Digital advertising is good, actually: how the industry improved in 2023

Opinion

It’s important to take a step back every now and then to take stock and celebrate our wins. Despite recent damning reports, there is a lot for digital advertising to shout about.

I’m sure I’m not the only one who sometimes questions their career choices.

For me, it’s usually when I’m hauling myself out of bed at 3am for an early flight, or looking at the draft of yet another call report when I can’t remember what I said, to whom I said it, or what I promised them (usually something that will make my product team want to restrict my customer access to the bare minimum).

So, I don’t mind admitting that when I read the results of the recent IAB UK report, The Digital Dividend, which showcases how digital advertising supports the UK Economy and society at large, it provided me with a welcome reminder of why I continue to do what I do (beyond paying the bills, that is).

So, what do the numbers tell us?

The headline figure is that the economic footprint of digital advertising in the UK stood at £129bn per annum in 2022, measured in gross value added (GVA), the measure of the value of goods and services produced in an area, industry or sector of an economy.

Our industry supports just over 2 million jobs, that’s one out of every 16 people working in the UK. For every £1 spent on digital advertising, £4.80 is delivered back to the economy in GVA, delivering a sales uplift of £73bn for UK businesses, £26bn of which went to small- and medium-sized enterprises.

It’s an industry that shares the wealth, too. Digital advertising saves UK consumers a total of £18bn a year — over £600 per household — by providing free access to online services. But there’s more to it than money: 87% of people in the UK communicate through ad-supported platforms, 70% read local news for free on an online news brand and 43% discover local businesses through online ads.

My mood restored by reading about digital advertising’s many contributions to life in the UK, I began thinking about other areas of positive progress this industry has made recently.

Working in digital advertising can sometimes feel like a problem-solving game of Whac-A-Mole.

So it’s important to take a step back from the game every now and then to take stock and celebrate our wins.

We’re more collaborative, efficient, secure, and sustainable

Following many damning reports on the lack of transparency in programmatic supply chains, collaboration between buyers and publishers is increasing, leading to a growing number of both supply and demand path optimisation (SPO/DPO) deals.

As a result, both ends of the supply chain — the buyers and the publishers — are seeing enhanced efficiencies, improved control over the trading process and a clear view of where marketing budgets actually land.

This push for transparency is vital for securing trust in advertising across the open internet, keeping it open and accessible by all.

Greater transparency empowers marketers by providing real-time insights into supply chain performance at the impression level, enabling informed decision-making, and ensuring that media plans are more considered while challenging the default of spending on the walled gardens.

As this collaboration between buyers and publishers intensifies, we are witnessing a systemic shift towards enhanced data-driven targeting on the sell-side. The result is more spend going to publishers that cultivate loyal and engaged audiences, supporting their vital contribution to society through high quality journalism.

Not only is programmatic becoming more transparent, it’s becoming more efficient as well.

The ongoing integration of AI in the programmatic automation of tasks such as bidding, targeting and optimisation is accelerating digital planning, bringing ever greater precision and real-time capabilities. This empowers advertisers to adapt quickly — crucial in this turbulent economy — tailoring advertising strategies based on variables like seasonality and real-time response signals to deliver campaigns that are more effective and relevant to their target audience.

Perhaps most importantly in the long term, all these efficiencies go hand in hand with sustainability.

After all, doing more with less is the fundamental principle of reducing carbon emissions, which the industry has embraced as a top priority. In the latest IAB Europe ‘Attitudes to Programmatic Advertising’ report, sustainability was listed as a strategic focus by 80% of respondents across the supply chain, with 57% of agencies seeing progress towards net zero.

2024 will bring more data, more platforms and more meaningful audience connections

The deprecation of cookies in 2024 will reinvigorate the goldrush for data, further fuelling the rapidly growing CTV and commerce media ecosystems and premium publishers that have been investing in their data activation strategies.

There is ample opportunity to expand audiences across these authenticated environments, expanding reach and scale without media owners sacrificing control over their data as they did in the height of the cookie era. Data collaboration between commerce media, CTV and the open web will provide advertisers with greater audience access without the audiences themselves being devalued

Not only will media owners retain control and ownership of their audience data, consumers themselves will see their data privacy respected in this new paradigm. Putting individuals firmly in control of what data they share and for what purpose means publishers and advertisers need to approach users with a mutually beneficial value exchange, whether that’s through personalised user experiences, reward schemes or exclusive benefits.

Despite macroeconomic challenges and geopolitical uncertainties, the digital advertising market has demonstrated resilience in 2023, with welcome increases in investment (though it could do with being more distributed outside of the duopoly). Yes, there are still plenty of challenges, but we can confidently say we, as an industry, are moving in the right direction. All we need to do now is stay the course.

Emma Newman is chief revenue officer EMEA for Pubmatic