10 Digital Trends to Watch in 2016

computers-e1456504383215

“The only way to make sense out of change is to plunge into it, move with it, and join the dance. ”- Alan Watts

Whether or not you’re familiar with the late twentieth century philosopher Alan Watts, I think the above quote is great advice, especially for digital advertising professionals.  The industry is moving so rapidly that yesterday’s big story becomes tomorrow’s footnote, and each technological advancement is seemingly leapfrogged instantly.  Yet this very nature of change in the industry is the reason that advertisers need to stop and take stock of what is coming next.  Consumers are exploring new ways of communicating and gathering information all the time, and marketers want to be a part of that experience, in an engaging and natural manner whenever possible.  Here are some of the digital trends that marketers need to be paying attention to (and dancing with) in 2016 and beyond.

1)  Wearables for All

Analyst predict that shipments of wearables are projected to reach 148 million units annually in 2019, up from 33 million units this year.  This growth will be driven by the adoption of smartwatches, most notably the Apple Watch.  This means there will be a staggering increase in the amount and types of data that marketers will be able to leverage.  Advertisers already rely heavily on online data to better target customers and personalize messaging based on their online behaviors.  Location data from smartphones now helps marketers better understand and target their customers.  But ads will soon have the ability target not just to target people by their day-to-day habits, but by targeting based on “emotional data.”

With this type of data, a brand could target people at key moments when consumers could be more physically or emotionally open to the brand’s message.  For example, they could target people who recently went for a run with a sports drink ad, or reach who have issues sleeping could be targeted with ads on sleep aids.  Furthermore, there is the potential for smartwatches and wearables to detect basic levels of happiness or stress in the wearer, allowing marketers to target users when they are more receptive to certain offers.  The adoption of this type of advertising will take time to become commonplace, but it will be a powerful way for marketers to connect with their target audience.  The biggest challenge for this industry to manage will be privacy concerns.

2)  Ad Blocking

Usage of ad-blocking technologies is taking off at an alarming rate – a global growth rate of 41% year-over-year according to a 2015 study by PageFair. These technologies effectively make users invisible to digital advertisers, so they do not receive any banner ads, online video, retargeting etc. In the US alone, there are over 45 million ad blocking users (16% of the US internet population). These are some of the internet’s most informed users, and they are being completely missed by advertisers. So how will publishers, which likely rely on advertising to fund their content, combat this issue? Due to the high adaptability of these open-source technologies, ad blocking is only going to continue to grow. That growth will be accompanied by intensive publisher and industry response in 2016 on multiple fronts.

Despite the explosive growth in usage, a recent study by Strata shows that only 9% of ad agency professionals consider ad-blocking to be a major concern. There are several reasons for this perception, but one of the largest would be that many have no idea of the scale of the issue. As these users were invisible, it has been difficult to estimate how prevalent the usage was. The invisibility also means that the users are never served ads, which protects advertisers from wasting advertising budgets on this audience.  In addition, many consider the use of these technologies to be an industry vertical problem due to the audiences that are using them. Ad blocking usage is highly skewed toward the younger male demographic. As such, certain internet content (such as gaming or tech), which attracts a more tech savvy young male audience, has seen over 25% of their traffic utilizing ad-blocking technology.  That being said, expect ad blocking growth to be across all demographics in 2016, not limited to niche audiences.

3)  Continued Growth of Online Video

Digital video is growing and has been a key driver of moving brand marketing budgets online.  That fact won’t be changing as we move into 2016, a year that will provide new opportunities in online video.  With the growth of mobile, the online video landscape is changing.  Further spurred on by the continued fragmentation of television audiences and increasing number of “cord cutters,” it is now more important than ever to consider online video to reach TV’s lowest usage quintiles.

Digital video tactics will need to be smarter.   With the continued growth of this channel, there will be more and more marketing noise.  Advertisers will need to more effectively cut through that noise by better engaging with users.  This involves improving distribution, but the content itself must also evolve. First, marketers should put more focus on keeping the message short. The first few seconds of a video are crucial to grab the user’s attention. The video must be engaging, relevant and relatable.  Anything less and marketers risk the viewer leaving the experience entirely.

Mobile will be an important part of online video growth.  Mobile is quickly becoming a dominant device to reach consumers at all hours of the day.  With the increasing ad spends being allocated to online video, an increasingly large share will be focused on mobile.  Mobile devices allow for greater usage of hyper-segmentation strategies.  There is an unprecedented amount of data available for targeting – largely due to expanding capabilities of mobile devices.  In 2016, it is expected that there will be an even greater emphasis on leveraging that data.

