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The future of display advertising is a reflection of today’s industry: current trends will gradually transform into tomorrow’s standards. Whether you’re a developer advertising an app, a website owner monetizing your site, or an advertiser promoting a product, studying the state of today’s advertising market will help prepare you for tomorrow’s changes.

Specialized Display Advertising Networks will Grow

Each time a new industry evolves, many competitors saturate the field. At a certain point, bubbles always pop. And at a certain point, companies realize the opportunities presented by niche markets.

Affiliate marketers, for instance, have been capitalizing on niche markets for years. However, as major niche markets became flooded and eventually full, newcomers began capitalizing on local markets. To this day, local markets and niche industries represent a large opportunity for affiliate marketers.

What does this have to do with display advertising?

When we look at the advertising world, we can see the same pattern. Big fish, such as CodeFuel, quickly dominated major  advertising industries, and developed the larger specialized ad networks.

One of the company’s major display advertising networks, DisplayFuel, serve as a good model for what we can expect from the future of display advertising. Rather than producing a broad, mass-appeal advertising service such as Google or Bing, DisplayFuel targets and solves a problem for a specific industry: the software advertising industry.

Display advertising networks of the future – just like affiliate marketers of today – won’t be able to penetrate fully saturated markets, such as search advertising or software advertising, which are already dominated by bigger fish. Instead, they will find a way to capitalize on smaller niche marketers that haven’t yet been conquered.

How Algorithms are Changing Everything

Another major change we’re seeing in display advertising is coming not from economic forces, but from advances in technology. Here are a few of the ways we’ll see algorithms change everything:

  • Programmatic media buying is changing the back end of advertising – Real-time bidding is the computer-driven negotiation of ad placement and pricing. Historically, for print advertising and television, for instance, this has been performed by humans.

But with the mass proliferation of online advertising, it is next to impossible for humans to keep up. Algorithms are quickly automating this function, and in the future, it is likely that all display advertising bidding will be governed by algorithms.

  • Personalization is changing the front end – In the same way that algorithms will drive the pricing and placement on the back end, the front end will also be driven by computers. They will use big data and customer profiles to optimize and deliver personalized content, more so than they do now.
  • Together, both trends meet in the form of turnkey marketing platforms – Due to the disjointed nature of the marketing ecosystem we see in 2014, 2015 will see more marketing and monetization platforms designed to make advertising easier. 

The Display Ads of Tomorrow

Tomorrow’s display ads will be customer-focused, and, as mentioned, highly personalized. There are many factors that will affect the evolution and the future of display advertising:

  • Apps will continue to take more time away from the web – The world wide web is losing ground to apps. Customers, on average, spend an average of 30 hours per month using apps, according to a Nielsen study. This increase in app market share is paralleled by a decrease in desktop web surfing, as well as mobile web surfing.

The implication, of course, is that display advertising – which is continuing to grow – will earn more money in apps than it will on the web.

  • New technology will increase advertising’s capabilities – Bandwidth usage is growing every month, and will only continue to increase over time. The more that people use streaming video on wireless devices and wearable technology, the more we’ll see display ads transforming into interactive ads, video ads, and so on. 
  • New customer data will enhance content value, advertising value, and marketing precision – The Internet of Things and its predecessor, wearable technology, are bringing with them vast troves of customer data. This data will be used to construct the detailed customer profiles that will allow advertisers to personalize their marketing campaigns on mass scales.

Deeper insight into customer psychology and the needs of individuals will also enhance the quality and precision of app content, web content, and advertising content. This suggests that the field will become highly competitive and even more complex than it is today.

The future of display advertising will continue to evolve from its present state. With the continued evolution of technology, we’ll see algorithms and automation drive the evolution of display advertising and the data that fuels it. But the future of display advertising isn’t entirely automated: human creativity and strategic know-how will continue to pilot the most successful advertising networks.