The near future of online advertising will see a mix of forces battling it out, with ad blockers and automatic browser blocking reducing inventory, while AI targeting and acceptable ad practices will fight for growth.
In September, Juniper Research issued a report predicting that global spending for online advertising will increase only 4 percent by 2022. Why so little? The report said the increased use of ad blockers by both individual users and web browsers will mean fewer ads get delivered on desktops, while many people will turn to mobile devices for browsing.
But that’s not the end of the story. Today, Juniper released a white paper suggesting that advertisers and publishers will turn away from ad formats that get blocked and put their efforts into so-called “acceptable ads.” Doing do will lessen the damage inflicted by ad blocking. While ad blocking will continue to grow, it will move from a revenue loss of 17 percent of advertising spend today to 19 percent by 2022.
Artificial intelligence (AI) will also come to the rescue of online advertising. Thanks to data sharing partnerships, publishers will increase their use of AI targeting, pulling in details from cookies, geolocation markers, and cross-device identifiers. They’ll get a detailed view of consumers that allows them to delivery highly tailored ads. Sure, consumer protection groups will complain that it’s an invasion of privacy, but that will only make publishers more innovative in how they collect data.
Thanks to better ad practices and AI targeting, overall spending for online ads will grow by 18 percent CAGR (compound annual growth rate) by 2022. That means an increase from $184 billion today to $420 billion by 2022. That includes spending on desktop, mobile, wearable, and digital out-of-home ads.
“The critical factor for maintaining revenues lies in increasing the quality of experience for browsers,” says Juniper researcher Sam Barker. “Whereas ad blocking will eliminate intrusive ads, platforms leveraging AI for targeting will deliver more personal and accepted ads.”
Download Juniper’s “Ad Fraud: How AI Will Rescue Your Budget” for free (registration required).