While tools such as bid strategies have now been around for quite a few years, these are becoming ever more sophisticated through taking into account a greater number of signals that advertisers don’t necessarily have visibility of (adjusting bids down now to every individual auction), in addition to features such as Responsive Search Ads, Smart Shopping and Performance Max campaigns. On the paid social side, having a tracking pixel or API is vital to not just measure performance but also provide the platforms with enough information so they can effectively serve ads to the right audience at the right time. 

With this in mind and it being clear that the automated route is the way that ad platforms are going, advertisers may be starting to think about how agencies, who have spent a lot of time and effort in building and optimising campaigns across platforms, fit into this.  A few years ago the historian Yuval Noah Harari painted a bleak picture of the future of advertising through writing about his thoughts on how Google will be able to effectively destroy the advertising industry it has helped create by having enough data to recommend products and services directly to consumers through its sophisticated algorithms, bypassing the need for advertisements. Whilst no-one knows exactly what the long term future will hold, over the next few years at least below are some reasons why it’s probably best not to tear up that agency contract just yet.

1: The tide is turning on the way ‘big tech’ uses its vast amount of data

It can be argued that ‘big tech’ companies such as Alphabet and Meta have brought massive benefits to society by making it easy to find relevant information online, stay in touch with friends and family all over the world, and bring communities together. Their business models however effectively rely on treating their users as their ‘product’ by using data from them in order to effectively sell ads online to advertisers to promote their products and services, with users in return getting to use these services for free. Over time this has meant companies have built up a vast amount of data on their users – an individual downloading their usage history would find documents that run into millions of pages of activity logs on their search history, location, app usage etc. 

Last year the digital marketing industry saw a seismic shift with the rollout of iOS14 from Apple which restricted tracking on apps such as Facebook, which limited their ability to collect data on their users to use for advertising, and recently wiped billions off of the value of Meta. This has meant that ‘big tech’ has had to adjust their strategies to start to become more privacy sensitive, affecting elements such as ad targeting. Agencies can help advertisers adjust to these platform changes through ensuring all their digital strategies take into these concerns whilst still driving effective results. 

Looking beyond the platform changes, consumers and governments have become increasingly aware and concerned about how their data is used and stored by these technology companies. From an advertising point of view, clampdowns on data collection will make ads less personalised to individuals, which will have a knock-on impact on campaign performance. Agencies will have a role here in finding increasingly creative ways to keep these ads relevant, which ties into the next point.

2: Reacting to external trends

Whilst the bidding algorithms are becoming more intelligent with the signals that they receive, any advertiser is still likely to want oversight of their activity particularly at certain key moments. For example, a company launching a major new product or service may want to give this a significant push through paid search advertising – relying on tools such as Google Dynamic Search Ads or Facebook Dynamic Product Ads are unlikely to give an immediate boost to coverage and as such more manual invention will be required. Other times that advertisers will still likely want more control will be over significant sales periods, such as a flash sale or key trading weeks (like the run up to Christmas for many retailers), or reacting to a new competitor who has entered the market. 

On a more macro-level external industry or global shocks will also mean more oversight to adjust campaigns and strategies – in late 2019 not many people were predicting a global pandemic and how this would up-end daily lives in so many aspects in 2020 and 2021, with one key change being a big acceleration in e-commerce sales and online events. Agencies can help advertisers stay on top of all of shorter and longer term trends and come up with strategies to adapt to these changes, which will keep the ads relevant and mitigate some of the effects of the targeting loss from the privacy changes.

3: The Media mix is changing

Individual platforms are changing in multiple ways with new ad products and features, but the way users are interacting with different platforms is also changing. In addition to announcing the hit to their profits from the iOS14 rollout (and Google following suit), Meta also recently announced that the amount of users on Facebook had actually declined, with consumers, particularly younger generations, switching to rival social media networks, with TikTok being the current platform of choice for Gen Z. Looking ahead the metaverse, virtual reality and interactive TVs will likely provide further advertising opportunities to tap into and connect with key audiences. Agencies can help here through staying close to all the media consumption trends and help plan budgets to ensure they are staying in touch with target consumers on the most relevant platforms.

To conclude, the journey towards ever more automation is well on its way and trying to resist the changes, for example by keeping to more manual campaign types, will limit advertisers in taking advantage of some of the benefits of newer features in addition to falling behind the competition.

Whilst it can be easy to only focus on the downsides of losing a certain level of control over ad campaigns, big tech still makes the vast majority of its money from advertising and will not want to alienate all their clients by creating products that become ineffective to use. No-one can say for  sure what the future of advertising will hold, for now the goal of the advertisers should always be around making sure that these tools work for them, rather than them working for the benefit of the tools. Agencies can certainly help advertisers navigate this journey.