International Journal of Advertising

The Review of Marketing Communications

ISSN: 0265-0487 (Print) 1759-3948 (Online) Journal homepage: https://www.tandfonline.com/loi/rina20

Digital advertising: present and future prospects

Heejun Lee & Chang-Hoan Cho

To cite this article: Heejun Lee & Chang-Hoan Cho (2019): Digital advertising: present and future
prospects, International Journal of Advertising, DOI: 10.1080/02650487.2019.1642015

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INTERNATIONAL JOURNAL OF ADVERTISING
https://doi.org/10.1080/02650487.2019.1642015

ARTICLE

Digital advertising: present and future prospects

Heejun Leea and Chang-Hoan Chob
a
Department of Communication, Daegu Catholic University, Daegu, South Korea; bDepartment of
Communication, Yonsei University, Seoul, South Korea

ABSTRACT ARTICLE HISTORY

New digital technologies have dramatically changed the way Received 2 July 2019
firms communicate and interact with consumers via digital media. Accepted 5 July 2019
In this digital era, what does the future of advertising look like?
How can scholars enhance research on digital advertising? And
how can firms and agencies maximize their return on advertising?
This article defines digital advertising by examining what it is—
and will be. We identify key trends relevant to digital advertising,
such as a move toward data-driven marketing communication,
the impact of artificial intelligence on advertisement production,
and the effect of big data on advertisement execution. In the
context of these trends, six propositions are posited concerning
the management of future digital advertising and the methods
and systems for delivering targeted advertisements to consumers.
Several topics that can be widely applied to digital advertising
are proposed for future research.

Introduction
We are currently riding the wave of the most dynamic change in human history—the
Fourth Industrial Revolution. Scholars claim that the Fourth Industrial Revolution will
be realized by the combination of numerous physical and digital technologies such as
artificial intelligence, AR, VR, machine learning, and cloud computing (Schwab 2016).
Combinations of these technologies have driven the new industrial revolution and the
transformations, which can be termed digital transformation.
In general, digital transformation is defined as an effort to secure competitiveness
by leveraging digital technology to adapt to the changing business environment (Cho
and Lee 2018). Digital transformation is the source of such changes. In fact, things
that used to exist only in analogue form have now been converted to digital form
(e.g. music, video, and photos), digital representations, or transitions (e.g. books, shop-
ping, and sensory experiences). The spread of digital technology has also had a major
impact on the media sector. The rapid change in the media landscape brought about
by digital transformation has blurred the boundaries between and domains of diverse
advertising media (Lee and Cho 2019). In this context, the term digital transformation
(or conversion of media from analogue to digital) implies more than only a change in

CONTACT ccho@yonsei.ac.kr Department of Communication, Yonsei University, Seoul, South Korea.

ß 2019 Advertising Association
2 H. LEE AND C.-H. CHO

the way of media transmission or technological advancement that simply improves

the picture quality; rather, it covers a holistic view of business strategy and new ways
of thinking to transform businesses to upgrade the strategic mindset (Cho and
Lee 2018).
An important attribute of this new media environment is that it can go beyond
time and space. While the consumption of traditional media occurred in defined
blocks of time, consumers nowadays can be reached at any time through mobile devi-
ces as they carry their mobile phones almost everywhere (Taylor 2009). Consumers
can now consume almost any content that media produces and delivers, anywhere
and anytime. The rate of adoption of digital media has accelerated due mainly to
increasing Internet and mobile phone usage (Truong, McColl, and Kitchen 2010). The
ubiquity of mobile-based communications creates new opportunities for marketers to
advertise, build consumer relationships, and receive responses directly from customers
(Andrews et al. 2016). For example, the transmission mode of advertising messages
has shifted to mobile devices, and messages reach consumers directly without having
to be delivered through traditional channels, thus enabling consumers to dir-
ectly respond.
Global digital ad spending is estimated to rise by 17.6% to $333.25 billion in 2019,
and the digital advertising budget in the United States will surpass that of trad-
itional advertising, which includes television advertising for the first time
(eMarketer 2019). This implies that digital advertising will account for roughly half
of the global advertising market by the end of 2019. While the rapid growth
observed in the digital advertising sector is not unique, it is not easy to define
digital advertising precisely. Until now, the academia and industry have used vari-
ous terms interchangeably, such as online advertising (Barnes 2002; Truong, McColl,
and Kitchen 2010), internet advertising (McMillan 2007), interactive advertising
(Cheng et al. 2009; Leckenby and Li 2000; Taylor 2009), and digital advertising
(Barnes 2002; Taylor 2009, 2019; Truong and Simmons 2010). It is crucial that the
concept is clearly understood, and there should be no ambiguity when these con-
cepts are used. Although this is a desirable objective, it seems that this concern
has not received adequate attention in the literature. Moreover, authors commonly
use these terms without distinguishing between them and, in most cases, without
sufficiently explaining the perspective from which the terms are used. In the pre-
sent article, to avoid misunderstanding, we try to clarify the concept of digital
advertising and explicitly distinguish it from other terms.
Digital advertising has often been used in combination with the concepts of
online advertising or Internet advertising. For example, according to IBIS World
(2016), digital advertising is often referred to ‘promotional messages delivered to
consumers through online media outlets’. Digital advertising is similarly defined as
online advertising through platforms designed for mass consumption (Virgile et al.
2016). Collectively, these and other similar studies point out that digital advertising
uses interactive technologies in media to enable marketers to deliver an enhanced
brand experience (Cho and Lee 2018; Taylor 2009). Considering the various con-
texts digital advertising is used in, how can we interpret it broadly, or precisely
define it?
 INTERNATIONAL JOURNAL OF ADVERTISING 3

