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Roman Vrublivskyi, chief executive officer at Smart-hub.io, explores how the ad tech advertising market in Western Asia and Lebanon is expected to develop and which trends are expected to dominate the digital landscape in 2023.

The only constant thing in this world is change, said Heraclitus — these days, words of a Greek philosopher are spot on like never before. Global events have turned our lives upside down in the past few years.

The impermanence of global economics, socio-political turbulence, pandemic, and finally, the global recession that spanned different industries have affected all spheres of our life. In many regards, these changes redefined the way we consume digital content, which, in turn, drew enormous technological changes as tech providers started to adapt.

Regarding programmatic and ad tech advertising markets in Western Asia and Lebanon, it is expected to grow significantly in the coming years, driven by increasing investment in digital advertising and the growth of e-commerce in the region.

Let’s explore how it will happen and which trends are expected to dominate the local digital landscape in 2023.

White Label Solutions

This concept has been around for some time, but in 2022 it gained a new level of popularity as many entrepreneurs ended up with limited budgets after the pandemic. In such realms, businesses wanted to start easily, without many risks, and with tremendous investments associated with new business niche entries.

In Western Asia, many advertising businesses acquired programmatic capabilities for the very first time — the capabilities thanks to which media buying is getting automated and optimized in real time. Thanks to precise targeting and optimization, programmatic gained huge success worldwide — in fact, more than 70% of all digital ads are bought by advertisers programmatically. Major markets in Western Asia, such as Saudi Arabia, the United Arab Emirates (UAE), and Qatar, have also seen an increase in the adoption of programmatic advertising. Technology companies and advertising agencies have established a presence in the region to tap into this growth. The potential that marketing and advertising companies can reach in the Western Asia region is really outstanding as local society is growing more connected and socially active.

However, building a programmatic platform from the ground up is a challenge for companies that don’t have sufficient knowledge, expertise, and funding.

Many advertising agencies now add a programmatic component to their services, but it appears difficult without external help. At the same time, there’s a way that many companies in Lebanon and Western Asia have embraced to ease their entrance into the RTB (real-time bidding) world.

The most popular way is deploying a White Label solution that is simple and straightforward, like a zero-code platform. White Label refers to a ready-to-use programmatic platform that can be adjusted and customized to fit a particular brand’s needs. The days when only large companies could afford to create their own programmatic platform are gone; with such an innovative model, startups quickly create stable self-branded platforms (up to a few weeks), big technology providers benefit from win-win collaboration and an additional source of income.

Embracing Automation

Automation streamlines processes and frees up resources for further business growth. With advancements in machine learning and AI, automation has become increasingly prevalent in programmatic advertising.

Neural networks, big data insights, and GPT-3 are some of the key technologies worth mentioning. They will continue to be relevant in 2023 as they reduce the need for manual labor and improve sales efficiency. Many brands already utilize AI in advertising, recognizing it as a valuable and timely investment.

Automated bid assignment, for instance, enables automatic bidding for keywords and ad groups. This saves time and optimizes the cost per conversion, resulting in an increased return on investment (ROI).

The automation of advertising processes has already had a significant impact on the landscape of Western Asia. As one of the trendiest things in advertising, programmatic has contributed significantly to this.

Predictions for Western Asia Ad Market 2023: (Statista)

• The ad spend will hit the bar of $7.52bn;
• Search advertising will become the biggest segment, with an overall worth of $2.82bn;
• The ad spend per user is expected to reach $15.30;
• Over 47% of total ad spend will originate on mobile (2023-2027);
• Over 88% of the Digital Advertising revenue will come from programmatic (2023-2027).

Predictions for Lebanon Ad Market 2023: (Statista)

• In Lebanon, the ad spend will hit the bar of $301.80m;
• The banner advertising will account for $111.10m;
• The ad spend per user on social media is expected to reach $24.37;
• Over 46% of total ad spend will originate on mobile (2023-2027);
• Over 92% of the Digital Advertising revenue will come from programmatic (2023-2027).

Embracing Contextual Experiences

For a while now, there have been speculations about Google ending support for cookies. The original deadline was set for the second quarter of 2022, but it has been postponed several times and is now slated for 2024.

This gives advertisers some time to plan their next move.

Third-party cookies play a crucial role in various aspects of advertising, including targeting, frequency control, measurement, and attribution. But with the impending end of support from Google, advertisers, including those of Western Asia and Lebanon, need to find a replacement.

In this scenario, proprietary data can be a valuable source of information, providing insights into user preferences and purchase patterns.

Contextual advertising is not a new concept, but with the decline of third-party cookies, we can expect the rise of new technologies that will rely more on contextual signals of the page instead of the personal data of each taken user.

These changes will significantly impact online advertising in Western Asia and Lebanon in particular. They will prompt marketers to experiment with new ad delivery methods while maintaining user privacy. On the bright side, these reforms are a positive development for users’ privacy which will increase their trust in brands.

DSPs and SSPs are Becoming More Similar

As DSPs and SSPs continue to evolve, they are becoming more alike and blending together. For instance, The Trade Desk, a leading independent DSP, recently introduced its OpenPath initiative, which offers direct integration with premium publishers.

