Five trends that will disrupt the industry
James Collier, head of digital at Bohemia, outlines five trends that will change the nature of the business.
Who in advertising doesn’t love a good trend? I certainly do and in January each year it feels like Christmas, Easter and my birthday all rolled into one. Every agency and their mother pops out a trends deck and the world is full of thoughtful and often insightful thinking.
So why bother pulling together a trend list in April? Surely the boat has sailed. Maybe it has or maybe the air is just a little clearer now.
In my opinion any prediction worth its salt is based on a quantifiable behaviour that is happening now. It works for the weather and it can work for communication, which is why, just like the Bureau of Meteorology, I have based my future views on data accessible today.
1. Marketing goes real time
The first trend is a push towards real (or near real)-time marketing. Globally, real-time targeting and buying technology is advancing at quite a pace while instantaneous data processing and decision-making systems are helping to put the right information in the hands of the right people, at the right time. This combination of increasing knowledge and capability only leaves us with a question of ‘when’ not ‘if’ real-time marketing will disrupt our industry completely. In terms of what’s driving real-time marketing forward, we firstly have the accelerating investment in programmatic buying technology. Although not ‘new’ – the first demand side platform (DSP) was launched in 1999 – the technology didn’t really find traction until 2007 when five of today’s major DSPs were founded and ad exchanges became hot commodities with Google, Yahoo and Microsoft all acquiring smaller players. Today Australia’s real-time bidding (RTB) market is the fastest growing in the world with 30 per cent quarter-on-quarter growth, according to Emarketer and The Rubicon Project RTB Report Q4 2012. Although it will likely temper slightly across the rest of 2013, we’ll still see the market ending in substantial positive growth.
In addition to media agencies buying and refining digital in real time, marketers are exploring ways to pull through real-time data streams to turn in-market observations into in-campaign optimisations. A topical example of this in action was the power cut at the Superdome during this year’s Super Bowl. As social conversation grew, the likes of Oreo’s, Calvin Klein, VW and Audi all used the event as a platform to share highly relevant and timely messages. In fact, the recently published report, InfoGroup Targeting Solutions 2012 Social Analytics, suggested that 53 per cent of senior marketers would be looking at social analytics to help provide real-time feedback on campaign activity.
However it’s one thing being able to market in real time but if we can’t measure its contribution in the same way then is it worth the investment? Unsurprisingly brand research organisations have taken notice of this emerging trend and are releasing or developing products that answer this question. Millward Brown, for example, recently launched AdIndex Dash, a specially designed brand tracker that analyses the impact of digital comms on key brand measures in real time.
However it’s important to recognize that any shift towards real-time marketing comes with its own set of challenges.
Firstly there will be a significant resource impact. Programmatic buying technology is a fantastic innovation but over time it will commoditize. Therefore the most valuable element of any trade desk will continue to be the man or woman behind the tools. However to truly deliver on the promise of real time, the trade desk will need to be resourced appropriately to ensure every marketing opportunity is capitalised on in the most effective manner. This comes with an increased operational cost and potentially a higher staff requirement. Both of which would put pressure on current agency/client commercial relationships.
Secondly, existing agency and media/publisher relationships, or terms of business, would need to be changed. Complete flexibility and transparency would need to be built into each engagement along with an agreed set of measures to monitor in-campaign performance. The idea of a long-term deal or a volume trading arrangement would certainly encumber the ideal of true real-time marketing.
Thirdly, creative agencies will need to be ready to adapt inefficient creative on the fly. As campaign insights and consumer feedback filter through social channels, there is a real opportunity to optimize the creative voice mid-campaign. This may extend beyond tweaking in-market creative to developing new collateral to amplify a behavioural response and generate additional word-of-mouth around a brand. Lastly, agencies will need to invest in data management and visualization platforms. The sheer volume of data available to process will require a central data nerve centre to process and visualise, ready for interpretation and action. Without it, the value that lives in the data will always remain one cell away from discovery.
2. The web leans back
The second trend is that of a more relaxed web audience. Since Apple launched the first iPad in 2010, internet behaviour and consumption has changed dramatically. In fact, tablets are the main driver of this trend. In the fourth quarter of 2012 tablet sales accounted for 35 per cent of all computer-related shipments worldwide and it is predicted that tablets will overtake PC volumes this year. A quite staggering statistic considering the market is less than three years old. Australian tablet penetration is also predicted to grow to as much as 48 per cent by the end of the year, certainly scale enough to push the digital marketing industry in a new direction.
That said, tablets are also by and large an inert device with 79 per cent of usage occurring in the home and on the couch. This lean-back consumption is predominantly a new form of usage and not a cannibalisation of another screen. This is an important distinction to make and one that has driven tablet households to spend an additional one and three-quarter hours online. The impact of these contextual and behavioural changes are likely to be more profound than many are anticipating.
Firstly there is what I call a ‘gesture gap’. The vast majority of brand and campaign experiences are built with mouse-based navigation in mind. Point, click and consume. It’s treated us well for many years. However, more and more Australians are accessing the web via touch-screen devices, using their finger to navigate and interact with those same brand and campaign experiences. At what point do we flip the paradigm and stop offering a substandard touch experience because of our focus on the mouse?
Secondly, brands and agencies need to think harder about the content that sits behind each device, and not just treat each screen simply as a gateway to a standardised web. If tablets drive a lean back, desktops a lean forward, and mobiles a lean-free experience, then how does the content need to differ to deliver the most relevant experience?