Finally, online video will also be coming to Google. Instead of text-based advertisements, there will be a move to include video-based advertiser content.  At this time, Google hasn’t released much information on the offering, but this will be a key development to watch in 2016.

4)  Online Ad Fraud

In a marquee study, the Association of National Advertisers (ANA) and cyber-security firm White Ops estimated that $6.3 billion would be lost to online advertising fraud in 2015. New estimates put the total closer to $7.5 billion with only about 50% of impressions being seen by humans. The issue has only been exacerbated by the advent of automated and programmatic advertising which now makes up 53% of all digital display spend. Some of the largest global digital companies like Google and comScore are the driving force behind major efforts to detect and eliminate the robotic programs that perpetrate most, if not all, of the online ad fraud being committed. But as detection methods evolve, so does the type of fraud being perpetrated.

Online ad fraud will always be present as long as there is money to be siphoned away from advertisers. Fraud is a controllable issue if the right technology and protocol are put in place to protect campaigns. Turnkey technology solutions are readily available from companies like comScore, Integral Ad Science and White Ops, and are the first step in shielding campaigns from fraud. But the onus needs to be put on the publishers where fraud is being committed. Arming digital media buyers with the right information through the use of fraud monitoring software will allow agencies and brands discuss with publishers about how to alleviate fraud from campaigns, and to secure makegoods for any fraud being perpetrated above an allowable threshold.

5)  Advertisers Embrace Instagram

In the summer of 2015, Instagram announced that it was moving to a self-service model, including lower rates and more advanced targeting and reporting. Previously, Instagram ads were only available on an insertion order basis and required minimum investments in the hundreds of thousands of dollars with very few targeting options.

Instagram is one of the world’s largest mobile advertising platforms with over 400 million monthly active users worldwide and over 70 million photos uploaded every day. Now that the self-service model is open to all advertisers, entry is more attainable than ever. The advanced targeting options also allow advertisers to reach their target audiences more accurately.  Ads are bought through the Facebook Ads interface, and they are purchased on a CPM basis through a bidding system.  As most advertisers are already using Facebook’s platform, it’s not surprising to see their dramatic growth this past quarter.  Facebook recently stated that 98 out of Facebook’s 100 top advertisers also advertised on Instagram in the fourth quarter.  With Instagram having about roughly half the mobile app reach of the Facebook app, there is still plenty of room to grow users as well as advertisers.

6)  Viewability Trends

The IAB defines a viewable impression as having at least 50% of the ad’s pixels in view on the user’s browser for at least one second for display ads and two seconds for video ads. Several agencies have called for 100% viewability within the display & video ad ecosystem. The IAB provided guidelines that suggested 70% was more attainable. Many publishers have made premium-laden viewability buying metrics available, guaranteeing that an advertiser will only pay for viewable ads. Debate still rages as to what is an acceptable threshold and definition of viewability, but studies are proving that focusing on viewability may improve overall performance.

Common sense says that if an ad is not seen, it will not influence a consumer. Though that is true,marketers need to take a smart approach to how to deal with viewability. There are still several challenges the industry must overcome before viewability thresholds can be set in stone. Viewability measurement tactics are flawed because most online inventory lives in non-measurable environments like i-frames; impression delivery methods are not aligned with viewability. Currently, ads set to serve during a session all load when the page loads, as opposed to loading when the user gets to that part of the page. Coupled with the fact that most ad units do not follow the user as they scroll, unpredictable user behavior and page scroll patterns may never allow for ads at the bottom of a page to be seen. Additionally, focusing optimization efforts on maximizing viewability can actually optimize away from high-performing placements (as it is hard to truly optimize to more than one metric).  Marketers can protect themselves from low viewability numbers by ensuring that their ads are being seen in premium, high-quality environments. With the advent of programmatic advertising, real time data can inform a whitelist of high viewability sites that can increase the performance of the campaign.

7)  The Rise of Facebook Video

Facebook has gone from almost no video views just a few years ago to 4 billion views per day.  This rapid growth can be attributed to two key events: the introduction of auto-play video and the ALS Ice Bucket Challenge.  Before auto-play, Facebook had about 1 billion video views per day.  The feature contributed significantly to the amount of videos users were watching, liking, sharing and commenting on.  But the ALS Ice Bucket Challenge significantly increased the number of users who were uploading and sharing their videos, which was primarily done on Facebook.  This one campaign drew more than 17 million unique videos that were watched more than 10 billion times by about 440 million people in 2014, Facebook reported.

