5G Could Make Traditional Advertising Less Relevant

"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Daniel Heer, founder and CEO at Zeotap.

A central topic at CES last month – which will undoubtedly become the next frontier for digital advertising – was the arrival of 5G.

It should be cause for marketers to celebrate because it will enable faster bandwidth, near-zero latency and, in turn, deliver more immersive, higher-resolution and premium experiences that will help brands better connect with (and not frustrate) consumers.

Once 5G arrives at scale, it will mean new opportunities for advertising. As a result, traditional display advertising will become less relevant.

In 2018, 5G rolled out in a few markets in Asia, including Seoul, South Korea, where telecom operator KT has been broadcasting TV content on consumers’ mobile devices and set-top boxes via 5G. In Qatar, Vodafone and Ooredoo have made 5G services commercially available across the country.

US telecom operators have started following suit, with Verizon, T-Mobile and AT&T implementing 5G in a few test cities, including Los Angeles, Sacramento and Houston. With that said, 5G is not expected to start replacing 4G in the United States until 2020.

Until then, we can dare to dream.

The promise of AR and VR realized?

There were estimated to be 171 million global AR and VR active users by the end of 2018, and the market is expected to become a $162 billion industry by 2020.

5G will be better equipped to handle this real-time exchange of video files, which opens up great opportunities for advertisers that become early adopters.

The gaming industry has been the first industry to adopt VR and AR, but others – such as travel, ecommerce, publishers and social media platforms – should already be considering ways to leverage these technologies to create more immersive advertising experiences. 5G will be even further enhanced by the use of haptic technology and suits, which replicate the sense of touch by applying vibrations or motions.

New media frontiers

With 5G, brands should be able to tap into self-driving car entertainment, real-time 3D holographic displays and other much-hyped new media. Americans spend on average 293 hours per year driving, according to AAA Foundation for Traffic Safety, which until now has been an elusive customer touchpoint for advertisers other than through billboards or radio ads.

Self-driving cars will completely change the game. If the hype does eventually pan out, over-the-top media service companies will also start extending their home entertainment packages to car entertainment. Advertisers will need to find a way to penetrate these new contexts.

3D holographic displays will also enhance advertising live experiences in incredible ways. Can you imagine Yankee Stadium without banners and flashy screens, and instead with 3D Pepsis and Red Bulls flying around during the game? 3D holographic displays could bring in a cumulative $43 billion in revenue, according to a 2018 report by Intel and Ovum.

Less ad blocking?

As ad experiences improve with 5G, we may actually see a decline in ad blocking.

In 2018, 5% of mobile sessions in the United States were blocked, compared to 2% in 2016, according to Audience Project. We may be able to slow this trend if 5G lives up to its expectations and eliminates slow page loads due to bloated ads.

Off-the-charts location data accuracy

We should expect extremely accurate location targeting with 5G, enabling real proximity advertising, which today is still a nascent field. 4G data can only really support aggregated movement or real-time transportation analytics use cases, which is why advertisers haven’t been getting their expected results. 5G will bring real-time, super accurate location data that will open doors to high-performance local and proximity marketing.

There’s also a good chance it will help prevent abuse in proximity targeting, where hacking is a real threat. Bad actors have been known to fraudulently suction up huge volumes of reward points by forging GPS data of visits to stores, for example. 5G's reliance on microcells could provide another means of verification to battle GPS spoofing, according to ZDNET.

Media consumption explosion

The report by Intel and Ovum also predicted that the average monthly traffic per 5G subscriber would reach 11.7 gigabytes (GB) in 2019 and grow to 84.4 GB in 2028, when video is expected to account for 90% of all 5G traffic. Time spent on video, music and games on mobile should significantly increase as 5G lowers the cost of internet packages and telecom operators offer affordable unlimited data packages. This trend will give advertisers more opportunities to deeply connect with customers.

5G is coming. Marketers and advertisers should start planning now and thinking big. As British 5G expert Adrian Braine told the Financial Times last year, “I think 5G is at least as significant and potentially more so than the internet.”

Further Reading - A Marketer's Guide To 5G

Follow Zeotap (@zeotap) and AdExchanger (@adexchanger) on Twitter.

 

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