An Analyst’s View On The Future Of Advertising

As technological innovation continues to accelerate, what can we expect the advertising landscape to look like in the future? Gartner VP Andrew Frank answers that question and more.

An Analyst’s View On The Future Of Advertising

by Giselle Abramovich

Posted on 09-05-2018

This article is part of our September 2018 series about the state of advertising. Click here for more.

“The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” – C. William Pollard

The advertising landscape has always been subject to disruption, especially with the onset of new technology (think: radio, TV, computers, mobile phones). And as technological innovation continues to accelerate, the industry stands to reinvent itself yet again.

What does the landscape look like now? And what can we expect in the future? sat down with Andrew Frank, VP and distinguished analyst at Gartner, to answer these questions and more. You’ve been observing the advertising industry for a number of years now. What would you say has been the biggest change?

Frank: In the old days, advertising was what we saw on our TVs and heard on our radios and read in our magazines. Today, we go to Facebook for our news, and that’s all algorithmically selected. We go to Amazon for product reviews—again, algorithmically matched to our behavior. We go to Google for just about everything else.

And these systems are all automated in a way that we never really had before. To me, that’s really changed the nature of media and the nature of culture, for that matter. It’s much more insulated, it’s much more automated, and it’s much more real time and immersive because we also now have hardly a minute in the day when we’re not connected to some sort of device that is giving us information. A lot of that automation is powered by AI. How else has AI transformed what we’re able to do from an advertising perspective?

Frank: One of the big impacts for advertisers is that it is now possible to create any kind of content you want at a much lower cost. AI is making it easier to produce media and to target that media to individual tastes and individual behaviors. What’s the current state of ad tech?

Frank: Ad tech is definitely in a transition. A lot of the big ad tech companies are releasing new versions that are more intelligent, but they are also more oriented toward marketers rather than agencies who are trying to get more involved in the process. And I think that in many ways, the capabilities that are built into ad tech have far outstripped the strategic maturity of the advertisers themselves. I think they are still struggling to get the data together to totally utilize these capabilities and even understand how to match the technology with their business goals in a way that really resonates. Can you give me an example of what you mean?

Frank: One example is the idea of optimization. Optimization means that marketers have to be very careful about what metrics they’re going to be telling their ad tech systems to optimize against. And I think there’s a clear bias toward optimizing revenue or conversions or other kinds of short-term measurable goals, even though most marketers instinctively know that there’s a danger in becoming too short-term-focused and damaging brand value. What should be at the top of advertisers’ priority lists?

Frank: They need to focus on really understanding what they’re trying to measure and how that measurement and optimization is going to reflect on their business goals. The biggest challenge is measuring and optimizing the wrong thing.

The cost of building brands is going up, even though the cost of media may be going down. Companies have to be much more cautious about how they define their brands and how they define the marketing objectives that their advertising campaigns are trying to serve. What is your viewpoint on the changing TV advertising ecosystem?

Frank: The TV advertising ecosystem has been fairly resilient against the onslaught of digital innovation that has tried to disrupt it for the past 10 or 20 years. Today we are reaching the beginning of a major transition in television where it is going to become more data-driven, more like digital.

There will be a lot more personalization of TV advertising, a lot more dynamic decisioning, and, of course, on the viewer side, we’re definitely looking away from the world of appointment viewing. Even though prime time advertising is still a big part of the media budget, it’s pretty clear that people are consuming media in different ways, and that it’s putting pressure on the traditional model of the 30-second appointment viewing spot.

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