The practical need for a universal definition of digital advertising has not yet been
critically recognized. The synonymous use of these terms did not lead to problems or
confusion when advertising through Internet was the mainstay of digital advertising;
however, the emergence of new forms of advertising has made it difficult to define
the term. In other words, the use of various new digital media such as IPTV, digital
signage, VR, and AR has broadened the implication of the term, blurring the lines
between online and offline media. For example, digital signage, a new digital out-of-
home advertising platform, is a convergent medium of digital advertising that has
evolved from a traditional offline medium (Lee and Cho 2019). Consequently, the
terms online advertising or Internet advertising should no longer be considered valid
because of their lack of conceptualization about advertising utilizing digital media. As
discussed later in this article, the definitional differences can be attributed to the fact
that in the age of media convergence, many kinds of media exist through which
advertising content can be delivered, and that the content itself can take various
digital forms. Thus, the key problem is that previous definitions of digital advertising
only partially reflect its current domains.
Undoubtedly, the proper way to understand digital advertising involves first under-
standing the main characteristics of digital media. The most prominent attribute of
digital media is perhaps interactivity. In the initial days of interactivity research,
Truong, McColl, and Kitchen (2010) asserted that increased levels of interaction
between advertisers and consumers are essential in advertising though digital media.
Scholars have confirmed that digital advertising approaches that incorporate inter-
activity are more successful than those that do not (Cho and Lee 2018; Shin, Chae,
and Ko 2018; Taylor 2009). After reviewing the digital advertising literature, we con-
clude that the meanings of the aforementioned similar terms (i.e. online advertising,
internet advertising, and interactive advertising) are blurry. This blurriness is related
mainly to the element (or dimension) of interactivity and/or the understanding of the
term ‘digital’ that is being applied.
Scholars who use these terms have recently suggested a new view of digital adver-
tising: smart advertising. What exactly do they mean when they describe advertising as
‘smart’? A few general characteristics make ads ‘smart’. For example, smart advertising
incorporates efficient advertising techniques based on digital technologies such as tar-
geted advertisement display and the delivery of time- and/or location-sensitive mes-
sages (i.e. personalized or adaptive content) to intended recipients through marketing
communication (KISDI 2017). Nonetheless, the term ‘smart advertisement’ still seems
to be unfamiliar in the advertising industry. Furthermore, the definition of the term
‘smart’ itself is unclear because it generally refers to the ‘smartness’ concept in adver-
tising executions. In sum, adopting the concept of ‘smart’ to offer a new universal def-
inition of digital advertising seems reasonable, but not sufficient. Consequently, we
believe there is some reluctance to use the term ‘smart advertising’ or to replace the
term ‘digital advertising’.
Despite the difficulty in defining digital advertising, we will try not to ignore previ-
ous definitions or to redefine it in brief. In this article, we identify several characteris-
tics of digital advertising that distinguish it from online advertising, internet
advertising, interactive advertising, and/or smart advertising. If these distinctions can
4 H. LEE AND C.-H. CHO

be agreed upon, it would be easier to conceptualize what digital advertising is and

what it might be. We therefore propose that digital advertising refers to a message of
persuasion (regarding products, services, and ideas) that interacts with consumers
through digital media. We also posit that digital media should include not only trad-
itional online media (e.g. Internet) but also all interactive media—including offline
channels—to broaden the comprehensive meaning of digital advertising [e.g. digital
signage, IPTV, over-the-top services, smart TV, tablet PC, smart phone, SNS, VR/AR plat-
forms, in-game advertising, advergame, digital PPL, multi-channel networks (MCNs),
and AI speakers.

