AR/VR, connected TV, gaming and shoppable advertising are poised to become an increasingly important part of the digital ad mix over the coming years, writes IAB UK’s Jon Mew.

It won’t have escaped your notice that suddenly everyone is talking about AI – and not just in ad circles. A highly scientific poll of my friends revealed that I’m not the only one who has spent an hour or two trying to catch out ChatGPT (still trying), or creating a lifelike yet shinier version of myself via Lensa AI. Both products have helped to shift artificial intelligence further into the spotlight, sparking discussions about how we work with this next wave of technology – or make it work for us.

What’s notable is the reaction to the acceleration in AI. People are impressed and excited at what it can do, but there is apprehension about what it means for the future of our industry, our jobs and our society. It would be a bit weird if this wasn’t the case. AI taps into that basic ‘man vs machine’ dichotomy that has intrigued people for generations, prompting us to ask some very big questions about what it means to be human and what our relationship is with the technology that we’re creating. 

The rise of AI is a perfect example of how digital advancements can a) seem to happen really quickly and b) make people excited and uncomfortable at the same time. While this is particularly true for AI – which is already being used successfully by some advertisers – it’s by no means exclusive to it. Research that the IAB conducted last year set out to understand how marketers truly feel about digital, finding that the majority are overwhelmed by the pace of change across the industry; creating a sense that they have no control of it. 

This was a bit of a lightbulb moment for us at the IAB. Until this point, we had consistently positioned change within digital advertising as a positive, not knowing that we were adding to a sense that digital transformation is happening too fast for anyone to keep up with. 

Getting ahead of change

This is why we’ve started to do things a bit differently. While we’re still spotlighting and celebrating innovation within the digital ad industry, our focus is to help advertisers understand change, prepare for it and – ultimately – put them in control.

This was the logic behind IAB Compass, our latest research report produced with MTM, which focuses on four fast-growing digital channels – AR/VR, connected TV, gaming and shoppable advertising – to understand how they’ve evolved to date; explore the key trends defining growth; and provide forecasts for future spend. 

Each of these four channels is poised to become an increasingly important part of the digital ad mix over the coming years. The two most mature markets in the UK are gaming and CTV, which are forecast to more than double in size by 2026 to reach a combined total of £4.15bn. Meanwhile, AR, VR and shoppable advertising are poised to shift increasingly into the mainstream – following trends already well underway in the US and China. 

In short, IAB Compass is all about making these changes navigable so that advertisers can capitalise on new developments to resonate with their audiences in meaningful and creative ways. The same exploratory thinking underpins our flagship Engage event, which this year will be focused on AI to help the industry understand the opportunities and interrogate the challenges that this potentially game-changing technology presents. 

Deepening human connection

Yet while technology and the digital ecosystem will continue to evolve, successful advertising will always rest on one very simple facet: human connection. The ads that resonate are always the ads that tap into a shared truth to trigger recognition and emotion – making us smile, guffaw, lean in, sing along, show a friend or raise an eyebrow. I’d argue that the developments we’re seeing in digital are only enhancing advertisers’ ability to do just that.

In an era where media plans can encompass everything from AR activations to in-game audio, we have more creative ways than ever to make an impact, breathe life into a campaign, and forge human connections in immersive ways. 

This is why we need to ensure that advertisers are well equipped to navigate emerging opportunities and prepared for how they might develop. Yes, digital advertising moves fast but technology is ultimately useless unless it can come together with the ingenuity and imagination that our industry is built on. 

Now, if you’ll excuse me, I must get back to trying to outwit ChatGPT.