We have utilized our proven scenario approach to illustrate plausible futures in the global advertising market and shows how today’s market players might adapt to meet the many changes and uncertainties along the way. Continuing our series of studies, which began with “The future of the telco business model” and “The future of the TV and video landscape”, this is the third report in which Deloitte combines its technology, media, and telecoms expertise with the unique methodology developed by the Deloitte Center for the Long View.

The future of advertising affects very different stakeholder groups. Apart from traditional advertising world players, the transition is also fundamental for numerous new market entrants, largely with a technology and data stack. To provide you with a simple overview in this complex ecosystem, we have defined five archetypal stakeholders who will strongly shape the future advertising landscape. They are the protagonists in our four scenarios, each facing completely different challenges and opportunities in the different worlds:

• digital platform companies
• media companies
• agencies
• advertisers
• consumers

Our scenarios are based on a comprehensive set of underlying drivers that will potentially shape the future of the advertising industry. We generated these by interviewing experts and utilizing our unique external environment analysis based on Natural Language Processing algorithms. We then clustered the resulting drivers into social, technological, economic, environmental, and political factors, and rated them in terms of their relative uncertainty and impact on the advertising industry.

Four Scenarios for the Future of Advertising

As a result of our analysis, we have developed the following four scenarios for the future of advertising:

• Scenario 1: The Transactional You
• Scenario 2: The Creative You
• Scenario 3: The Entertained Masses
• Scenario 4: The Fragmented Masses

The four scenarios as video

These trends are changing the advertising industry

Our four scenarios reflect several critical uncertainties in the matrix. These drivers and their effects may differ from scenario to scenario, with each describing an extreme point of possible developments in the advertising market. In addition, we have identified seven factors whose development can be predicted with a high degree of certainty and which are relevant for all scenarios. These trends will shape the future of the advertising industry:

• Marketing clouds prevail
  Marketing clouds are indispensable elements in advertising processes, as they control the creation and management of marketing relationships and manage campaigns with customers. It will become standard to integrate solutions for customer journey management, email, mobile, social, web personalization, advertising, content handling, and analytics.
• Artificial Intelligence is imperative
  Artificial Intelligence is ubiquitous in the advertising space. AI supports decision-making and analyzes consumer behavior. Enriched with data about how consumers interact with advertising, it substantially optimizes campaigns to perform better. Implemented consistently and to its full extent, AI understands consumers better than they do themselves.
• Programmatic becomes universal
  Programmatic is the standard for digital advertising. Processes are fully automated in the context of purchasing and selling ad space and dynamically placing digital ads, and transactions take place in real time. Programmatic is an essential enabler for targeted advertising. Traditional processes involving RFPs, human negotiations, and manual insertion orders will vanish from the digital advertising space.
• “Context is King”
  Digital advertising is predominantly contextual. Ads are selected and placed by automated systems, based on ever more detailed user profiles and the content displayed. The increase in mobile and location-based advertising strengthens this trend.
• War for ad talent continues
  The continuing digitalization of advertising with new market players, changing job profiles, and a shift of power within the industry causes an enormous war for talent. Employers compete for experts with scarce, specialized skill sets. Demand for data scientists, analytics experts, and creative minds is huge at present and will remain high.
• Ad tech consolidates
  The once fragmented and heterogeneous supplier landscape within the ad tech segment will consolidate. Large ad tech players will acquire almost all their smaller but highly specialized competitors. The desire for improved services, additional scale, and more data is the main driver behind vigorous M&A activity. 
• TV loses its dominance
  After print, traditional linear TV also loses in importance. Large digital platform companies generate similar reach through video on demand, social, or messaging functionalities.
  

Download the study “The future of advertising. Pathways to survival in four scenarios” to learn more about the scenarios and the strategic fields of action for market players in the advertising industry.