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With technology today, companies have modernized their advertising strategies. But by doing so its leaving advertising agencies in the dust. Making larger companies cut ties with them. A big reason for this happening is the accessibility of technology for everyone. The rise of "digital native" generations means there just isn't a need for traditional advertising anymore. Its being dominated by Google and Facebook who currently make up 61% of online ad spending. Other advertising agencies barley hit the 3% mark. With programmatic advertising, companies can make agencies in-house. They now don't need to deal with the hassle of having outside companies. Having advertising in-house means more efficient process in terms of buying and selling.

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With technology, accountability, and data as hot-button issues, many companies are re-evaluating and modernizing their advertising strategies. But these strategies may be leaving advertising agencies in the dust.

Proctor & Gamble Chairman and CEO David Taylor recently made headlines when he announced that P&G would continue to cut ad agency and production fees from its budget. The company has already reduced agency and production spending by $750 million since 2015, and plans to cut another $400 million by 2021. The process will reduce the number of agencies P&G works with by 80 percent from the original number.

This move is only part of a trend of larger companies cutting ties with ad agencies. There are several factors behind this trend. The biggest reason behind the shift away from agencies is the democratization of technology.

The accessibility of the Internet and rise of "digital native" generations mean that traditional advertising is on the decline; advertising jobs are declining during an economic expansion for the first time on record. The Internet has fragmented audiences, and online reviews often make consumers more selective about where and what they're purchasing.

Online advertising has also been dominated by Google and Facebook, which own a disproportionate amount of ad spend. Together, they drive more than half of global ad spending, controlling a combined 61 percent. So far, no other advertiser has been able to crack even a 3 percent share of the global market.

The number of ad agency jobs decreased by about 5,000 in 2017. Positions in media buying agencies have been generally stagnant since 2013. Meanwhile, Facebook and Google accounted for 90 percent of digital advertising growth during the same period.

In addition to offering inexpensive ads, Facebook and Google have massive amounts of user data. They're also two of the most well-known brands in the world: Facebook has 2.2 billion monthly active users and Google processes 1.2 trillion searches per year (that's 40,000 per second). This gives both massive scale and reach, and agencies haven't been able to catch up.

The second biggest factor in the decline of ad agencies is that, through programmatic advertising, companies are able to emulate agencies in-house. Not only did the number of jobs decrease, but the number of account wins also dropped, leading to an overall decrease in revenue.

Automated ad buying was a revelation. This type of program introduced a way to make the ad buying process more efficient automatically buys and sells ad space, and it now accounts for nearly 80 percent of display spending in the U.S. This number is expected to rise to 85 percent by 2019.

Programmatic is far from perfect - clickbot fraud and lack of control over ad placement are two major issues that should scare advertisers - but it works far faster than a human ever could. "Humatic" programs allow users to automate and optimize campaigns, which gives a single media buyer the media buying capabilities of a full team.

Anything that gives companies more control over advertising is now seen as a benefit. Keeping advertising in-house is cost efficient. Companies also own more customer data, giving them the ability to fine-tune their targeting. Additionally, customers are increasingly placing value on personalized marketing strategies, such as personalized responses on social media. This strategy has the additional benefit of giving the company data about what users think and value.

For many companies, involving outside companies makes it difficult to quickly adjust digital campaigns. Bringing advertising in-house means more efficient processes in terms of adjusting strategy in addition to buying and selling.

There are other factors driving companies away from ad agencies, too. One example is transparency issues breaking trust between agencies and companies.

Brands can also work directly with platforms to produce native advertising like blog posts. A Facebook and Google model that promises massive reach and scale for low cost has a final benefit in eliminating the middleman. Facebook and Google work directly with companies to place ads, and so companies who use these services in conjunction with automated eliminate most of the need for outside advertisers.

Finally, traditional agencies are simply having trouble changing. They don't have the digital capacity of newer and smaller agencies and aren't adapting to new advertising models. However, it is imperative for agencies to adapt to these models and adjust according to new advertising strategies to survive.

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How Tech is Disrupting the Advertising Industry - Maximus Live - Medium

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With technology, accountability, and data as hot-button issues, many companies are re-evaluating and modernizing their advertising strategies. But these strategies may be leaving advertising agencies in the dust. Proctor & Gamble Chairman and CEO David Taylor recently made headlines when he announced that P&G would continue to cut ad agency and production fees from its budget.

