Ebiquity’s Chief Strategy Officer, Nick Manning, draws on the wisdom of Ebiquity CEOs around the world to identify the issues advertisers need to act on in 2016.
We can predict anything except the future, so the ironic saying has it. Given the current state of flux in the marketing, advertising, and media industry, accurate forecasts for 2016 could defy even the most prescient of crystal balls.
With the explosion in consumer choice thanks to digital, and especially through mobile devices, the marketing industry has more moving and interconnected parts than the most complex Swiss watch. The era of multichannel marketing has arrived, with its attendant opportunities and obstacles. Rarely has there been a more vibrant but challenging time in the marketing industry, with uncharted territory for everyone involved.
For advertisers in particular there has never been more uncertainty, requiring careful navigation and the help of the right advisors. Here we attempt to set out the key issues facing the world’s advertisers in what promises to be a dynamic and complex year ahead.
The first big talking point is the management of data: big, medium, or small. The survey we conducted in 2015 with the CMO Council identified this as the number one preoccupation of today’s Chief Marketing Officers, and this will become more pronounced yet in 2016.
The right kind of data, accurately marshaled with the appropriate tools, now affects every aspect of a brand owner’s product and marketing activity, so having the right data management strategy is vital. Tracking
customer journeys, capturing customer profiles, and having the right analytics tools are critical. But, as marketers discover daily, these issues are easier to talk about than achieve.
A good starting point for every brand owner is to develop a data management strategy which covers all aspects of data capture, storage, analytics, and usage. What’s more, the strategy also needs to include frequently overlooked hygiene factors of technology evaluation, data ownership, control, access, measurement, and audit rights. This is especially true as data ownership and control matters so much for advertisers, given the primary role of data in driving marketing.
Someone has to manage these less sexy needs, and it’s often the role of procurement to sort these matters out behind the scenes, leaving the marketing teams to concentrate on driving revenue. Procurement is currently in the spotlight, after PepsiCo disbanded its marketing procurement function altogether. At its best, procurement plays an increasingly important role in bringing order and discipline to a chaotic world, and this is likely only to increase. We also expect the insourcing model to continue to be adopted in 2016 for data
strategy and management.
Data Management Platforms will increasingly drive multiple channels, and brand owners will need more and better independent advice and technology implementation to manage complex, multichannel ‘tech stacks’.
The trend will continue toward increased personalization at scale, and audience
targeting via programmatic delivery. Relevance undoubtedly improves the performance of marketing of all kinds, so brand owners will seek content-led solutions in all channels to enhance user experience, improve
conversions, and maximize ROI.
Better user experience is becoming a hot topic, indeed. The trending buzz phrase of late 2015 was ad blocking, as people aim to shut out unwanted and intrusive messaging. Recent studies report that 15 percent of people in the US have installed ad blockers, to date more on desktop than mobile devices. Their motivation
for this is complex, but retargeting seems to have played a role.
The reality is that advertising can get in the way of the content people really want to see, and can also lead to slower downloads, higher data charges, and compromised battery life. We now live in a mobile world, after all. People don’t want to feel that their chosen content has been infiltrated and there’s not enough native inventory to support the number of brands that rely on advertising. Ad blocking could jeopardize the future of publishing
groups who rely on advertising, and the whole advertising world relies on great content from strong publishers. This will be a key debate in 2016 and not just for publishers.
In fact, 2016 should be the year of reappraisal of online advertising, full stop. And not just because of ad blocking, although it is a symptom of a wider problem and has been partly caused by other inefficiencies in the
online advertising ecosystem.The truth is that too little of an advertiser’s money reaches publishers to fund content: Typically, only 40 percent reaches the content provider, according to our studies with the World Federation of Advertisers. To supplement their meager income from digital platforms, publishers have to pepper their pages with different kinds of messaging, such as ‘clickbait’ and other forms of bought-in content, and they have to accommodate whatever money they can get, sometimes at the expense of editorial
“At its best procurement plays an increasingly important role in bringing order and discipline to a chaotic world, and this is likely only to increase.”
This is a vicious spiral where too much money is being diverted into ad tech charges, mark-ups, and rebates. If more of the budget reached the publisher, they could improve the user experience. This wouldn’t eliminate ad
blocking entirely, but it would certainly help.
Re-evaluating online advertising
The reappraisal of online advertising has to address the other much discussed but unresolved inefficiencies of poor viewability, mass fraud, and lack of control over brand appearance. With only 15–20 cents in the dollar reaching some advertisers’ target audiences after costs and appearance issues, 2016 should see many advertisers drawing the line at this massive wastage and aiming to reinvest in other channels – and not just other media.
So we expect to see brand owners demanding much greater transparency of performance in online advertising, with systematic and continuous tracking of performance for even the most basic KPIs, such as audience delivery. There is currently a gaping reporting gap in the market.
One prediction that we can be sure of in 2016 is that there will be fewer media agency reviews. The ‘mediapalooza’ of last year has not produced the sea change in the industry that is arguably needed. In many instances, advertisers will simply have exchanged one media agency network for another (or kept
the incumbent) at lower cost, but without the desired material advance in service delivery or digital effectiveness and efficiency.
One outcome of 2015’s unprecedented set of reviews, however, is that advertisers are becoming increasingly reluctant to entrust their agencies with the keys to the safe. Data ownership and control has become even
more crucial for brand owners as the media market becomes less financially transparent and the border between buyers and sellers become fuzzier. Trust will become a more valuable commodity, especially as more
advertisers probe more deeply into the inner workings of the media markets. As the media groups increasingly become media sellers, more advertisers will question these groups’ ability to plan objectively, and they may look elsewhere.
One bolder prediction for 2016 is that a new type of agency will begin to emerge, chrysalislike,
to address advertiser needs. In a world where content and channel solutions require a joined up, integrated, and solutions-neutral approach, brand owners will want partners who can deliver their needs across multiple
platforms, driven by data analytics. This won’t be an advertising agency or a media agency: It will be a marketing communications agency that is comfortable and capable across the content and channels spectrum,
and knows how to use data to inform its recommendations and not just report after the event.
Finally, multichannel marketing must drive the ‘attribution’ agenda. And if there is one prediction we can be absolutely sure of, it is that brand owners will seek a real understanding of what’s working, how, and –
that most elusive of goals – why. But there will also be a dawning realization that just looking at attribution in digital is an imperfect view when so many (and often better) influences drive website traffic.
Today’s brand owners live in a complex, dynamic world where the old boundaries of advertising and direct have merged, where ads and media have become content and channels, and the role of agencies has
changed. 2016 will be another year of change, and it won’t be augmented reality, artificial intelligence, or the Internet of Things that keep advertisers awake at night. As ever, it will be, ‘How do I navigate my way through this sea of uncertainty to deliver better business results, now and into the future?’ And they will look to a new breed of advisors to help them answer this evergreen question.