5 Digital Ad Industry Predictions For 2014

An engineer at heart, Eric Bosco, CEO of ChoiceStream, has a finite view of the changes the advertising industry will face in the future. He was also chief product officer at comScore and worked at AOL. Online Media Daily caught up with Bosco to talk about his predictions for 2014, discussing programmatic technology, mobile advertising, cookieless technologies and his view on the diminishing importance of TV. 

MediaPost: What parts of the programmatic process will become more important than others?

Bosco: The vast majority of programmatic tactics began with retargeting. Now that we've established that simple baseline, other types of marketing approaches will go a little further up the funnel, create new customer acquisitions, and drive brand awareness. All of which are considerably more complex and need more sophisticated systems. Analysis will become the lion share activity in 2014.

Algorithms are key to the programmatic industry, which will expend more energy and resources on them. Companies with sophisticated, deep and scaled algorithms will outstrip those that rely on basic statistics. Even large and established providers will fall behind, as brands opt for better ROI. When the algorithms are better, companies and the campaigns they manage have better chances of success.

MediaPost: Are we there yet; have we seen the year of mobile?

Bosco: Mobile has become a non-category because every layer of the digital advertising ecosystem is becoming media agnostic, integrating mobile, video, display, social and local. In 2014, marketers will stop thinking about separating mobile from desktop budgets and start thinking about how to reach the consumer across devices. The mobile-only providers will find it difficult to compete over time, if they can't find consumers across every distribution channel.

While online platforms have spent the last few years expanding into mobile and video, the pure play mobile platforms have steadfastly refused to expand into online. They cannot continue with this strategy. The connected consumer operates on a variety of devices, and it's become easier to connect them through behavioral patterns.

MediaPost: Have we stepped into a cookieless world?

Bosco: The industry found pretty good statistical approaches by creating a signature of Web browsing behavior through similar patterns that come from one set of devices or another during a certain time of day in certain geographic regions. The methods don't track someone specifically, but rather take a statistical guess. With the amount of computational power, the guesses are becoming quite good.

The advertiser, publisher and consumer are working to move beyond today's open cookie world. However, every layer of the digital advertising ecosystem has been built on cookies, and the industry will falter if cookies are simply ripped out. So yes, cookies are diminishing in importance as technology improves, because they are a pore technical implementation to a class of problems. This is not going to happen tomorrow, but when it does, it might mean the development of more effective and more efficient persistent IDs.

Even when the term "cookie" becomes obsolete, and even when privacy regulations become more mature, one-to-one service and advertising are here to stay. Too many people and businesses are enjoying the benefits to turn back.

MediaPost: How will marketers view data marketplaces in 2014?

Bosco: In the short term, brand advertisers will finally begin to understand they are sitting on valuable user data. More brand marketers think about organizing data, but few think about putting it into a data management platform and syndicating it to companies that help them market to existing and potential customers.

The data marketplace will separate into three methods for collecting data, associating it with consumers and using it for advertising. The resolution to the cookie challenge by customers, advertisers and publishers will contribute to evolve into three types of data providers. The third-party data providers we're familiar with will continue to thrive under a combination of self-regulation and government regulation. The major players will establish walled gardens within which they will use their own data on their own traffic under the same regulations. Given the semi-private nature of their walled gardens, they may have more latitude than the third parties. Finally, consumers will come to control their own data; platforms will emerge to help them capture the value of that data. This solution is still years away, but it is coming.

MediaPost: How will brands finally realize the diminishing value of TV?

Bosco: Now that a third of Americans own a tablet, and 30% of YouTube is viewed on 30-inch or larger screens, brands need to follow their consumers into the digital, unplugged world. Certainly, video content will continue in popularity and long form through very short form will proliferate. It is the broadcast business model that is endangered. Home theaters and living rooms oriented around the 50 will diminish in importance to the American family. Likewise, GRPs, and commercial air-time will diminish in importance to the American brand.

3 comments about "5 Digital Ad Industry Predictions For 2014 ".
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  1. Kevin Horne from Verizon, December 27, 2013 at 3:27 p.m.

    diminishing value of TV? as measured by what? CPMs on big events go up every year...

  2. Eric Bosco from ChoiceStream, December 27, 2013 at 10:06 p.m.

    Well, if you look at viewership data, IP video services like netflix, HBO Go, Amazon Prime, youtube etc. are still growing very fast while viewership growth for cable/broadcast TV has stalled. Now advertisers still consider broadcast TV extremely important and spend high CPMs against it. I'm not suggesting they should stop doing that. However, I am suggesting, they should also look at the Macro trend and realize that the CPM based, broadcast prime time TV show audience is a diminishing commodity over time and start thinking about how to reach their audience through alternate sources of video content that are IP based. More than one advertising agency we work with is in fact thinking in those same terms and is looking for ways to reallocate money from regular TV to online Video sources.

  3. Steve Schildwachter from Enterprise CMO, LLC, December 30, 2013 at 10:49 a.m.

    10 years ago everyone said "digital" was going to kill TV, or kill the 30-second commercial. Now we realize that "digital" instead supercharged "TV", with programs, and -- yes -- 30-second commercials being delivered in all the ways Eric describes.

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