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People are so used to seeing online ad's on almost every site they're on that some people feel annoyed when they're shown ads that don't apply to them. This proves the power of programatic advertising. It has taken the digital advertising world by storm. As it continues to grow, we are moving closer to disruptors fulfilling their vision. It quickly grew into a B2B and is a driving force among the advertising industry.

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We live in an age where we regularly talk about things in person with our friends, then see ads for those same products online. People are growing increasingly accustomed to seeing digital ads for items that appeal to them, to the point where some people are even starting to feel frustrated if an ad doesn't apply to them. That is evidence of the power -- and value -- of programmatic advertising.

Programmatic advertising is a disruptive technology that recently took the digital advertising world by storm. As more key players contribute to its growth and development, we move into the acceleration phase of the disruption cycle in which disruptors move closer to fulfilling their vision and early adopters thrive on the use of the innovation. Here, we see a culture form around programmatic advertising in which first movers become thought leaders and grow strong foundations and processes around the technology, second movers make tweaks to advance the technology and build it out further and consumers begin to accept and welcome the product into their daily lives. The next step involves maturation of the innovation, as it evolves into the dominant design that will likely remain relatively stable for some time. Later stages involve saturation, in which the innovation permeates many or all channels or industries, and commoditization, in which the innovation becomes a commonplace must-have.

I don't think programmatic is at the maturation stage yet, since such a revolutionary technology is still being iterated and tweaked and is not yet utilized by the broadest customer base (think slow movers or laggards, according to the diffusion of innovations theory). Instead, I think we are perhaps at the most exciting place to be: I would argue that programmatic advertising is somewhere among the first two stages of the disruption cycle; it is still close to its original disruptive form, bleeding into the acceleration phase as it moves rapidly toward validation.

Programmatic started as a B2C tool, forced its way into B2B and grew to be a powerhouse among the advertising industry. But we are still moving forward. We are still iterating, adjusting and tweaking. Data and privacy laws are rightfully curbing the direction in which programmatic grows; while some may think these guidelines are impeding the growth of the innovation, I would instead posit that the innovation is still evolving and moving forward, which is a win. It is simply moving forward in a way that will sustain its success. If programmatic moved forward without heeding privacy laws, it would not last. Instead, paying attention to what people want, removing deficiencies and tweaking the design, structure or product makeup toward the customer base's preferences are smart moves because they together mitigate risk involved in any disruptive innovation.

Programmatic's growth could be hindered by its guidelines -- or it could be strengthened by them. If we listen to what people are telling us -- that they are okay with it if X, Y, Z -- then we can transform "yes, but" into just "yes." Showing consumers that we are valuing their input and adjusting based on their needs will strengthen our value proposition, proving that we are fulfilling a need for our customers rather than pushing an unwanted product onto an unknowing person. Consumers are smart and savvy, and we need to give credit where credit is due. If they want privacy but also want ads that apply to their needs, we need to find a way to do that. Those who do will survive, and those who don't will fall by the wayside. Listening to customers will dictate a new direction for the market, differentiating the successful companies from those that are not able to respond to customer demand. Which of the two are you?
Laura Bakopolus is an accomplished, creative and strategic marketing leader with a proven ability to develop and implement integrated marketing and communication strategies and plans that support business objectives. Connect with her on LinkedIn here. If you enjoyed this article, sign up for SmartBrief's free e-mail from the Interactive Advertising Bureau, among SmartBrief's more than 200 industry-focused newsletters.

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People are growing increasingly accustomed to seeing digital ads for items that appeal to them, to the point where some people are even starting to feel frustrated if an ad doesn't apply to them. That is evidence of the power and value of programmatic.

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Companies like Facebook, Apple, Amazon, Netflix, YouTube and many more are adding to the complicated landscape where traditional marketing just isn't working anymore. We see many ads in a day, but mostly being online. Ever wondered why you saw an ad on Facebook for a dress after you went on their profile on Instagram? Thats the use of programatic advertising. Its a way more innovated way of using advertising that you just dont need agencies anymore.

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Programatic has brought a huge change in the advertising world. With the end of cookies and ID targeting the in house marketing efforts are pushing towards a new era of online marketing.

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Online marketing has gone through three distinct phases so far, where innovation and economic upheaval have more or less systematically brought about the end of one era and a shift toward the next.

