Exclusive Whitepaper: GroupM 2017 State of Digital Marketing

Our Worldwide Media and Marketing Forecast predicts that in 2017 digital39s share of ad investment in the fastergrowth world will at last have caught up with the developed world to around 33 The new and old worlds have contributed an equal tonnage of new digital ad dollars since 2013 If we disregard print which is negative then in 2016 we think digital captured 72 cents of every new ad dollar and TV 21 cents In 2017 this becomes 77 to 17 We do not consider digital as big as traditional TV yet with TV39s ad share largely stable at 42 in 2016 and 41 in 2017 It rode a fiveyear 44 peak 20102014 and some of the share it appears to have shed since then is an artefact of poor measurement 10 countries have already witnessed digital overtake TV with a further five expected in 2017 France Germany Ireland Hong Kong and Taiwan Digital fuels its growth by recruiting longtail advertisers and winning share from other media To this it now adds a serious attempt to win TV39s bigbrand advertising an endeavor which will turn as much on digital39s quality as on its undoubted quantityLast year we were cautious in our estimation of the rate of change and summarized progress as 39the same but more so39 This year we are less cautious and believe that we are seeing changes in underlying technologies in both hardware and software that are advancing us from the Information Age to the Intelligence Age 2017 is the 10th anniversary of the iPhone and the beginning of a sequence of changes that will have equally profound implications for society and thus for marketersSpecifically we look at the rising influence of artificial intelligence developments in augmented and virtual reality the competition for video advertising between television and other video providers the impact of 39relevance39 on the trading of media developments in the application of data to television along with Over the Top solutions the impact of streaming and on demand audio the Google Facebook duopoly live video e commerce privacy market place integrity and fake news From all this we draw some broad conclusionsDespite some new entrants economic value is coalescing around a very small number of companies in respect of advertising Perhaps six companies are global or nearly so three are Chinese and a further handful exist in each of the major marketsamp160 Today39s challenge is to win with the winners and to find ways of aggregating value from what39s left particularly when the 39minor39 participants are still valued by their audiences The only threat to this new status quo is regulatory and 2017 may be a hugely significant one in terms of privacy regulation Organically developed challengers will be exceptional and rareIt would be a mistake however to ignore the enduring value of television audiences remain immense and its communication potential enormous It would equally be an error to forget that even in 39traditional39 media there has always been a dividend for creativity amp8211 more people remember amp8211 and relevance amp8211 more people actDescriptions of monopolies and duopolies in either advertising or ecommerce have to be tempered It39s true that Google Facebook and Amazon are the biggest and most powerful players in their categories but opportunity still abounds for brand builders direct to consumer and multichannel retailers in partnership with a broad swathe of digital and analog inventory suppliers amp160This applies in all parts of the marketing funnelThe goal for marketers has always been to outperform their competitors at every touchpoint of communication and distribution Nothing has changed except the exponential complexity of the platforms and enterprises and their multifunctional nature You can sell goods from a magazine app you can execute customer service on a social network you can buy advertising inventory from a retaileramp160 One a single platform you can advertise sell fulfill the order and deliver customer service A single piece of content or more accurately intellectual property can be watched in linear form or on demand as a show a still a clip or a multihour binge and multiply reconfigured for multiple platforms The complexity is compounded by abundant even excessive data complex measurement and attribution challenges and new creative challengesAround a decade ago the industry was swept along by the apparently new idea of media that was paid owned or earned At a time of high visitation to brandcorporate web sites and then brand Facebook pages the construct was legitimate Two simple formulations prevailedBuild a web site or a YouTube channel owned media and drive traffic to it via banner advertising and paid organic search with the expectation that deeper engagement would followBuild a social media presence and buy likes or followers in the expectation that the same would happen with the added benefit that your posts would reach those that liked you and that their interactions with you would be shared with their own social connections The earned media ambitionNow of course brand web sites are largely becalmed and the organic dividend of the Facebook 39like39 has been diminishedOnly the exceptional survive in any useful form and it39s certainly true to say that exposure you earn is largely a function of the media you own This means that advertisers have to deliver an exceptionally high degree of usefulness to their audience and in owned media that means telling them something they did not know how to apply a great make up look or paint a window frame It means building apps and digital destinations that allow the user to choose find buy or book It means creating content with a clear understanding of the value it creates and the likelihood of it leading to a share or a recommendationAll of these are a function of some combination of expertise well integrated systems outstanding service and creativity The objective of these efforts has changed also Of course sales and lifetime value sit at the top of the hierarchy of marketing but close behind is the gathering of high quality data High quality data is data that helps you acquire the customer you don39t know and to better understand the customer you do knowTo succeed advertisers need to understand and deploy a marketing tech stack which holds the data on the known customer and which enables the activation of that data to the greatest effect As usual this creates a divide the more direct the customer relationships the more easily acquirable and applicable the data Increased efficiency is relative and even the most 39data poor39 advertisers have embraced programmatic delivery at scale to good effect When used to target the right cohorts in the appropriate context the advertiser succeeds in reducing wastage while retaining the value of context It39s not always about the pursuit of the known effect of every impression but also about knowing that every impression has the potential to contribute to a positive business outcomeThe creative challenge persists at four levelsGetting the attention of the consumer in a low attention world As the buyer pushes the seller towards viewability the consumer is pushing the brand to greater 39watchability39Meeting the costs and measurement implications of the constant iterations of formats and functionalityFinding the balance of enough variation to meet the needs of ever finer segments without undermining the overall brand proposition The Marriott Hotel Bogota has 57 images on Expediacom Marriott Starwood operates over 7000 properties That39s a lot of imagesThe creation of new classes of content for e commerce environmentsIf owned media now require a higher threshold of usefulness so should advertising itself The value exchange between the user and the advertiser has become increasingly explicit Attention is a reward not a right Useful advertising is a function of relevance which in turn is a function of time place cognitive targeting and creation context and actionability The creative brief as well as the media brief now needs to reflect this as well as understanding of the efficient frontier of variety the point at which the cost of granularity exceeds its valueWe have noted before that every brand needs a data storyFirst an absence of a data story leads to a reduction in discoverability a reduction of relevance and a loss of advantage in algorithmically mediated platformsSecond as augmented reality teaches consumers to expect a data overlay on the real world brands might wish to participate in thisThird brands need an actual voice or at least the ability to respond to the human voice Voice search voice commands to IoT devices from Echo to the autonomous vehicle will in some cases at least require a spoken responseFinally as artificial intelligence becomes part of the taxonomy of everything the structured and unstructured story around the brand its purpose origin and the conversation it creates will become part of the consumer experience It had better be a good oneImagine this 39Alexa what39s the most recommended antidandruff shampoo39 Or this 39You ordered Brand A Brand B has a higher average recommendation which one would you like39Download the full whitepaper from GroupM belowClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this article are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers

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Exclusive Whitepaper: GroupM 2017 State of Digital Marketing

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