On the other hand, SSPs partner more with media agencies, a relationship that DSPs once facilitated. For example, PubMatic, which used to be a conventional SSP, reported that it generated 27% of its fourth-quarter revenue in 2021 by serving as a DSP and assisting advertisers in buying higher-quality displays.

Another example is Integral Ad Science, an ad verification company that has started functioning more like a large SSP thanks to recent advancements. As software platforms aim to diversify their business models in 2023, they are creating their own inventory ecosystem that brings together buyers, sellers, and publishers on a single platform and makes it more coherent, efficient, and transparent.

With this, it is worth pointing out that advertisers in Western Asia and Lebanon will be struggling from the shortage of data like the rest of the world (after shut down of cookies and tightening international privacy regulations). For this reason, creating mutually beneficial data collaborations between publishers and advertisers will also be important, like never before.

The Rise of Digital Out-of-Home Advertising (DOOH)

As the COVID-19 pandemic becomes more controllable in 2023, more people will venture onto the streets, catching the opportunities to be addressed by outdoor ad messages. For example, digital out-of-home advertising has regained momentum and growth, with spending expected to reach $15.9bn in the US by 2027.

When it comes to Western Asia, DOOH advertising is not that popular there yet, as building the infrastructure for interactive outdoor ads is very difficult and demanding. Still, even with this, DOOH is expected to register significant growth in many countries worldwide, including Western Asia.

In Lebanon, Programmatic DOOH provider Pikasso recently partnered with two supply-side platforms to enable programmatic DOOH transactions on the outdoor screens. Picasso’s 128 interactive screens, which are placed in more than 8 of Lebanon’s shopping malls, provide users with immersive advertising experiences, as they will be fueled by valuable targeting data.

Such technology leverages the strength of programmatic advertising to let the advertisers benefit from targeted, highly relevant, and measurable campaigns. This way, for example, the digital screens may display ads with umbrellas when the weather is rainy or show how many rental cars are left in store in the local shops for tourists who have just arrived in the country (at the airports) and so on.

As more and more digital providers like this appear in Western Asia and Lebanon, advertisers will be able to serve omnichannel and highly relevant ad campaigns to their audiences when they stay out of the home.

Advertising in Mobile Games

The video game industry has been continuously growing since 1997 and is currently estimated to be worth $196bn. Additionally, a significant portion of the US population, including 67% of adults and 76% of children under 18, play video games, making it a lucrative advertising market.

Mobile gaming area represents a huge opportunity for Western Asia advertisers, according to Statista:

• The revenues in this sector will hit the bar of $3.09bn by the end of 2023;
• The growth trajectory of revenues will have (a CAGR of 2023-2027) 7.14%, which will account for $4.07bn by 2027;
• The number of mobile gamers will reach 49.7m by 2027;
• The average revenue per user will reach $71.52 by the end of 2023.

The equivalent statistics were gathered by Statista for Lebanon, which indicates the rapid growth of mobile gaming in these areas.

In-game advertising presents an opportunity to monetize video games, from small indie projects to large corporations with multiple projects, allowing them to generate additional income. One unique aspect of video game advertising is its ability to enhance user engagement through gameplay.

Rewarded videos, for instance, offer players a reward in the form of in-game currency for watching a video. Over 62% of developers have reported an increase in user retention after implementing these types of video ads.

The effectiveness of rewarded ads in games can be further optimized with targeted experience, as users are more likely to have a positive impression of both the brand and the game if they find the ad useful and receive bonuses for viewing it. So if you’re considering entering the world of in-game advertising, 2023 is a great time to start learning more about it.

CTV and OTT Marketing

The COVID-19 pandemic has led to a significant increase in the use of CTV and OTT devices for consuming content globally. In 2022, 92% of households in the US could be addressed via CTV. The most compelling statistic comes from Statista, which reports that 73% of households prefer to watch free, ad-supported content.

We should remember that Lebanon has 9 TV broadcast stations that reach more than 97% of the adult audience and are heavily influenced by political parties. This certainly sets a threshold that brands need to overcome in order to advertise on linear TV.

At the same time, the number of users streaming video content via the Internet is expected to amount to 0.8m by 2027. Thus, the revenue from SVOD here is projected to reach $7.81m by the end of 2023. Overall, in the Western Asia region, the number of SVOD viewers will grow to 33.6m by 2027, with revenue in this segment projected to reach $1.05bn by the end of 2023.

This suggests that advertising in the CTV and OTT space will be more relevant in the years to come. For advertisers and small brands, it is a sure big chance. Instead of scheduling ads on linear television, which is really hard and expensive, they can set up campaigns on programmatic CTV platforms to address viewers on big-screen Smart TVs or Internet-connected devices (on which content is being streamed).

The Last Word

In conclusion, 2023 is shaping to be a year of significant growth for programmatic advertising, which definitely applies to Western Asia and Lebanon in particular. White Label business concept, SVOD, in-game mobile advertising, DOOH, OTT, and CTV are the big trends that will soon penetrate the local markets, delivering outstanding advertising opportunities for brands and advertisers. As the world recovers from the pandemic and technology continues to advance, there will be many exciting developments and changes to look out for. Stay ahead of the curve by following the latest industry news on our blog.

Roman Vrublivskyi is the CEO of SmartHub white label ad exchange