In the latest in our series of predictions pieces running between Christmas and the New Year, Gavin Stirrat, VP of partner services, Europe at OpenX, says that 5G holds the potential to accelerate the evolution of digital advertising.
Momentum is building behind the much-anticipated introduction of 5G mobile connectivity, but the date of its ultimate arrival in the UK is still unclear. Mobile networks appear to be on target for a rolling 2019 launch, with Vodafone testing in multiple locations and EE announcing it will bring 5G to 16 major cities by next December.
Smartphone manufacturers are differing in their approach; with Samsung gearing up to launch a 5G-enabled device in the US next year and Apple delaying its release until 2020. At the same time, the UK government is investing £6.8bn in digital infrastructure projects over the next three years to help it achieve its goal of deploying 5G to the majority of the country by 2027.
While the timeline for 5G implementation is still undefined, its arrival is inevitable. As is the enormous economic influence the unprecedented levels of secure, instantaneous connectivity will have, with its worldwide impact in new goods and services estimated to reach $12 trillion (£9.5 trillion) by 2035, according to the World Economic Forum. One industry that will be immediately and directly affected by the arrival of 5G is digital advertising. So how will next-generation connectivity accelerate evolution in advertising?
Enhanced responsiveness improves experience
Latency is still a major issue in digital advertising, with slow page-load times preventing brands from delivering seamless ad experiences and causing some users to resort to ad blockers. The introduction of 5G will dramatically increase the pace of the digital experience, delivering response times of around 1 to 2 milliseconds that will ultimately eliminate latency and significantly improve the user experience. The knock-on effect will improve the entire digital ad experience, halting ad blocker adoption and opening up more audiences for brands.
Accessibility of innovative ad formats
The main benefit 5G brings is speed, with standalone 5G networks expected to achieve browsing speeds over 1 gigabit, compared with 45Mbps on the fastest 4G networks today. To put that in context it takes over seven minutes to download a full HD film over 4G today, whereas it will take less than 40 seconds on 5G.
These exceptional speeds, along with reduced latency, will allow advertisers to use more data-intensive applications, and embrace innovative formats that are currently out of reach, providing more meaningful engagement opportunities.
Augmented reality (AR) where virtual objects are introduced into the real world, and virtual reality (VR), where consumers can physically inhabit an entirely computer-generated world, will become mainstream in digital advertising, alongside other formats that haven’t even been considered yet. Vodafone’s landmark holographic call in September provides just a small taste of what’s possible with 5G.
An explosion of next-generation devices
The advent of 5G means much of the processing that currently takes place on mobile devices will shift to the cloud, making devices smaller, cheaper and more efficient in terms of battery life. This shift in computing power will speed up the development and adoption of Internet-of-Things (IoT) devices – from wearables to smart home gadgets – and compel advertisers to think beyond smartphones. In 2019, advertisers will need to adjust their strategies and consider how to reach consumers across a variety of next-generation connected devices that won’t necessarily have traditional screens.
Advanced targeting across all 5G devices
It’s not just shiny new IoT gadgets that will take advantage of 5G connectivity; established devices such as desktop or laptop computers and connected TVs will, too. Switching connections from broadband to 5G mobile connectivity, these devices will benefit from 5G’s unprecedented speeds. For advertisers, this means an influx of additional information – including granular location data – that will enable advanced targeting across a greater range of channels than is currently possible. Assuming the right privacy measures are in place, this will allow access to a greater addressable audience.
At the very minimum, the arrival of 5G will improve current advertising experiences by reducing latency and increasing browsing speeds, but it will also break down barriers to deliver the meaningful digital interactions advertisers only dreamed of creating. It will enable them to embrace new data-intensive applications such as AR and VR, to reach consumers across an explosion of next-generation devices, and to apply advanced targeting across multiple new and existing channels. It may not be clear exactly when 5G will become a reality in the UK, but in 2019 the industry should prepare for it, as the technology stands to accelerate the evolution of digital advertising.