Some think that the age of having everything move entirely online in marketing is already upon us, but I actually beg to differ. I don't think that the skills required to buy offline and online are yet quite the same, and this will continue to be the case for the next few years to come.

One thing is for sure, though. As we look toward the future, there's a lot we can learn from the (short) history of digital marketing.

Where it all began

The first era of digital marketing is the period that led up to the dot-com bubble, which came to an end in 2001. That period-which saw the emergence of the Web 1.0 platform, the first clickable banner, major players such as Google and Yahoo and web search as we know it-also led to the birth of the page impression. Those years were marked by high CPMs, approximative measurements and the union of old media and new, symbolized by the now-infamous merger of AOL and Time Warner.

The rest as we know it is history. The fusion in question has since become known as the "worst merger of all time." Companies with insanely high valuations proved to have little capacity to generate long-term revenue, and CPMs crashed.

The era of direct response

The second online marketing era took place over the years that followed the dot-com bubble, more or less through 2010. I like to refer to this period as "the era of direct response," with ads characterized by their trackability, measurability and snappy sales copy.

Key innovations of the time included post-click and impression tracking with the ubiquitous DoubleClicks spotlight. Paid search as we know it today emerged via services such as Google and Omniture.

The drive for truly cost-effective media was behind a boom in paid search during this era. Affiliates and direct response display became major advertising channels, with Criteo and Google AdWords leading the field. While the 2008 financial crisis undeniably shook things up, a major shift was the emergence of ad exchange platforms such as the Facebook Audience Network. SSP was widely adopted by web publishers from 2010 and onward.

The programmatic revolution

The advent of programmatic brought about huge change in the advertising world. The likes of Rocket Fuel led the field before companies shifted toward self-serve trading. Then AppNexus and The Trade Desk picked up where Rocket Fuel left off.

Platform-based online media expanded to include video, mobile, audio and native advertising, while the Facebook/Google duopoly continued to grow rapidly.

All good things come to an end, however, and programmatic is no exception. The end of cookies and ID targeting and a shift toward the in-housing of marketing efforts is ushering in a new era of online marketing-maybe the most exciting yet.

Omnichannel platform buying is the future

As we enter the fourth and possibly final era, brands are buying media from an ever-increasing range of platforms. Google and Facebook have been joined by Amazon, with Apple looking likely to (re)join the field at some point. Pinterest, Snapchat and Twitter are growing their own platforms, Spotify has joined the audio ad market, online video advertising is booming and out-of-home platforms are emerging from the likes of JCDecaux. Connected TV looks set to be next, with the likes of Amobee and Xandr. We can expect more platforms to form across all media channels and some to challenge the hegemony of Amazon, Facebook and Google.

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How Programmatic Disruption Is Creating a Fourth Era of Digital Marketing

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Online marketing has gone through three distinct phases so far, where innovation and economic upheaval have more or less systematically brought about the end of one era and a shift toward the next. Some think that the age of having everything move entirely online in marketing is already upon us, but I actually beg to differ.

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Ad buying uses a software where they purchase digital ads instead of going though the traditional process of negotiations and what not. This now makes it less expensive as companies cut down on overhead. The software is also extremely versatile, and advertisers are now able to utilize RTB and can buy guaranteed ad impressions in advanced.

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The landscape of online advertising is rapidly changing. New technologies have emerged that are not only disrupting traditional online advertising, but changing the way in which consumers engage with advertising content. Consider the following technologies which are improving advertising ROI and changing the way in which marketers engage their customers:

AI and Online Advertising

Ariticial Intelligence (AI) has been dismissed by some as a marketing buzzword - technically a part of upcoming online advertising technology, but not pervasive or popular enough to be pertinent to the vast majority of advertising clients. The familiar refrain "I don't hear clients asking about it, it's not important to them," can be seen and heard all over the advertising industry. And yet tech giants like Microsoft and retailers like Nordstrom are leaping aboard the AI-Advertising train. Microsoft published a research paper that determined that improving the accuracy of CTR estimation in sponsored ads has an enormous impact on user search experience and business revenue. They report that "even 0.1% of accuracy improvement would yield greater earnings in the hundreds of millions of dollars." Google, Alibaba, and Amazon have been building initiatives that emphasize the marriage between AI and big data. The reasoning is simple: there is simply too much excellent data not to turn it into useful, actionable, and revenue-generating insights. With predictive programming and analysis, referenced below, coming into play, we can be assured that AI is changing the nature of online advertising - for the better.

