The Future of Advertising: New content delivery models bring opportunities for advertisers

By AdNews | Sponsored
Samuel Tan, senior director of market development at Xandr.

This four-part series, brought to you by Xandr, explores where the future of advertising lies following a COVID-induced digital acceleration, changing consumer behaviours and the rise of video.

The future of advertising will be impacted largely by shifting consumer behaviours and increased government regulation.

“Advertising needs to respond by helping publishers monetize new formats and helping brands effectively connect with their audiences however and wherever they are viewing,” Tan says.

Whether it’s the growing number of devices for content consumption, the rise of OTT and streaming or new policies put in place by governments and industry bodies, Samuel Tan, senior director of market development at Xandr, says these emerging trends, while challenging, present new opportunities for brands and will continue to shape a new age of advertising.

Increasing Consumer Choice
According to Xandr’s proprietary research, nearly seven out of ten consumers acknowledge consuming content is part of their daily routine.

Conducted prior to the COVID-19 pandemic, the report found viewers were already consuming on average four hours of content daily, with 80% using their smartphones as a primary device for consumption.

With the “anywhere, anytime” mentality that this device fragmentation instils, audiences now have more choice than ever regarding what they watch, when they watch and how they watch it.

Tan says this is an ongoing trend that won’t slow anytime soon.

“I think about really simple things like Bluetooth headphones, where I now almost exclusively listen to news rather than read it,” he says.

“From my point of view, people don't always want to be staring at a screen. They're happy to consume content in more varied ways, like audio in my case, that better suit their lifestyle and the way they want to.”

Despite higher consumption levels across all media throughout the COVID-19 pandemic, Tan says these levels will likely even out again, with continued growth in some areas.

He predicts increased consumption of short-form content on platforms like TikTok as attention spans wane, as well as a move towards more immersive content that gaming platforms provide.

Similarly, OTT content, which can be streamed wherever a consumer has an internet connection, will also continue to rise.

Rise in OTT presents opportunities for brands
Opportunities surrounding OTT inventory are setting a new path for the future of how advertising is bought and sold in the TV space.

Tan says header bidding - which enables simultaneous auctions with multiple sources, allowing publishers to receive advertiser bids that may otherwise be unavailable - in formats like OTT will create more equal opportunities for brands to reach TV audiences that were once solely available to those who bought upfront.

“OTT providers and streaming services will be able to provide brands and marketers with an equal playing field and access to inventory, which is so different to the way TV has traditionally been booked,” he says.

This shift towards header bidding in streaming will level the playing field for brands, and increase monetisation opportunities for publishers.

Xandr has built a header bidding solution for OTT that addresses important nuances of this form of premium video, allowing greater control of things like competitive separation so brands don’t have to “spray and pray.”

“You can do it in a show that really resonates with your brand and it doesn't have to be a whole show, it could just be that one episode or that one moment in an episode. You can really get very targeted in the way your brand is getting immersed into the overall content experience.”

There will also be better chances to curate OTT inventory.

Tan says having a “curated catalogue” of inventory enables brands to take a more performance-focused approach to reaching those OTT audiences, compared to linear TV.

“It allows a buyer to achieve a certain performance, transparency and all these other things for the brands that they represent,” he says.

“Equally it is a real monetization opportunity for those that are within that curated catalogue because it can potentially increase the percentage of ad spend that reaches publishers more directly.”

Such transparency is not only important for transactions between buyers and sellers, but for consumers as well.

New regulations, more awareness
As identity and targeting capabilities continue to advance, so too have concerns around consumer privacy. As a result, industry bodies and local and federal governments around the world have put forth new policies and regulations. Global examples include the European Union’s General Data Protection Regulation (GDPR) and California’s recently introduced California Consumer Privacy Act (CCPA).

In Australia, the Australian Competition and Consumer Commission (ACCC) has begun its inquiry into the digital advertising ecosystem – questioning its complexity and opacity – which will see the local industry continue to evolve and adapt to new laws.

While it is still early days for local regulations, Tan says as more come into play there will likely be two outcomes.

“One of them is the growing desire to make sure that the news media outlets receive their fair share and copyright infringement becomes enforced across other platforms,” he says.

“That then ties into transparency in the ecosystem. Media outlets should get their fair share , and transparency is needed for brands and marketers to really make sure their spend goes to the right places.”

Consumers too have started to become savvier in their understanding of the value exchange between themselves, advertisers and content providers – seeing first-hand the effects of advertisers’ reduced spend on trusted newsrooms during Coronavirus.

“People are starting to see that technology platforms and advertisers have a significant role to play in supporting quality journalism. They may also come to understand that advertising can support an open internet,” he says.

Or, Tan says, as this awareness continues to increase, more people may be willing to pay for quality content from newsrooms they trust and media studios whose creativity they value.

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