11 TRENDS TO SHAPE THE ADVERTISING INDUSTRY IN THE YEARS AHEAD
This year, the international appointment on digital advertising shed some light on the directions for change already in action in the industry and scrutinizing particularly the “born digital” generations, those Millennials and Post-Millennials who seem poised to shake traditional consumerism and economies.
Besides the dominance of video and mobile, so many insights and perspectives were shared that we thought it was high time to gather the ones that struck us the most together in one place.
1. All eyes on display
Data released by IAB Europe & IHS Markit show how in the first half of 2017 display advertising has been growing at brisk pace, outstripping in speed both search and classified/ directories advertising. Display accounts for 8,4 €bn on a total spending of 22.5 €bn.
2. A brief chat on bots
Expect machine learning to deeply impact on traditional ways and approach of advertising.
Last march Microsoft launched its Skype Bot Platform, which gives developers the opportunity to integrate new services and functions within the popular instant messaging tool. For example, bots will empower people to book a hotel, order take-away food or acquiring information on their incoming parcel instantly while participating in online conversations.
This is made possible by a very sophisticated system for natural language recognition (see trend 10: Speak Natural!), which will allow people to communicate with the bot like in a spontaneous conversation. (The Microsoft’s system has a word error rate close to 5.9%: that means it has basically reached human parity).
“65% of consumers are interested in chatting with business. 50% wold buy via message”
(Data: Bing, IAB Forum 2017)
This current scenario paves the way to a wealth of marketing possibilities and has a profound impact on searching as well. Search is in fact transforming from a reactive service requiring precise data inputs to produce ranked outputs to a predictive service that thinks ahead of your needs and delivers personal results on any device.
3. A bleak future for traditional broadcasting?
The television industry is reeling as more and more people are turning their heads towards on-demand and online streaming.
The battle for audience flares up as Internet streaming services Netflix and Amazon Prime are investing inordinately amounts of money into creating high-quality contents, with incumbents scrambling to keep the pace.
As the CEO of UK research company Enders Analysis explains from the stage of IAB Forum, in the UK after the peak of viewing during the 2012 Olympics five years of decline have followed across all age groups, but especially among younger generation (-23% TV viewing rate among people aged 16–34 vs -3% for people aged 55+). These data may explain why in a country like Italy, for example, where the 55+ demographic is quite numerous compared to younger countries, TV is still managing to hold the fort.
4. It’s the programmatic Momentum4.
The adoption of machines in the process of online ad selling and buying will become more and more widespread. According to a report by Dun & Bradstreet, “almost 70% of B2B marketers in the US plan to increase spending on programmatic advertising in 2017”. This accounts for an increase by 20% compared to 2016.
Europe shows figures alike, as marketers’ knowledge of programmatic platforms grows, together with the latter’s improvement in terms of better customer profiling and targeting and of their capacity to serve the right product at the right person at the right moment.
Most of this increased success comes from the push and popularity of video formats. In Italy, for example, video ad spaces account for 30% of the total market value.
“Programmatic advertising is set to grow by 26% this year, for a total value of 396 millions euro.”
Data: Internet Media Observatory, Milan Politecnico
5.Ditch Responsive! Go mobile
Smartphone have become quintessential part of everyday life and this trend is set to continue in the future at a steady pace. Their pervasiveness means every possible task will be accomplished by users through a mobile device, which means designing apt interfaces will become paramount for every business. But beware: being mobile-centred doesn’t rhyme with being responsive.
The degree of satisfaction in handling interfaces which have been built responsively-starting from a desktop logic, tough,- is significantly less compared to that experienced when users interact with applications truly built for mobile.
6. An OCEAN of psychography
We have been hearing a lot lately about psychographic profiling, especially after its controversial usage during the latest American Presidential election and Brexit. At the IAB Forum, the man behind all this, Alexander Nix, CEO of Cambridge Analytica has given a fascinating overview of the O.C.E.A.N model, the tool his company relied on to identify people’s personality traits, to tweak promotional messages accordingly. Combined with the improvements in machine learning and the wealth of big data available for organisations, the psychographic approach looks set to turn the marketing and advertising world upside down.
“We are progressively moving from what was informational and brand advertising to behavioural advertising” A.Nix, CEO Cambridge Analytica.
7. R.I.P, email?
For decades, emailing has dominated digital marketing. Today tough, the shift to a mobile-first culture makes messenger and other instant messaging apps look more attractive to young consumers’ groups. And as these young consumers get older, the importance of these services is likely to rise. Is email going to die? Maybe in the lung run, as several IA B experts suggested during the two-day conference. Despite emails look still appealing for more mature targets, young generations are the ones marketers should be more concerned about when thinking of next future scenarios.
8. The new prosumer’s journey
The traditional passive consumption of information is being shaken by a new breed of consumers, who have all the tools and opportunities to produce content themselves and thus are getting more and more particular about the quality of contents they access. Namely, Millennials and the Generation Z are rising the bar for brand to whisk out in-context content their consumers can trust, handle and share. (see also trend 9).
9. Quality content at UX condition
Marketers have been obsessed with the notion that content is king for some time now. Quality content is in fact rewarding, tough we may argue that it is not all that matters. What brands should care about today, along with the footing of their contents, it’s the user experience of the interfaces they choose and build to talk to their consumers.
Only focusing on a correct user strategy can prevent fickle users from derailing their attention.
10. Speak Natural
Natural Language has become a sort of “buzz” expression, with the ground-breaking progress of conversational digital technology and of the NLP (Natural language processing), the field of computer science and computational linguistics born on the wake of Alan Turing’s studies during the ’50. In the NLP’s approach a machine is to be considered intelligent if it could sustain a conversation with a human being without the latter realizing they were interacting with a machine.
Technology is definitely pushing the boundaries in this direction: take Microsoft’s controversial experiment with “racist” chatbot Tay on Twitter, and their more successful attempt in China with bot Xiaolci.
But apart from those clumsy experiments, we should expect conversational interfaces will go to great lengths and their power will lie in their ability to faithfully stick to human language . Interestingly, natural language is also an underlying concept in the clean label movement: consumers in fact look keen on spending more and trust those products with a clear, comprehensible labels.
11. Turning dark data into gold
Video formats are fuelling the online ad market, growing by 30,5% in 2017 (data: “IAB Europe & IHS Markit).
But all this digital richness hides untapped potential, the so called dark data: videos, imagery and online conversations are still a mostly unexplored goldmine of unstructured bits of information. Technology is leaping forward to help brands put their hands on this treasure: tools like IBM Watson, to mention one, are helping marketers come to grips with dark data to get a better profile of individuals, by sorting and analising the trail they leave on every digital interface.
“We only really have access to 20% of the world’s data right now,” BOB Lord, IBM Chief Digital officier
This article has been written for and appears on Creativity Matters, a newsletter on communication and brand strategy by Linea ATC
Illustrations by: Nadja Rulli
Originally published at medium.com on February 24, 2018.
