Programmatic advertising comes to wearables

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by Kay Mathews

Programmatic ad buying promises “hyper-targeting abilities” and FitAd brought this burgeoning tech for marketers to wearables by inking a deal with Amtrak’s Acela Express.

The train-travel company is being called by Adweek “the first known programmatic wearables ad buyer.”  Travelers in Acela’s Eastern Seaboard route who are golfers on courses in that area, and Sony or Samsung smartwatch wearers, will see “running banners via Golfshot” if they have downloaded the ad-supported free version of the mobile app.

Hyper-targeted?  Yes.  The wave of the future?  Yes.  Or, as Mindshare calls it, the “third wave of digital advertising” in which advertising dollars are funneled into “futuristic products” like smartwatches, fitness trackers and sensors, and “augmented reality devices, like Google glass.”

The market for “futuristic products” is emerging now for both fitness wearables (smart wristbands, sports watches, other fitness monitors, heart rate monitor chest straps, and smart garments) and smartwatches.  As TechCrunch notes, “fitness wearables will bounce back from smartwatch threat.”  Analyst projections indicate that fitness wearables’ shipments will reach 68.1 million units in 2015 and in the following year that number is expected to total 91.3 million units.

Apple is expected to move into the smartwatch (wrist-worn device with indication of time and wireless Internet connection) space in 2015, and has invited developers to begin building software for its wearable, the Apple Watch.  The current leaders in the smartwatch business are Samsung, Nike and Garmin with 33.8 percent, 8.4 percent, and 8.4 percent of the 2013 market share respectively.

Pascal Koenig, managing director of the Smartwatch Group, told Forbes, “In 2013, the global smartwatch industry reached a global market volume of USD 700 million, ten times the size of 2012. In 2014, the industry will grow to USD 2.5 billion – 5% the size of the watch industry. In the years to follow, the smartwatch industry will keep growing at a 3-digit rate.”

The wearable device market entered the scene in 2010 with a market value of $6.3 million and has seen steady increases in value since.  According to Statista, “By 2018, it is estimated that this market will be worth some 12.6 billion U.S. dollars.”

iMedia Connections encourages marketers to adopt programmatic advertising, noting, “As consumers continue to embrace more technologies into their lives — perhaps wearables are the next big screen — the advertising ecosystem too is turning to advanced ad tech products to better, and pre-emptively deliver personalized ads and offers to consumers in a more cost efficient manner.” In other words, programmatic is here to stay.

The projected market value for fitness wearables and smartwatches in upcoming years suggests that small screens will be big business for wearables advertising networks.  The FitAd deal likely marks the start of a booming hyper-targeted digital advertising wave.

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