Data-driven marketing communication

As the media change, so does the consumer who uses them. Therefore, the mar-
keting communication strategy—including advertising that communicates with the
audience through the medium—must also change. The most important characteris-
tic of digital media is that it allows for all brand experiences that occur at the
point of contact between consumers and brands to be recorded (Cho and Lee
2018). The availability of detailed consumer data is a precondition for a data-driven
marketing communication (Mulhern 2009). Therefore, limitations in the availability
of consumer databases have been overcome by frequent-shopper databases (Chen
and Zhou 2018). These records are digitally stored and analyzed, and used in mar-
keting strategies to better match customer requirements. Data from various sources
such as e-mail marketing, digital content (e.g. web sites, blogs, podcasts), social
networks (e.g. Facebook, Instagram, Twitter), and mobile ads have added been ana-
lyzed for and added to the understanding of marketers (Cho and Lee 2018). We
call this data-driven marketing. It refers to the process of collecting, integrating
and analyzing customer data to inform and optimize the ways in which marketing
activities are carried out (Cho and Lee 2018). It ensures that decision making or
judgment related to marketing activities is done through data, not personal intu-
ition and experience.
Big data in particular functions as the basic driver of artificial intelligence, which
has been considered the core technology of the fourth industrial revolution (Chen and
Zhou 2018). In other words, the technology that analyzes and utilizes big data is the
key to improving machine learning ability as it facilitates more appropriate decision
making based on the data analysis and learning results. As detailed and precise data
on consumers become increasingly available, the future of digital advertising is
expected to lie in more personalized communication. Reflecting this expectation,
today’s top firms, such as Google, Facebook, Amazon, and Netflix, have been operat-
ing or acquiring big data and artificial intelligence companies for a long time. Thus,
big data is emerging as an essential element for the success of the fourth industrial
revolution, including in artificial intelligence, the Internet of Things, block chain, the
robotics industry, and autonomous vehicles. Based on this discussion, we pro-
pose that:
P1: Big data will play a more pivotal role in digital marketing communication.
 INTERNATIONAL JOURNAL OF ADVERTISING 5

P2: Advertising messages will be increasingly targeted and personalized advertisement

will make consumer experience better and will be a key driver of revenue.

AI-assisted innovation on advertising production

As discussed, big data has already had a significant impact on advertising, in both aca-
demia and industry (Chen and Zhou 2018). Many in the industry assumed that adver-
tising creatives would not be replaced by big-data-fueled artificial intelligence.
However, data-driven decision-making is being introduced in advertising production
as well. In fact, when selecting a celebrity model for advertisements, it is becoming
more common to adopt decision-making methods that use data rather than the top-
down method (i.e. selecting the model desired by the advertiser) as was done in the
past. Instead, by analyzing online social media buzz, agencies can select a model who
is expected to appeal most to the target audience, or use a model that best fits the
consumer or product image (Heraldcorp.com 2019).
Advertising production no longer relies on personal intuition and experience, and
advertisements are instead produced based on data. For example, Publicis Groupe
recently unveiled Marcel – named after Publicis Groupe founder Marcel Bleustein-
Blanchet – an AI-powered innovation platform that comprises 80,000 employees world-
wide (publicisgroupe.com 2018). One of its key functions is ‘connectivity for knowledge’
and, to that end, Marcel provides multiple ways for each employee to contribute to an
ongoing project or pitch presentation. Specifically, the platform recommends individuals
to pitch ideas. Furthermore, Marcel has access to employees’ calendars and is able to
make recommendations that take the person’s workload and availability into account
alongside behavioural patterns, desires, and needs (publicisgroupe.com 2018).
In addition, dynamic creative optimization (DCO) maximizes the effectiveness of
advertising by adapting advertising creatives in real time to consumers’ interests. For
example, by setting up creative elements (ad copy, product image, colour, banner
size, banner position, etc.) in advance, agencies can figure out the best creative com-
bination that would facilitate acquiring the best results through real-time A/B testing.
Therefore, we posit that:
P3: The production of low-cost mass-produced advertising will be carried out by artificial
intelligence.

P4: Artificial intelligence can contribute to ongoing projects or pitches by matching,

recommending, and providing the most appropriate people within the agency,
depending on the behavioral patterns, interests, needs, and desires of target consumers.

