Advertising: Video & Social Predictions For 2017
2016 was a big year for video but only some brands are starting to realize it’s importance on social. The shift from traditional advertising to digital advertising is continuing to transform where companies allocate their marketing budgets. As print continues to die due to the plethora of instant articles available to a person anywhere, at anytime, so will cable with streaming services such as Netflix and Hulu. The one thing holding cable networks together by a thin thread is live video. Consumers want to watch sports and breaking news in real-time.
But as Facebook and other sites start to implement live video and show the ability for companies to profit on their networks with detailed analytics to support their claims, advertisers will follow suit. This means that cable networks will continue to receive less and less of the marketing budgets they’re accustomed to getting, cut back on their programming, and become what radio became in the 1950s-1960s once TV was introduced to the world.
So what does this mean for brands, agencies and production companies?
Brands will continue to grow their in-house marketing and production teams to cut out the middle men (the agency and production companies), produce more content to keep up with the changing times and have complete creative control. The issue: brands often don’t know what’s best for their marketing and don’t hire the best of the best, which is something agencies strive to achieve, and do so successfully. It’s something a person needs to experience to understand — the conference call where an idea is brought up by corporate and everyone on the line shrugs it off because they all concur that it’s a terrible idea.
Agencies will form in-house production companies (or continue to grow their own) so all jobs (and money) can be circulated within the company. And it makes sense, too. Why outsource and spend millions when you can invest in your own production capabilities and keep those millions? This is something that was only made possible due to innovation in the digital video space. Ten years ago it would cost millions of dollars to create a cinematic looking ad. Now even college kids have access to stellar equipment and editing systems that can emulate what only the elite had access to in the past. This will also give rise to the new-form boutique agencies that understand the shift to digital and capitalize off this movement, forming production companies within their agency as the foundation of their services, rather than implementing those services after being in business for years.
This is bad news for larger existing production companies: brands will continue to cut back on multi-million dollar budgets and instead want more videos to keep up with digital advertising. This means less money per video will be spent. Rather than produce 10 large advertisements in 1 year, brands will want to produce let’s say, 40. However, they won’t increase their budget substantially for the production of these videos; therefore, the the cost per video will depreciate in value. And since the brands and agencies will continue to implement their own in-house production capabilities, the production companies won’t be necessary for the majority of the lower-budget work (which will be most of the market share).
I’m not saying this will all occur in 2017. This process will happen over the course of several years. This is just the beginning. But we are at a critical turning point. A turning point that will make some people very rich, and others will be left in the dust.
I’m always on the lookout for the next big social network, but I think people have become so comfortable with the current options we have at the moment that there isn’t a need for a new platform. It’s like being in a relationship — if things are great, it’s great; but once it goes sour other options seem more appealing. Even so, that takes time — because people (and consumers) like to be comfortable. Think about when an app updates and revamps it’s look or image. It throws you off. You don’t like it. Publications mock it. Then a month later, you can’t even remember what it looked like. Think about Instagram — what did that used to look like? My point exactly. It’s in our nature — people evolve, adapt to their surroundings, adjust and move on. Vine died because other networks offered the same tool and therefore it became irrelevant. Twitter will follow suit and die in 2017. Why? Because “trending” and #’s aren’t unique to that platform anymore. Just go to Facebook and you can read all about what’s going on in the world — whether real… or fake (but that’s a subject for another time).
We’re seeing a convergence of social platforms that are attempting to beat out one another and win the hearts of advertisers. Snapchat wants to keep its content relevant and online, so it introduced stories and memories (shifting from purely a disappearing messaging system to an app with a social feed). Soon enough you’ll be able to tag other users/pages, link to websites and track analytics. Why? Because then there will be more of a push for advertisers to spend on their platform. Not to say advertisers aren’t already — it’s the hot ‘new’ app — but Snapchat’s profits will increase ten fold if they implement those strategies to make it easier for advertisers to feel comfortable in seeing their ROI. Instagram wants to compete with Snapchat so they took their idea and created stories. Live video is available across all these networks (Snapchat is currently person to person). It’s turning into the same war Apple has with Samsung. Which company can have the highest resolution phone with the best camera and all the features of a small computer in your hands? And more importantly, who can do it first?
I don’t think the world is ready for a new social network… yet. Maybe the next big thing is in development in 2017, but if it gains any traction Snapchat or Facebook will most likely attempt to acquire it for a large sum of money any person in this world would be insane to refuse.
Which brings me to my final point, the consumers. People are getting smarter. They’re adapting quickly, across generations, to the new way in which we receive information and entertainment. This means that both the social networks online and advertisers alike need to be one step ahead of the trends and mentalities of the consumers, and a lot of advertisers/brands are falling short. No one quite understands the ‘right’ way of doing things. But I have some theories.
For one, quality trumps quantity.
I’m fairly versed in Facebook but even its algorithm is consistently changing and causing me to rethink my ideas. I guarantee one year from now… no, several months from now, this paragraph will be irrelevant. Some Facebook pages are posting article after article, video after video in the hope that one post will be the next big hit and reach a mass audience. But I don’t think it’s the quantity of work rather than the quality of work that people find important (breaking news exempt). By posting less okay content on Facebook/Instagram and posting more stellar content, that may increase the importance of each post, thereby increasing engagement. That being said, its a fine line as to how much is too much, and how little is too little.
Secondly, people are well versed in advertisements.
I don’t think brands quite understand that the traditional ad you see on TV (and now on social) is multi-generational. I grew up with advertisements on TV, my parents grew up with advertisements on TV, my parents parents grew up with advertisements on TV. They’re progressively getting worse (with the exception to a handful of meaningful ads that are produced yearly). And this is a multi-billion dollar industry. So until the brands realize that traditional advertising methods and formulas just don’t cut it anymore, the consumers will continue to be turned off. Advertising needs to be incorporated in an organic, interesting way. If it’s a great story, people will watch it. If it amazes, people will watch it. If it’s shocking, people will watch it. If hints at being an ad, people will scroll past. Take car commercials for instance. They have a formula. And most of the ads are terrible. The only car brand that comes to mind with great advertising this year is Lexus. Not only did they create a dazzling ad with LED lights mounted to their Lexus IS that is overall impressive, they also teamed up with Sriracha to promote their Lexus IS. Sriracha and Lexus have nothing in common. But people were in awe, and the popular hot sauce company helped them to viral. You could say they are the sole reason Lexus went viral. There’s no way a standard car commercial would have done as well. This is such a new phenomenon that executives who are still new to social media (and may not even have social accounts) flat out don’t understand. And they’re the ones running the business! It baffles me that some corporate leaders have no idea and their kids have a better understanding. Therefore, it’s only until a younger demographic enters the workforce and reaches the executive level that this type of shift will follow suit. I believe this will begin to happen in 2017, but it won’t truly take effect for several years.
We live in exciting times and I’m eager to see how businesses, advertisers and consumers evolve over time. 2017 will continue to push the boundaries and we will have a deeper knowledge of our successes and failures. Until next year!
About The Author
Mike Irving is the Co-Founder of Food Steez, a digital agency with production capabilities and social media influencer. In the last year alone, his videos have generated hundreds of millions of views between the Food Steez brand and their clients.