- Category: January 2018 - Trends and Predictions
Kantar Millward Brown recently analyzed the world's most important digital media trends of the new year. According to the market research and consulting firm, a new distribution of advertising budgets can be expected, as well as consumer innovations in areas such as Walled Gardens, Branded Entertainment and Artificial Intelligence:
Walled Gardens will grow rapidly
Closed platforms and advertising environments, so-called Walled Gardens, such as Facebook or Google, became a topic of conversation last year. Advertisers and media agencies have to question whether to invest media budgets even though the platforms do not provide relevant targeting data. Another point of criticism is the lack of standards with regards to their impact.
For 2018, Kantar Millward Brown predicts a growing importance of Walled Gardens due to three factors:
- The offers of many platforms are so attractive for the users that they like to share their personal data.
- Advertisers have an increased need to address sometimes very fragmented audiences. Large platform players have comparatively specific target group data and may use it as well.
- At the same time, smaller providers will stumble faster in the future, if they cannot reach certain target groups or if they cannot portray the desired content context.
Advertising expenses shift from digital to cross-media investments
After all, 30% of the global advertising spending is invested in the digital environment. But this year, big advertisers like Procter & Gamble have re-thought their digital investments and drastically cut them for the first time – and this development will worsen in 2018. Marketing managers will put even more stress on the importance of digital activities in the marketing mix. Media houses, content platforms, agencies and market research partners should be prepared for this and have answers ready.
Today, advertisers want integrated measurement of activity across different channels, but the lack of measurability of the cross-media ROI remains the sticking point. Besides that, new hurdles are emerging in individual channels, such as rising investments in mobile marketing, which currently account for 50% of digital investments worldwide, and that will increase the number of walled gardens and thus further complicate the measurability of digital activities in the future.
Measurement of the cross-media ROI is developing, but initially remains fragmented
Marketing executives and their media and creative agencies are under tremendous pressure to demonstrate the impact of their initiatives on revenue performance. But that this is possible in all details and across channels remains wishful thinking in 2018. Time will pass until the code for a cross-media ROI has been cracked. Thus, advertisers will continue trying to make an impact on brand awareness and revenue increases on the basis of individual activities or channels.
Acceptance of OTT offers is growing
The growing acceptance of so-called over-the-top (OTT) offerings by consumers is evident: Audio and video streaming are in vogue and vendors such as Spotify, Netflix or Amazon are seeing high growth rates. Since especially younger users are losing interest in linear services, the pressure on established providers is increasing. However, this development also brings with it new requirements for market research: In the future, not only methods will have to be adapted, and systems reworked for cross-platform ad effectiveness measures, but OTT platforms have to be added in particular.
The dominance of the algorithms comes to an end
Over the past decade, digital marketing has been dominated by companies that have been able to program smart algorithms. And even in 2018, algorithms will create a lot of added value for the marketing industry. At the same time, we will get this year a first impression of how Artificial Intelligence can help and support marketing managers. Machine learning approaches will optimize campaigns by meaningfully capturing large amounts of unstructured data and deriving decisions for media investments. Artificial intelligence, for example, will enhance the processing of natural language, machine vision or chatbots.
Branded Entertainment - videos become the essential format
Branded Entertainment is a trend that will spread in 2018. The term primarily means entertaining videos that will evolve into a centralized content format. Brands will increasingly rely on such entertaining films to spread their message. On the one hand, the trend is to be understood as a response to the sometimes fundamentally negative attitude towards advertising. the Kantar Millward Brown study AdReaction shows e.g. on the other hand that traditional full-video channels, such as TV or cinema, are in high demand among younger consumers. Advertisers will respond - e.g. with native advertising, which is played in an editorial environment.
Voice activation with potential for marketing activities
The potential of networked household appliances has been discussed for many years. Lightbulbs, thermostats and door locks, everything can be controlled by an app. But so far, consumers keep their enthusiasm within a limit. Perhaps this attitude will change with the dissemination of Alexa, Amazon’s language assistant, that could without doubt provide new opportunities for marketing, since in principle, consumers are open to advertising in the field of voice activation and control.
Storytelling will conquer content marketing
Successful advertising has always relied on the power of storytelling. Good campaigns are based on inspiring, emotional stories. Due to the hype surrounding content marketing, some marketing executives seem to have lost sight of this mantra. But the guideline is just as important today as it was yesterday. In fact, there are many indications that it will become even more important. Studies on the impact of advertising using facial coding prove that videos can only emotionally engage the recipient with a good story.
Kantar Millward Brown provides us indeed with very interesting and useful insights, which is why I am looking forward to presenting their recent study AdReaction 2018 next week. Stay tuned!
By Daniela La Marca