Big data on advertisement execution

The most important area of data-driven advertisement execution is the automation of
the media execution method, that is, programmatic buying. Automated advertising
purchase optimizes the effect of correcting and tracking the way the advertisement is
executed by exposing the right message to the right people at the right time in the
most cost-effective manner through data-based real-time bidding (RTB). This is
6 H. LEE AND C.-H. CHO

fundamentally different from the existing method of advertising execution, in which

people manually buy and execute advertising media offline and measure advertising
effectiveness only through surveys after the campaign concludes. This difference is pri-
marily due to the fact that programmatic buying is aimed at buying ‘audience’ rather
than ‘media.’ In this article, buying media refers to the purchase of a specific inventory
of the media (e.g. a 15-second TV spot starting during an 8pm news program). This is
a format suitable for existing content delivery methods of mass media where everyone
is exposed to the same message at a specific time. Of course, in this way, the TV spot
is exposed to a large target audience (e.g. men in their 50 s), but others (i.e. women
and men of other ages) are also unnecessarily exposed to advertising.
Unlike buying ‘media’, the concept of buying ‘audience’ means that we do not
buy media but buy only the exposure of the target audience that is likely to respond
to an advertisement. For example, suppose you buy banner ads in the New York
Times economy section. However, millions of people from all over the world visiting
the same Web page of the New York Times are not exposed to the same advertise-
ment but are exposed to different banner advertisements depending on the visitor’s
age, gender, purchase history, and interests. Simply put, ‘buying audience’ is a
method of purchasing the exposure of a specific audience, not a media space.
Big data is crucial for programmatic advertising. In fact, big data enables buyers
and sellers to determine the most appropriate target audience for an advertising mes-
sage (Malthouse, Maslowska, and Franks 2018). Simply put, programmatic advertising
refers to the automation of the buying and selling of advertisements using real-time-
bidding (Cho and Lee 2018). Programmatic buying makes a request to the advertising
network in real time for billions of advertising inventory provided by the media com-
panies, and it takes less than 0.2 seconds to publish the advertisement maximizing the
advertiser’s performance. There are various step-by-step roles in programming buying.
First, the representative solutions of the advertiser side (demand side) include a plat-
form for purchasing advertisement inventory (demand side platform, DSP), a data
management platform for collecting and analyzing data necessary for purchasing
advertisement inventory. On the contrary, the supplier’s solution primarily includes a
supply side platform which is a collection of digital advertisement inventory of media
companies. In addition, Ad Exchange for advertisers and publishers to buy and sell
advertising inventory is necessary for such programmatic transactions. This unified pro-
grammatic advertising solution is now provided by large marketing platform vendors
such as Adobe and Oracle.
It is noteworthy that programmatic advertising technology as an automated-buying
process will be fully implemented in TV for planning, execution, and measurement in
the near future (iCrossing.com 2018). Indeed, according to a recent research, US pro-
grammatic TV advertising spending is forecasted to grow to $2.77 billion in 2019 with
a 58.4% increase, which means TV advertisements are expected to become more tar-
geted (eMarketer 2018). Although programmatic TV advertising will be less likely to
start out in the same way as it did in the programmatic display advertisement because
of a scarcity of TV inventory, TV advertisements will soon be bought programmatically
with fewer errors and more reach in less time. As a result of these discussions con-
cerning the impact of the programmatic advertising, we posit that:
 INTERNATIONAL JOURNAL OF ADVERTISING 7

Figure 1. Summary of discussions.

P5: Data-driven technology will replace traditional buying and selling of advertisements.

P6: Data-driven technology of the programmatic buying and delivering of advertisements

will become the most valuable driver of growth in digital advertising.

Figure 1 summarizes these discussions. Two determinant aspects of digital advertis-

ing (i.e. AI-assisted advertising operations and manpower optimization) are expected
to enhance consumer acceptance of advertising by providing personalized brand-
related experiences, which, in turn, lead to higher conversions. Consequently, these
two aspects can also contribute significantly toward improving the advertisers’ return
on marketing investment in terms of consumer responses toward their advertising
executions. Meanwhile, return on investment will be more accurately measured
because practitioners can use digital technologies to collect real-time data and exam-
ine target audience’s responses to advertising that are directly imputable to an invest-
ment (Cho and Lee 2018).

Future research agenda

Table 1 highlights a research agenda on digital advertising that is directly related to
our propositions. We have identified several future directions within our proposed
framework and summarized them in Table 1.

