2020 is promised to be the year of 5G — a year where mobile gets faster, IoT grows rapidly and our current version of digital gets a facelift.
Last year, we saw the long-awaited 5G begin to spread across the US. T-Mobile was the first to release 5G nationwide, while AT&T and Verizon released their 5G networks in smaller, more targeted areas. AT&T and Verizon will expand their 5G network across the nation this year.
5G is expected to be game-changing, especially for marketers and advertisers. This technology will facilitate faster loading times, HD video ads and more robust consumer targeting.
The Current State of Mobile Advertising
Mobile advertising is a multi-billion dollar industry. 81% of Americans own a smartphone, and roughly 20% are “smart-phone” only. This means they don’t have any other device connected to broadband internet in their home. These individuals purely rely on smartphones to access the internet.
To reach this audiences, advertisements need to be mobile friendly.
IAB found that advertising revenues delivered on mobile devices totaled $69.9 billion in 2018. The majority of ads on the internet (65.1%) go to mobile.
MediaRadar data found that:
- Over 20k companies bought mobile ads in 2019.
- Over 125 companies dedicated at least $1M in ad dollars to mobile ads.
- Top mobile advertisers include Tik Tok, NBC and Coca-Cola.
Mobile advertising is certainly not a new thing, but with the adoption of 5G, it is expected to be faster and more effective.
Lower latency means less lag and more opportunities
One of the biggest benefits of 5G is significantly lower latency — how long two devices take to communicate with one another. In simple terms, there will be less lag.
It is expected that virtual reality will work more smoothly, online gaming will be more synchronous and IoT devices will talk to each other immediately.
Advertisers will realize benefits in formats that they are already familiar with: video, programmatic and native ads. They will also be able to create high-quality, innovative video ads in conjunction with other technology, like AI-powered IoT devices.
“Video ads will even be able to change their storylines in mid-flow in response to a viewer’s responses, making it more customized to consumers’ individual preferences and needs, which in turn will push up engagement rates,” says Martin Salo, chief product officer and co-founder at Realeyes. Salo predicts that loading times will be 20 times faster than 4G.
The increased speed will give viewers a more enjoyable experience with mobile advertisements. eMarketer predicts that the digital video ad spend in the U.S. alone will rise to $22.8 billion.
5G is ‘post-smartphone era’
All the hype around 5G is not necessarily centered on iPhones. The excitement is about the possibility of better connected devices.
George Slefo at AdAge reports that some have dubbed 5G the ‘post-smartphone’ era, meaning that IoT devices and machines are taking center stage. By 2021, it is predicted that there will be 29 billion connected devices. These devices will not always be connected to broadband internet. They will connect to each other with machine-to-machine communication.
Julie Coppernoll, VP of global marketing at Intel, said to Slefo. “I think that is going to change. I think nothing will be ‘mobile’ anymore because everything will be mobile.”
4G was able to handle what we imagine as “smart” devices now, but the reality is that IoT has just begun. We will see developments in AR/VR, autonomous cars and smart cities.
Connected everything means improved targeting
Advertisers already have seemingly limitless consumer data at their fingertips, but the rise of connected devices means higher volume and higher quality data.
Advertisers are already experiencing a changing data ecosystem with new privacy regulations and Google dropping cookies. It is too soon to tell exactly what data they will have access to and what technology will best equip them to deliver highly personalized ads.
“To really harness all that new data flying around, it’s crucial to make sure all these various points are connected and used in the optimal way ” says Gavin Stirrat, VP of Partner Services OpenX. “That means the right infrastructure, the right technology partners, and the right kind of privacy measures.”
4G will still be in place for the foreseeable future, but advertisers need to have strategic conversations with the right stakeholders as 5G moves forward.
Advertising is evolving with 5G, but any new development comes with its challenges. 5G stirs up energy when it comes to faster loading times, high quality video, improved targeting and innovation. It still may be too soon to tell, however, how different vendors will manage data fragmentation, consumer privacy and new data ecosystems.