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Trends 2019: AR & mobile on the rise

Augmented reality (AR) is just one of several important trends that will come to the fore in 2019 as improving technology continues to provide creative marketing strategies.

It’s not just AR that will bring changes to digital advertising this year. In-app header bidding will become a solution within the mobile apps ecosystem. Meanwhile, blockchain has the potential to increase transparency in the online industry as distributed ledgers gain in trust among potential users. Here’s a look at the biggest trends to look for this year.

1. AR on the rise
It’s projected that half the world’s population will install some form of AR within five years, according to Digi-Capital, a Silicon Valley AR analyst. The returns will be in the billions, which is significant considering global augmented reality ad revenues registered just $166.7 million in 2017. By 2022 revenues from AR will reach $2.6 billion, with roughly a third of those revenues coming from virtual search.

Also in the sphere of augmented reality, games should make a strong comeback in 2019. After the wild success of Pokémon GO, which in 2016 became the fastest game to reach $1 billion in consumer spend, the AR games segment will be jump-started with the much-anticipated Harry Potter: Wizards Unite. When this free-to-play, location-based, AR game launches this year, revenues could exceed $100 million in just 30 days, according to industry standard analytics source App Annie.

However, it’s not just games that will benefit from AR. An increasing number of brands will call on AR to improve the consumer experience and deliver more practical uses. Some savvy brands are already doing this. An app by Ikea and Houzz allows users to preview products and redesigns in their homes. Another app by fare aggregator Kayak helps travelers identify through AR if their luggage fits safely into an overhead compartment.

2. Mobile Is King
AR will not be the only big story of the year. Notably, mobile will continue its takeover of digital advertising. In line with App Annie’s prediction that 60 percent more apps will monetize through in-app advertising in 2019, advertisers will continue shifting away from desktop to reach users on mobile devices.

This year, the mobile advertising market will exceed $200 billion globally, according to eMarketer. Apps will represent the lion’s share of ad spend. At the same time, video advertising will grow to be worth $37 billion, with mobile exceedingly becoming the platform of choice. Ad agency Zenith believes mobile ad spending will account for 30.5 percent of all global advertising expenditure by 2020 — not just digital.

3. It’s Time for Header Bidding
The way publishers sell and agencies buy advertising will continue to evolve in 2019. After entering the mainstream on the web, header bidding is now making strides into smartphone app environments. In header bidding, publishers offer their inventory to multiple ad exchanges simultaneously, as a way of getting rid of the “waterfall” approach that limited competition and prevented revenues from reaching their full potential.

Mobile has been the driving factor in overall header bidding growth, which saw a 70 % increase over last year, according to Pubmatic, thanks to mobile web volumes more than doubling. Mobile web and apps are different beasts, so when in-app header bidding finally becomes available to in-app advertising this year, transparency within the mobile advertising ecosystem will increase.

4. Blockchain Becomes Mainstream
Likewise, blockchain has the potential to increase transparency on the web. After various efforts to marry blockchain and ad tech, trust is developing through the ability of distributed ledgers to limit fraud. Because blockchain can provide advertisers and publishers with a trustworthy record of campaigns, this tool could resolve transparency issues in campaign reporting.

Until now, it has been difficult to integrate blockchain into ad tech as the open nature of the platform makes it prone to revealing sensitive data. However, a secure private ledger in tandem with a registry which stores IDs and metadata for all users could make a big impact in 2019.

5. Rewarded Advertising Brings Rewards
Rewarded video ads, where offer consumers something of value in exchange for viewing an ad, have been seeing increasing spend. This will continue in light of how positively users have been responding to this format.

Rewarded video, also known as opt-in exchange advertising, is now being used across the digital ecosystem. The “rewards” given to users include everything from shopping discounts through promo codes to giving bonus lives in games.

Mobile ad spending for this format on the Smaato platform increased fourfold in 2018, and we expect this growth to continue throughout 2019.

Among consumers, a joint study by OpenX, the Mobile Marketing Association and MediaMath found 80 percent of the audience prefers rewarded video over other types of advertising, and 65 percent would watch more ads if they were made more relevant.
Moreover, two-thirds are willing to watch a 15-second ad in exchange for retailer discounts, free streaming music or an hour of premium content. A similar number of viewers are able to recall brand ads that they saw on mobile. This shows this format offers high returns to marketers.

6. 5G Shows Promise (Eventually)
Finally, in our predictions for this year, we should look at 5G mobile connections. Though this technology won’t be widespread in 2019, the ad tech industry is bound to start planning this year for the future.

Speeds in excess of 20 times faster than current 4G networks offer marketers and publishers tremendous opportunities, especially in video. It would be safe to say that streaming larger, higher-quality videos will lead to a dramatic increase in a consumer’s time spent watching this format.

China is the country to watch here, being home to over a third of all current 5G mobile connections in the world. The process will take longer than this year, but one can be certain that 5G is inevitable.

Alex Khan

Alex Khan is the Managing Director APAC at Smaato.
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