With predictive programming and analysis, referenced below, coming into play, we can be assured that AI is changing the nature of online advertising - for the better.

Predictive Programming

Predictive programming is one of the more cogent examples of the increasing sophistication in online advertising technology. This technology collects and analyzes a wide variety of online behavioral data from individual users. Almost all online behavior can be collected, whether it relates to where the user is going online, what they are doing there, how long they are spending, what they are clicking or even looking at, and even how they get there. This yields a huge amount of helpful information that can be synthesized into a profile of a user, which, in turn, can be leveraged into more interesting, pertinent, and overall successful online advertising. This innovative technology is not dissimilar to simple re-targeting, at least on the face of it, but a deeper look reveals that predictive programming is much more complex and finely tuned. Retargeting has been very powerful for the advertising world, but it has come with some major problems. For example, being retargeted for all guitar-related products when you bought a guitar strap once as a gift. Predictive programming doesn't exclusively rely on a single purchase or website visit to offer up advertisements in that realm.

Click to Tweet: Predictive programming and analytics are aiding advertisers in their efforts to both increase ROI and provide a better advertising experience for those who will be marketed to.

Omni-Channel Marketing

Omni-Channel marketing means providing users with a seamless experience across all channels and devices. The key realization here is that multi-channel marketing is simply no longer the most powerful way of reaching and marketing to consumers. Omni-channel marketing provides pathways of communication between the user and the company that allow a better user experience, create more points of interaction, and more opportunities for revenue-generating action. The interaction with the user across all points of contact allows companies to link customer identifiers and enhance data-gathering. found that of the customer insights to be gleaned from omni-channel marketing, the most important were purchasing propensities and buying behaviors, profitability and lifetime value, and purchase history. With the benefits of omni-channel marketing making themselves more and more apparent to marketers who are willing to invest in the integration, 78% of companies surveyed said that they are either currently experiencing or anticipate experiencing a sales lift. The goal: delivering a personalized and satisfying marketing experience to consumers. The solution: omni-channel marketing.

Connected TV

CTV is any television that connects to the internet - including Smart TVs, devices like Apple TV and Roku, and gaming consoles like the X-Box or Playstation. With ad-skipping technology improving every year, business are getting less bang for their buck on TV ads, but CTV, which is rapidly encroaching on the traditional TV market as it is, also provides a happy solution for advertisers. Last year, nearly 60% of households own a CTV . 160 million Americans streamed using CTV every month, CTV use grew 300% but CTV only accounts for barely 1% of TV ad dollars. The drawback with CTV is that it currently has no "measurement currency," meaning that there is no highly effective way to measure audience size and makeup. The lack of cookies and device IDs is holding CTV back from the billions of dollars that are being wasted on traditional television. But by no means does this setback indicate that CTV will remain an online advertising footnote. The audience, popularity, and reach of CTV cannot be ignored. CTV is not being utilized at the level that is should be, and contains enormous opportunity for dynamic businesses.

Programmatic

Many of the technologies we have written about in this analysis are based in the growth of AI, but equally as important as being able to gather and utilize customer data is being able to efficiently implement it. This is where programmatic technology comes in. Programmatic ad buying uses software to purchase digital advertising rather than going through the traditional process of negotiations, insertion orders, RFP's and other hassles. This, in turn, makes advertising less expensive as companies cut down on overhead. Programmatic software is also exceptionally versatile, allowing advertisers to utilize RTB (or real-time-bidding) as well as buying guaranteed ad impressions in advance - called programmatic direct. A report from Accenture found that today buyers and sellers on average use programmatic for only 17 percent of their inventory, but within the next two years, that figure will rise to 35%.

As you can see, the forward march of technology continues to radically redefine online advertising. As these technologies continue to improve and refine their measurement and ROI, they will become increasingly critical to online advertising and marketing. If your brand is in need of fresh perspectives and leadership, contact 10TH DEGREE today.

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The Technologies Changing Online Advertising

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The landscape of online advertising is rapidly changing. New technologies have emerged that are not only disrupting traditional online advertising, but changing the way in which consumers engage with advertising content.