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2017 Digital Advertising Trends

Posted on 10.16.2016

:: By Daniel Bornstein, Demand Media ::

The digital advertising space is complex and oftentimes opaque. Its functionary, Ad Tech, is a conduit intended to drive transactions within milliseconds, provide valuable data and piece together a nuanced Web of prospective partners and technologies. Things move fast and are always changing.

The New Year will usher in its own set of trends, not least of which will be a move back to principled 1:1 relationships between advertisers and publishers using the strongest, most reliable and credible partners. With that as a barometer, let’s unpack a few trends that I think are likely to be salient in 2017.

Opaque Transactions, Take Rates and Middlemen 

(Image courtesy of AppNexus)

PWC and the IAB teamed up to analyze the inefficiency in digital advertising spend. The subsequent report they published posits that only 45 cents of every dollar spent makes its way to a publisher, the entity that actually owns the assets. The above illustration from Ad Tech player AppNexus clearly illustrates the issue. While this is not a new concern, revelations from influencers such as Hamish Nicklin (CRO of the Guardian) that as little as 30 percent of spend sees its way to the desired location will fuel heated debate and, for the first time, action in 2017.

There are several things that are likely to happen: (1) DSPs and SSPs will become more transparent in their pricing; (2) SSPs will have to lower their take rates to compete; (3) rates will start to shift from percentages to flat rates per transaction; and (4) larger platforms will consolidate smaller niche players within the value chain and provide all-inclusive offerings that are priced more aggressively. Both advertisers and publishers will stand to gain when the moat separating them recedes. 

Ad Blocking and Page Speed 

(Image courtesy of Edelman)

This was the year that fervor built to fever pitch on the topic of Ad Blocking. The common sentiment seemed to find all players in the ecosystem guilty of degrading the user experience.  It’s important to note that publishers are not the only ones to blame; an influx of vendors separating advertisers and publishers have heralded in too many pixels that cause latency resulting in overburdened advertising experiences. According to eMarketer, more than 15 million more Americans are expected to layer on blockers in 2017. Even more alarming is that according to PageFair, 22 percent of the world’s smart phone owners are blocking ads. At the same time, consumers, by in large, prefer free content, and content sites need to keep the lights on.  With so much money at stake, 2017 will be the year that we reach the point of inflection and the large platforms (Google and Facebook) that account for the lion’s share of global digital revenues will lead the way by further articulating their positions and leading the industry with tangible solutions.

In today’s fast moving and mobile world, page speed is a key barometer of user experience. Both Google and Facebook have already broached this issue with the launch of Accelerated Mobile Pages, or AMP (Google) and Instant Articles (Facebook). While both these solutions greatly decrease latency they have not been able to match rates of monetization for publishers. In 2017 we will witness a wider adoption of these protocols and users will begin to notice. Moreover, both Google and Facebook will likely release lightweight advertising solutions within their frameworks to solve for monetization. Publishers both large and small will follow suit.  


(Image courtesy

Big Data will continue to be a focal area ushering in meteoric change for both consumers and businesses. To date, the pace of change has felt glacial as piecing together and deciphering massive data sets for concrete application has been a challenge. Large, well-capitalized organizations such as IBM (the promise of Watson), Salesforce (the acquisition of Krux) and Oracle have both the resources and the foresight to substantially innovate on faster timelines.  On the digital advertising front, Data Management Platforms (DMPs) should continue to innovate, moving past somewhat unreliable third-party data to more reliable data. In addition, transacting on second party data should start to move into the mainstream. Reliable and trusted DMPs will act as credible arbiters in the brokering of incisive non-personally identified information data between marketers and publishers. Although a platform is needed to execute on this effectively, this bridge will allow these primary parties to transact directly and create new, meaningful links that will foster enhanced and multi-faceted cooperation.

Header Bidding 

(Image courtesy of Sovrn)

For the uninitiated, header bidding is a snippet of code placed within the header of a publisher’s site that allows multiple demand sources to compete for an impression simultaneously (also known as pre-bidding), thus serving the highest priced bid and enabling the publisher to realize the true value of its inventory.

In late 2015 the stage was set as Tom Shields from AppNexus and Jonathan Bellack from Google debated the merits of header bidding. Shields spoke about the democratization of bidding and creating an even playing field, while Bellack spoke about latency, degraded user experience and ad blocking. Publishers, for their part, adopted Header Bidding in droves (according to OpenX, adoption increased 300 percent over the past year) and many publishers have quoted significant yield gains as a percentage.

As possibly the most talked about programmatic trend in 2016, expect 2017 to offer a definitive answer to the question of yield versus latency. Google’s announcement that they are rolling out Exchange Bidding will get us one step closer to the answer. With multiple exchanges having the ability to bid within the Google ecosystem, the democratization of bidding could surface via the ad server thus decreasing latency. In tandem, it is likely that more sophisticated publishers will measure latency not only as it relates to user experience but also as it relates to overall yield (e.g., higher CPMs v. the ability to load more ads with incremental page views). From an advertiser perspective, this brings inventory one step closer as it promotes access to premium first look inventory, further separating the good inventory from the bad and shining the light on quality publishers with quality audiences. 


(Image courtesy of Alex Naubaum)

Programmatic advertising continued to be the unequivocal buzzword of 2016. To deny its ascent as the dominant force in digital media buying would be obtuse. Growth is currently being driven by mobile and video. With platforms like Google and Rubicon leading the way, direct buying will gain a transactional efficiency (programmatic direct) but will also lead to discoverability. The discoverability aspect is of paramount importance to buyers as IO-based RFPs tend to be biased and highly subjective. While programmatic platforms will take part of the margin when utilized in these transactions, their margins will be small relative to the data-based rigor they’ll provide – in this particular instance they will add value by further uniting the respective parties directly. 

About the Author

Daniel Bornstein is the senior vice president of media monetization and operations for Demand Media. Demand Media owns and operates a host of content rich sites such as eHow,, Cuteness, Techwalla, Sapling and LEAFtv, several of which are highly ranked in their specific comScore categories.

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