing. Given that nearly half of the global population is using smartphones and tablets to access the internet, it is unsurprising that companies are capitalizing on this trend to market their products and services online.
The statistics are clear evidence of the significance of mobile advertising in the digital world. Global expenditure on mobile advertising reached an impressive $327 billion in 2022, and experts estimate that this amount will reach nearly $400 billion by 2024. This underscores the importance of mobile marketing for businesses that invest substantial resources to connect with their target audience.
💡Search, social media, and video formats are the ones that receive the most significant mobile advertising expenditure in the United States.
Takeaway
To stay competitive, publishers must adapt to the increasing importance of mobile advertising and the rise of mobile devices. This can be achieved by developing mobile-friendly content and optimizing their websites for mobile devices, which can help attract more traffic and boost revenue from mobile advertising.
5. Contextual Advertising
The year 2023 will see the continuation of contextual targeting as a significant trend in the digital advertising industry. As privacy concerns rise and ad-blocker usage increases, advertisers resort to contextual advertising to connect with their target audience more genuinely and efficiently.
Publishers can capitalize on the trend of contextual advertising spending, which reached 178.3 billion U.S. dollars globally in 2021. Another study from Nano Interactive, an advertiser research organization, revealed an expected 8% year-over-year shift from audience to contextual targeting-driven spending between 2022 and 2023. This shift is predicted to result in a substantial increase of around £770 million during 2023 in contextual spending.
“Targeting that is free of all personal identifiers is likely to be one of the fastest growing sectors in digital marketing this year. Brands and advertisers who embrace these new targeting models will be well placed to navigate signal decline and ensure their campaigns are safe from changes brought both by tech giants and new legislation.”
According to the survey findings, a significant majority of 59% of respondents believe that AI can significantly enhance the effectiveness of contextual targeting in digital advertising. Using the technology, advertisers can better understand their audience and provide more customized and meaningful ad experiences.
Takeaway
With more advertisers adopting contextual advertising, publishers can use their content to attract relevant ads and generate revenue. They can increase their chances of attracting advertisers willing to pay a premium for ad inventory by producing high-quality content that aligns with their target audience’s interests.
Conclusion
Looking forward to 2023 and beyond, it is evident that publishers who keep themselves updated with the latest trends and opportunities will be in a favorable position for success. The trends publishers can use include programmatic advertising, mobile optimization, and emerging technologies such as augmented reality and voice search.
Contextual targeting continues to be of utmost importance. By being open to these new developments and experimenting with different platforms and strategies, publishers can access new revenue streams and optimize their earnings, thus staying competitive in the constantly evolving digital world.