Concluding thoughts
In this opinion piece, we argue that it is time to redefine digital advertising. To do
this, it is crucial to develop a clear definition of digital advertising to attempt to oper-
ationalize and measure the detailed implications of advertisements that use new
digital media. We acknowledge that the six propositions proposed in this study are
broad and will provide a starting point for future research on digital advertising.
Although the postulates listed cannot be verified today in certain conditions or may
not even be fully supportable in the future, we are confident that they certainly pro-
vide a relevant viewpoint of the current status of digital advertising or of the not-too-
distant future of advertising.
8 H. LEE AND C.-H. CHO

Table 1. Summary of directions for future research in digital advertising.

Category
Characteristics of digital ads
Advertising outcomes (Cognitive/
Attitudinal/behavioural responses)
Individual factors
Social/Cross-cultural factors
Future research topics
Which type of digital advertising (digital signage, IPTV, smart TV, tablet PC,
smart phone, SNS, AR, VR, in-game advertising, advergame, digital PPL, MCN,
AI speaker, etc.) is suitable for which type of product category or brand?
Which type of digital advertising is capable of delivering what kind of
information and is suitable for which advertising purpose?
How does the media platform influence the effectiveness of digital advertising?
For example, if VR advertising is characterized by delivering a virtual brand
experience, how does it affect advertising outcomes such as consumers’
perception toward the brand?
How does advertising avoidance vary according to the type of digital
advertising?
How do advances in artificial intelligence within digital advertising affect
advertising effectiveness?
Under which circumstances does congruity between product category or brand
and digital media platform lead to a positive or negative advertising
outcome such as consumers’ attitude toward the digital advertisement and
brand? Which variables do we need to take into consideration?
What are the possible types of advertising that utilize a new digital medium?
For example, if industries use AI speakers for advertising media, how do we
postulate the types of advertisements for AI speakers? How do we measure
advertising effectiveness?
What are consumer’s beliefs or perceptions about digital mediums? How
do they affect advertising outcome?
How does advertising in high-tech media impact responses (e.g. product
knowledge, advertising or brand attitude, purchase intention)?
How can research include actual consumer behaviour more frequently in a
timely manner (instead of only behavioural intention)?
How can we measure the effects and effectiveness of digital advertising?
For example, what is the measurement of the effectiveness of AR
advertisement?
Which individual factors determine a consumer’s attitude toward a certain
type of digital advertising and how do these factors vary among these
different types?
What is the role of flow with regard to a certain type of digital advertising
such as VR or AR? Does the level of flow experienced vary according to
digital advertising?
What are the individual factors to mitigate the effectiveness of digital
advertising? For example, future research may seek to investigate how
cyber sickness (e.g. anxiety and nausea), a typical side effect of VR
advertising, affects its effectiveness.
There may be many individual factors that influence digital advertising
outcomes. Previous research has addressed several such factors, also
finding interaction effects between factors. Future research may delve
deeper into the interaction effects among the variables and analyze how
they vary in different digital advertising settings.
Are there any consumer concerns related to digital advertising?
Does the use of data for targeted advertising raise issues of data
protection and personal data security? What is an appropriate level of
disclosure in digital advertising?
It would be necessary for digital advertising studies to utilize data from
different cultures and compare them. For example, future research
could be carried out on cultural dimensions.

Consumers are getting more informed, more empowered, more connected, and
more digitally influenced than ever before. As consumers take control of marketing
communication, it has become clear why forecasting the future of digital advertising
is so important. We hope that this study leads to a more diverse and broader range
of discussions on today’s digital marketing systems, advertising, and content that is
characterized by the increasingly important landscape of digital advertising.
 INTERNATIONAL JOURNAL OF ADVERTISING 9

Disclosure statement
No potential conflict of interest was reported by the authors.

Notes on contributors
Heejun Lee (Ph.D., Yonsei University) is an assistant professor in the Dept. of Communication at
Daegu Catholic University, Daegu, S. Korea. After receiving his Master’s degree in advertising
from the University of Illinois Urbana Champaign, he worked as an account executive at Cheil
Worldwide Inc. and HS Ad for several global accounts such as Samsung and LG. After shifting
careers, he is currently researching new media advertising, branded entertainment, and consum-
ers’ cognitive and attitudinal responses to advertising.
Chang-Hoan Cho (Ph.D., The University of Texas at Austin) is a professor of advertising in the
Dept. of Communication at Yonsei University, Seoul, S. Korea. He has presented numerous
research papers on topics such as new media advertising and communication technology, and
his work has appeared in top-tier journals including Journal of Advertising, International Journal
of Advertising, Journal of Advertising Research, CyberPsychology Behavior & Social Networking,
Journal of Sport Management, Journal of Broadcasting & Electronic Media, Journalism and Mass
Communication Quarterly and Computers in Human Behavior. He also serves as a reviewer for
several marketing and advertising journals.

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