As Facebook has done with mobile, they are focused on dominating video as well.  Recent growth has made Facebook a significant competitor to YouTube as the dominant social video platform.  Not only are people watching more video on Facebook, but video uploads have increased significantly, up over 75% in the past year.  This adoption of video by users on Facebook presents a huge opportunity for advertisers to engage with this audience through video at scale.  That being said, advertisers need to think about what video to use and create as it will need to capture the user’s attention – not just for the first 3 seconds, but the first 3 seconds without sound.  While this may pose some creative adjustments, the opportunity will only continue to grow as Facebook attempts to become as an important video platform as YouTube.

8)  Leveraging Location Data

The ability to utilize specific location data on mobile advertising buys has consistently increased ad performance in the mobile space. That being said, it is the historical nature of the data(where a person has been), rather than the timeliness (where they are right now), that makes it valuable.

Since the phone operates as a beacon, data providers are able to record where and when people travel to specific store locations. They know if someone shops at a grocery store three times a month, or once. The historical data can identify a more qualified target rather than merely serving an ad to someone who happens to be in the vicinity of a store location at a certain time (think geo-fencing). If you then layer on purchase data, also available on mobile devices, you have a pretty clear picture of what type of person is most likely going to take action on your product in-store.

By effectively leveraging historical location data, advertisers are enabling themselves to use mobile ads throughout the entire purchase funnel. People do not utilize their cell phones only while they are on the go. If advertisers limit themselves to serving ads to someone while they are in “in the moment” they likely have missed all the mental preparation the consumer has done before that point. By utilizing historical, action-based location and purchase data, advertisers can serve ads to anyone at any point. That being said, historical data (like all data) has limitations as it never tells the whole story.  A user might have stopped into a store once, say by mistake or with a friend, and may not be in market for items found in that store.  But it can certainly help get closer to reaching the right consumer, and expect to see this type of leveraging of mobile data grow substantially in 2016.

9)  Programmatic Native

Native advertising is branded advertising messaging placed adjacent to site copy and content, and it’s designed to look and feel unlike a standard ad experience.  These placements are far-reaching, from advertorials to Facebook newsfeed placements.  Generally, it has been extremely difficult to plan a native campaign due to the varying specs and highly custom nature of the placements.  With the advent of programmatic technology, advertisers are able to upload a small number of assets and ad copy, then dynamically run a native ad experience on hundreds of websites.  With native programmatic campaigns, marketers can skirt around the hurdles of coordinating site-specific creative executions and copy.  This can alleviate strain on the media/creative agencies and client, and can shorten the time it takes to launch a campaign.

Frequently native executions rely on the standard audience and site traffic that comes to the given website organically.  By leveraging data and audience targeting that is available through programmatic buying, marketers can buy native executions targeted to the correct audience, regardless of the website.  Native advertising planned and purchased in this fashion allows for shared marketing and campaign objectives across the entire programmatic buy.  Through a standard optimization model, this strategy can share the same post click funnel goals as the rest of the display and video campaign, creating an even playing field when measuring success.  As the inventory continues to scale, expect to see budget shifting towards native to help advertisers avoid the “banner blindness” of standard display units.

10)  CRM Retargeting Opportunities

The best data companies have to utilize is their own.  The customer data that companies typically have is in their offline CRM system and contain specifics such as each customer’s age, gender, products/services they purchase, responses to various offers, and how long they’ve been a customer.  CRM retargeting allows advertisers to use this offline data to target their customers online.  This goes well beyond cookie retargeting for users that have visited your site, as the advertisers have a lot more data on who that customer is and can create a more relevant ad experience for each customer.  There are more and more opportunities to leverage this data, such as on Facebook through FB’s Custom Audiences offering or through a separate data provider to reach your CRM list through display advertising across the internet.  Google recently announced they would also provide the ability to target their users with first party data across their platforms, including paid search and YouTube, with their new product Custom Match.

There are an endless number of ways marketers can leverage their own CRM data for targeting.  For example, targeting car customers who are approaching the end of a lease, remarketing customers on new promotions or offerings, or encouraging completing a process offline that was started online, such as a loan application.  This tactic can supplement direct mail, email, or other direct marketing efforts.  This data can be used not just to reach existing customers, but to find new ones as well.  Marketers can utilize their CRM data to create look-alike models based on online attributes to reach new users similar to their ideal customer.  While using CRM data is a highly valuable and effective way to advertise, marketers will need to balance these efforts with their customers’ privacy expectations.  With more opportunities for advertisers to utilize their own data, more and more marketers will be testing and growing their efforts in 2016.

By

Leave a Reply

Your email address will not be published. Required fields are marked *