Lastly, since tablet growth is driving incremental usage and not necessarily cannibalizing desktop/laptop activity, the cross-device measurement conundrum only grows in importance. Without a single user view, the idea of true omni-screen marketing remains out of reach. Until this puzzle is cracked, brands and agencies will still feel a sense of insecurity when it comes to managing campaign activity, frequency and investment.
3. Brands take user-generated data seriously
The third trend focuses on user-generated data (UGD). The ongoing big data conversation can often spiral out of control, and although enterprise data is a rich seam of intelligence, it’s the largely unstructured and chaotic world of user-generated data that is of most immediate value to marketers.
In fact, 70 per cent of the world’s data is currently being created passively by individuals and their daily digital and social actions. Facebook is unsurprisingly the biggest beneficiary of this with its 1bn-odd users creating 500 terabytes of new user data each day. In isolation, each of these seemingly small data points (a like, check in, photo tag etc) is principally inconsequential but combined, they build a rich audience picture. Interestingly, in comparison, the number two social network, Twitter, generates just 12 terabytes of new user-generated data each day. The value of this UGD is starting to find traction with traditional and emerging organisations alike. Nielsen recently bought Social Guide, a social TV analytics platform and have shifted their entire social media strategy to focus on analytics as opposed to monitoring. Twitter, on the back of creating the Nielsen Twitter TV Rating, has also acquired social TV analytical technology in Blue Fin Labs, so expect more movement in this space as it continues to mature.
As the value of UGD is more thoroughly explored we’ll start to see its impact felt in different ways.
Firstly, brands and agencies need to invest in increased data rigour and processing. With up to 60 per cent of the social signal categorised as noise, UGD will need to be subjected to the same level of cleansing as other sources.
Secondly, the increased level of data confidence that will come with this rigour will help drive a shift in campaign measurement. Traditional media currencies will come under pressure as more insightful and meaningful alternatives emerge.
Lastly, the UGD set will grow in prominence and value to brands as they look for an immediate source of insight and feedback to power the real-time marketing trend mentioned earlier.
4. The conversation changes from mobile to mobility
2013 will definitely not be the year of mobile, but it might be the year of mobility. After all, the behavioural statistics are compelling with 15 per cent of Australians’ total media attention directed to their mobile screen. Yet the medium only commands 0.4 per cent of all advertising investment. Why? What is broken?
Consumption and usage certainly isn’t heading backwards. In fact, in the next five years mobile data demand will grow 13 times to 11.2 exabytes per month. Yes, you may be wondering what an exabyte is. To try and put that in perspective, in 1999 the University of Berkeley concluded that every single piece of information ever created in any form by humanity equated to about 12 exabytes. So soon, roughly 2000 years’ worth of data will be consumed every month just through the mobile screen.
Consumers will increasingly use their smartphone in a lean-free way, accessing information on the go and using it to make decisions on the fly (95 per cent of smartphone owners use their device to find local information with 88 per cent taking action the same day). Brands and agencies need to get to grips with this third (location) contextual dimension or risk seeing their upper funnel activity become less effective as customers make more decisions in the moment.
Mobility has also been recognized by one of the established cornerstones of the web. Google’s recent refresh of AdWords and the rollout of Enhanced Campaigns blends deep contextual insight with the power of search intent to create a hyper-relevant screen experience with mobility front and centre, and if anyone can make mobility work, it’s Google. As a result we will begin to see the conversations we are having evolve.
Brands will begin to embrace the idea of mobility over mobile. This means moving beyond a device or operating system towards creating a truly location-neutral experience that adapts based on the context it is being consumed in.
There will be a significant lift in hyper-local marketing, albeit off a low base, as brands (especially retailers) offer solutions to some of the market’s bigger problems. We will see brands successfully and consistently bridge the physical/digital divide, retailers will conquer show rooming, agencies will unlock the power and pathway of mobile analytics delivering increased accountability and insight and we’ll see brands find additional value streams for their customers which can be delivered on the fly.
5. Content management becomes a business priority
The last trend is that of content management becoming a business priority. As the ‘community’ fascination and ‘like’ race that burned through our industry 12 months ago continues to calm, we’ll see more brands begin to realise just how valuable fresh and timely content is. That realisation will extend beyond the walled garden of the Facebook page and the confines of the company blog to permeate the entire business.
That said, the primary driver of this shift will still be social. As social customer service continues to flap in the wind, a recent study illustrated that only three per cent of customers prefer to use social media as a service channel, brands will need to change the conversation from one of ‘if you DM me your details I can help’ to one of brand interest and engagement.
We’ll also see the current search vacuum of decreasing CPCs driven by mobile collapse courtesy of Google’s Enhanced Campaigns. This will again force brands to invest in content to build out their organic presence in a drive to better balance their paid and owned programs.
The growing importance of prospect and customer comms – a hot topic in many boardrooms – will further accelerate the branded content need. As marketers look to personalise content and communication, agencies will be forced to supply a steady stream of fresh and relevant content.
This will bring changes to the way content is viewed within the campaign mix. Content will infiltrate campaign planning as the conversation shifts from one of ‘content is king’ to that of ‘content is currency’. As a result, campaigns will include their own content long tail to help extend the life and depth of the message(s) in market.
As a result there will need to be a re-evaluation of the current content production model. Campaign shoots, client commercial arrangements, talent contracts, post process and delivery methods will all need to be rethought. A process of optimisation will need to be agreed – one that embraces flexibility and feedback that allows for inefficient creative to be altered mid campaign.
So there we are. My two cents on what will affect our industry in the coming year or years. The final point I’ll leave you with is that these trends rarely happen in isolation so if one begins to accelerate the others are likely to follow.
James Collier is the head of digital at marketing and communications group Bohemia.
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