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The banner ad won’t die – and three other predictions for 2017

December 22, 2016 | By Matt Gillis, Senior Vice President, Publisher Platforms—AOL

The sell-side of the advertising industry is always evolving – and 2016 saw major changes for publishers that will influence their business in the New Year, as well as years to come. But what are the key trends that will shape strategy in 2017?

As the SVP of Publisher Platforms at AOL, these are the types of conversations I have every single day. From those, I’ve come up with four trends in particular that will likely be focus areas next year.

1. The banner ad won’t die.
Traditional display and banners ads aren’t dead. But they have been challenged this year more than ever. For example, ad blocking grew by 41% globally in 2015. And digital-first millennials in particular are more likely to ignore traditional banner ads. Because of these challenges, spend in areas like native, video, and social ads has ballooned.

But banner ads, given their inherent scale and ability to measure performance unlike alternative approaches, still possess enormous potential. The true roadblock, however, has always been about creative. Tune-out can occur because of poor targeting, and creative that may not always resonate with the end-user.

New programmatic-oriented platforms have emerged enabling creative and media agencies, advertisers and publishers to create, optimize and execute dynamically targeted ad experiences across all formats, screens and media types. They’re providing creative development and management tools tied with automation and data that allow for more personal connections with end-users. This will help audiences ‘tune-in’ and put traditional display and banners in a much better position to succeed – which is great news for publishers.

2. New vehicles for app discovery will emerge.
The app marketplace is more cluttered than ever. Worldwide mobile app store downloads are projected to grow 33% from 111 billion last year to 147 billion in 2016, eventually reaching 284 billion in 2020. For publishers and advertisers, finding attention in an increasingly chaotic mobile category is hard. Pokémon Go and Musical.ly managed to find large audiences in a hurry with their viral success.

But, not every app finds success virally. Fortunately, the number of relevant digital advertising and marketing channels has exploded, offering new and unique vehicles for app discovery. Programmatic mobile growth, chatbots, paid social, SMS, paid search, video, and the app stores themselves have all expanded to enable brands and publishers to run more app discovery campaigns and drive downloads via paid media. Simply put – more channels mean more opportunities. This will dramatically boost discovery in 2017. The challenge, then, becomes how publishers and advertisers can drive sustained app usage post-adoption, and increase customer lifetime value through the same marketing mix.

3. Header bidding will continue to drive change.
Header bidding adoption has increased considerably among publishers this year. According to our own survey of 300 premium publishers, 50% have already implemented header bidding. There is no denying the massive revenue increases publishers have experienced since adopting header bidding solutions. In fact, many of our publisher customers see five figures worth of incremental revenue every day since signing on with the AOL header bidding solution.

The next frontier here is mobile – and not just mobile web but in-app. As publishers have seen success across their desktop inventory, they want to see that play out similarly across mobile. But the technology is still evolving to meet the opportunity. Expect platforms, like our own, to evolve in 2017 to deliver there.

4. Header bidding containers will see more adoption.
The real challenge in header bidding is that as adoption has exploded – and though each new header bidding partner can increase yield – adding multiple header bidding partner code to a website introduces a lot complexity across the site. This can slow the load time and impact the end-user experience. And 75% of publishers use at least 5 header bidding partners.

In 2017, with adoption surging, expect publishers to shift thinking towards header bidding optimization. That means a greater focus on header bidding containers that can organize the programmatic process to prevent slow load times and latency. Containers help publishers add, manage and organize potential buyers as they enter an ad server. They basically build in a set of rules and guidelines for programmatic auctions.

Containers can significantly simplify your bidder relationships, give you flexible controls to maximize demand opportunities while preventing latency, and provide transparency into performance across all partners.

As 2016 winds down, digital publishers need to keep these trends in mind when considering next year’s advertising strategies. Banner ads, app discovery and header bidding will all prove directional next year.

matt-gillisAs Senior Vice President, Publisher Platforms of AOL, Matt Gillis (@gillisusa) leads the company’s publisher and third-party sales through its programmatic and monetization tools and services. Previously, he served as Senior Vice President, Mobile Publisher Platforms and oversaw that company’s mobile publisher development and growth.

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