Over the years, some ad tech trends have undergone full evolution, whereas others have only iteratively grown. Nevertheless, each trend has been instrumental in pushing advertising, including mobile advertising, a bit further into the future, while exponentially improving the experience for users, advertisers, and publishers alike.
Here are five trends that will be dominating forces come 2018.
1. Industry Consolidation: Can't Stop, Won't Stop
History has shown that industry consolidation is a natural process and that systemic market forces make it possible to predict its evolution.
In 2017, we saw consolidation of many ad tech players, with merger and acquisition deals reaching record levels. But it's not over yet. What has been most apparent in 2017 is that the ad tech industry is not for the fainthearted.
We'll continue to see companies with a unique offering and position in the market being bought by the big players, while a lack of investment will dissolve others and rid the industry of dead weight.
2. The Innovating Dragon of China
The (not so) best-kept secret in the ad tech industry is China. It's the world's largest smartphone market and it has become an innovating dragon in the emerging world. Innovations in China far exceed those in the West, and the technology industry continues to attract attention, talent, and investment from the rest of the world
In the ad tech industry, there have been multiple acquisitions by top Chinese investors of U.S. ad tech and media companies, which is a trend that is only going to continue and gain momentum.
As a mobile-first market, China has the potential to sweep other players aside. Unlike other markets, it doesn't have the usual dominant players, such as Google, Facebook, and Twitter, or the risk of walled gardens. Many of the local and homegrown players, such as Baidu, Alibaba, and Tencent, have thrived, and the tech industry, particularly mobile-related businesses, have accelerated ahead of the U.S.
In China, more people use their mobile devices to watch videos, pay bills, and order services such as taxis, retail, and food than anywhere else in the world, which suggests that China will have a greater say in the global tech industry than we think.
3. Brace Yourselves for Transparency and Accountability
Mobile video, programmatic, and ad fraud have all been hot topics this year. In 2018, mobile video ad spend is expected to grow 49%, to nearly $18 billion, and people around the world will watch 25% more video on phones and tablets, according to Zenith. By 2019, nearly 80% of programmatic ad spend will go to mobile ads rather than desktop, while advertisers are slated to lose $19 billion to fraudulent activities—equivalent to $51 million per day.
But are advertisers ready to handle this level of complexity around control, transparency, and accountability? CMOs are put in the driving seat, and should brace themselves for a bumpy ride as technology partners are kept accountable for their actions and business models start to come under question.
4. Year of the Laggards and Late Majority
2018 will be the year of the laggards, and we'll see those players in the "late majority" segment of their business lifecycle come into the picture. The late majority tend to move last in the industry, after others have been bold enough to make the first move, and they base their move on industry experience.
Although first-mover advantage is beneficial to some, the laggards will succeed in the end by unlocking the core assets they have been holding on to and have "perfected" based on technologies that have emerged and have been tried and tested.
5. AI and Machine-Learning Will Push the Boundaries of Possibilities
For the ad tech industry, making money revolves around a user's clicking on an ad; predicting ad clicks using AI, machine-learning, or deep-learning techniques can be highly beneficial to improve efficiencies and increase revenue. We've only scratched the surface of the importance of predicting user interest behavior and its benefits, but those who can make accurate estimates will forever change how companies interact and engage with consumers.
So, What Now?
2018 will be a rough ride for most, and it will end with fewer players than we had in 2017. As Darwin's theory suggests, the ad tech industry is about survival of the fittest. In the struggle for survival, the fittest will win at the expense of their rivals; but to survive they must adapt and have the ability to turn investments into innovations.
Ad tech trends seldom mature overnight; and, as the industry figures out how it can improve user experience as well as to increase revenue, there is bound to be a whole lot of debate until the industry matures. However, it's clear that there has been explosive progress over the past few years in improving mobile advertising. At the heart of it all has been innovation, so it's now more important than ever to not stop innovating.