5G is coming and will change digital advertising in more ways than you think
4G brought about video streaming, app stores, programmatic auctions and an entry point into the world of virtual reality, augmented reality and artificial intelligence. With 5G, experts say advertisers and publishers should expect much more.
Imagine hopping in an autonomous vehicle and calling up Amazon Alexa to prep for dinner. A holographic display appears on your dashboard and directs you through the steps of a recipe, based on your diet preferences and meal history, as you drive to Whole Foods to pick up the ingredients, which are already being assembled robotically.
That is a (realistic) vision of the future with 5G, according to Scott Singer, managing director at consultancy DDG. Singer and other experts say 5G brings with it the ability to process and exchange more data at higher speeds, so advertisers and publishers can expect to see faster ad-load times on desktop and mobile and more connected devices.
Today, when a visitor to a website clicks a link, there is a slight delay before a server responds, resulting in milliseconds to seconds of nothing apparently happening. It’s an issue that causes visitors to click away from an article or site, and one reason behind the adoption of ad blockers, according to a study by the Interactive Advertising Bureau. But 5G will effectively eliminate that delay, said Jeremy Lockhorn, vp of experience strategy for mobile and emerging technology at agency SapientRazorfish, resulting in faster ad-load times and happier users. The FCC states that 5G is 1,000 times faster than 4G with 100 times less latency. Singer said he wouldn’t be surprised if the use of ad blockers begins to diminish because of webpages loading at quicker speeds.
At the same time, 5G will be able to process more data, allowing for the use of higher-resolution ads, such as 4K video, and furthering advertisers’ ability to personalize content in real time.
“5G is an evolutionary step,” said Charles Hu, chief technology officer at PMX Agency. “What it allows us to do is have a more stable and faster exchange and retrieval of data, so we can do more complex advertising.” Hu predicts that with 5G, mobile devices will have just as much power to interpret data as servers, delivering content instantaneously instead of having to go through a server.
With faster load times and higher resolutions, advertisers and publishers predict a new range of ad formats and pricing options.
“Getting really granular with retargeting and hypertargeting is possible right now, but the depth of how we can communicate to consumers will expand, and with the expansion, comes more premium options,” said Chris Neff, senior director of innovation at agency The Community, which works with clients like Domino’s, General Mills and Converse.
While these abilities might seem like a win-win-win for advertisers, publishers and audiences, programmatic auctions will have to keep pace with the speed of 5G.
“The programmatic auction process will have to change and improve in order to be able to take advantage of the speeds in which data will be processed,” said Singer.
Higher speeds will ultimately affect more than just mobile and desktop screens. Internet-connected devices will become more entangled than ever before, and advertisers will be able to personalize their messaging to any device or screen, no matter the time or place.
“5G is the tech that’s going to make all the new tech that everyone is talking about happen,” said Singer. “AR, VR, AI, [internet of things], including driverless cars, all those things need incredible data speed to actually happen on a public network.”
Then, there’s the out-of-home opportunity. Andy Sriubas, chief commercial officer at out-of-home advertising company Outfront Media, said Outfront will rely on 5G to distribute dynamic video to those screens, which will be able to react to commuters. “Brands will be able to talk to consumers in real time through OOH networks as opposed to publishing from a batch system,” said Sriubas.
Already, the U.S. market is ramping up for the delivery of 5G, as consumer demand grows for 4K video, instantaneous experiences and limitless connection. AT&T is one company leading the charge. Its recent acquisition of Time Warner and ad tech firm AppNexus are all steps the telecommunications company is taking to fully capitalize on the 5G service it aims to roll out to a dozen markets by late 2018. Verizon, Sprint and T-Mobile are also determined to be part of the race to get 5G onto consumers’ devices.
But the effort doesn’t come cheap. On Wednesday, Sprint and T-Mobile contended before a Senate subcommittee that their proposed merger is needed to compete in 5G because they lack the resources to challenge AT&T and Verizon on their own. Sprint Executive Chairman Marcelo Claure testified that alone, Sprint would need to spend around $25 billion to deploy 5G just in highly populated areas.
For this reason and the fact that hardware that can handle 5G still needs to be developed, Neff said marketers should expect 5G’s impact on advertising to be minimal in the next year, but that there’s the potential for “massive change” after that.
Still, companies are already establishing partnerships with these carriers to ensure they are well-positioned for 5G’s emergence. This week, independent esports company ESL, which produces video game competitions worldwide and streams them to platforms such as Twitch, worked with AT&T on a plan to incorporate 5G technology into live gaming. At the E3 conference in June, ESL tested AT&T’s 5G technology. Outside the U.S., China Mobile is working with HTC to produce 5G-powered VR devices.
As 5G becomes the norm, expect companies to run their entire businesses on it. Hu said PMX Agency was already on the cusp of going wireless this year, but when 5G comes to fruition, it will be the perfect opportunity to disconnect from the wall and poor-quality Wi-Fi.
“With 5G, you don’t need Wi-Fi or a wire,” he said. “You can go straight to the 5G provider because it’s that fast.”
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