A couple of weeks ago, I gave a presentation to our sales teams about important ad tech and marketing tech trends that I see. It went pretty well, and it wasn’t — I don’t think — complete BS, so I thought I would turn it into a blog post. Here it is. Enjoy!
To start, almost every marketing presentation includes a slide with a “map” of the zillions of tech companies that stand between advertisers and publishers. Another cliché of marketing presentations is the line from John Wannamaker: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
The reason these appear so frequently is because they reflect challenges that all marketers face:
- New tools, new channels, new partners… new everything
- Marketers are always fighting to get more bang from their buck… not just spending more bucks
These facts bring with them a number of common complaints that we need to address, but we need to do so in a way that speaks to each of our clients’ and prospects’ individual needs.
So, I’ve picked out some trends and predictions that are a step more specific that I think will be part of a lot of our conversations this year.
I should warn you: any predictions you see here are my own, so my own interests and biases probably color them. I’ve tried to include a lot of links to supporting materials, but only time will tell what will actually happen. My hope is that this presentation will give you some food for thought.
Here are the major categories I’ve picked to discuss today:
- Measurement & Metrics
- Privacy & Security & Fraud
- The On Premise-to-Cloud Glacier
- DMP vs The Marketing Cloud
- Mobile & Television (R)Evolutions
Measurement & Metrics
Viewability has been a huge topic of discussion for some time and culminated in the IAB issuing a standard for what counts as a viewable ad. Unfortunately, the standard they offered made no one happy at all. It was 50% of the ad viewable for 1 second. Advertisers didn’t like it because it wasn’t strict enough to reflect any significant level of exposure to the ad message and publishers didn’t like it because it wasn’t a high enough bar to distinguish premium publishers from the rest of the pack.
Thankfully, the IAB has improved their recommendation to 70%, which seems more reasonable. So, look for continued discussion around standardizing how this is measured and an increase in the number of advertisers asking for it as part of their CPM negotiations.
Engagement, though, is still an unknown. What do people mean by “engagement” really? Does it mean clicks? Does it mean expanding an ad or watching a whole video? My opinion is that it varies by ad format and even by brand. Even so, I think you can expect to hear lots of people clamoring on about engagement this year.
Both of these, of course, are extensions of the recurring desire for measurement. And EVERYONE is saying measurement is “going to be” huge. I would say that it is already huge and will always be huge.
Privacy & Security & Fraud
I’ve lumped privacy, security, and fraud into one group because they are all concerns related to the viability of the digital advertising business. None of these headlines should be a surprise to us, but what it means is that these topics are going to get even more attention.
In the realm of security, there were over 780 data breaches last year including Sony, JP Morgan Chase, Staples, and Home Depot. Some of these made huge headlines and have spurred some legislative proposals around when businesses have to disclose to customers that a breach has occurred.
And that naturally pushes consumers to be even more concerned about their privacy and what happens to their data. I agree with Acxiom’s Chief Privacy Officer’s, predictions that we will surely see even greater government inquiry and involvement in the realm of consumer privacy.
And, naturally, ad fraud has to be a part of this conversation as well.
I think fraud levels really reached critical mass in 2014. Google said that less than half of ads are ever seen. The WSJ reported that a third of all web traffic is bots. And the IAB issued a reports that said click fraud costs marketers $11B a year. But we saw a little movement from the industry to start taking fraud seriously as well. Google bought Spider.io. The IAB formed an anti-fraud working group. So, I think we will see more market-wide attention given to fighting fraud, although I do also think it will be a long, long fight.
The On Premise-to-Cloud Glacier
I see the move to the cloud as something of an inevitability for 90+% of the market, but it’s going to be a very long, slow process. But the Cloud Computing War is not over. Amazon is clearly in the lead – so much so that the aggregate capacity of the top 15 cloud providers is only a fifth of what Amazon has. But Salesforce, Microsoft, IBM, and Google are still in the fray.
Big Data is such a 2013 buzzword, but it’s real. That means that scale is becoming a major challenge and expense for IT and marketing teams. Some have said that it’s a “red alert” situation already and aside from the Fear Uncertainty and Doubt (FUD) that Big Data strikes for CIOs there are definitely some advantages to moving to the cloud. Nevertheless, businesses tend to be understandably conservative about making major changes that could put major assets like consumer data at risk.
The cost benefits seem pretty clear for most companies, but questions about security, a lack of skills/knowledge for handling cloud-based systems, and general worry about change and the unknown are all issues that loom large for many.
So, I think this trend will pick up some additional speed in 2015, but it’s still a very long road.
DMP vs The Marketing Cloud
When it comes to ad tech adoption, one of the big questions is whether marketing clouds will dominate or if advertisers and publishers will cobble together their own solutions from the various offerings out there. And as much as we hear about marketing clouds from folks like Salesforce, Adobe, Oracle, and IBM they are far from dominant.
On one hand, we know from our own experience that there are a lot of customers out there who aren’t comfortable putting all of their eggs in one basket. They prefer to buy solutions piecemeal.
On the other, the value proposition to a marketer looking at that Lumascape diagram is pretty clear and once they’ve adopted one of the solutions within a marketing cloud it’s pretty easy to buy in to another one. And consolidation via M&A activity has been a constant for the past few years and now it’s a real challenge to find a standalone DMP that also has the scale to do what marketers need to connect channels.
A lot of these marketing clouds are being built by M&A activity, though. That means there are likely questions about how well integrated they are with the other solutions. There’s a ramp-up period.
In either scenario, there are gaps between the different solutions that marketers actually use. They don’t live their work lives only in the marketing cloud or on the DMP or in their CRM system.
Mobile & Television (R)Evolutions
Let’s start with mobile. Everything mobile! No surprise: 20% of the world has a smartphone. I was listening to a Forrester webinar recently and they mentioned that something like 70% of Walmart shoppers access their cellphones while in their stores as part of their buying process. I may not have that statistic quite right and I’m not sure what they mean by it exactly, but it’s pretty undeniable that phones and tablets are a major part of the customer journey today.
But marketers are struggling to really break in to it and the numbers on mobile ad tech make it look like it’s still an emerging space. Part of that is because the platforms themselves are so tightly controlled by the carriers and that mobile is still technically constrained (smaller screens, fewer cookies, protected IDs, etc.) compared to desktop. I don’t see anything changing with that any time soon.
And even though ad spending is shifting toward mobile in some pretty big ways the ROI remains unclear. Marketers seem to be following the traffic, but the traffic isn’t necessarily resulting in the desired “engagement” or conversion activities. My best guess there is because the UX isn’t yet completely optimized for mobile and simple tasks on a desktop can be rather tedious on a small screen. The biggest recent change to overcome that is Apple Pay, though. That stands a real chance of changing mobile commerce in a big way. So, keep watching.
Television is a similar story. Overall, television is saddled with antiquated regulations and lots of old technical infrastructure. And, ironically, one of the biggest barriers to technical advancement for TV is the nearly $70B they rake in each year in advertising. It makes them very, very reluctant to do things that might compromise that revenue stream. But progress is being forced upon them.
Spurred by the rise of original content from online-only systems like Netflix and Amazon Prime, as well as over-the-top providers like Roku and Hulu, we are seeing ad tech providers moving to anticipate the technical shift in traditional television providers. For instance, Adobe has relaunched Auditude, their programmatic video system and integrated it with their cloud. And that technical shift is definitely happening. Comcast took a major leap forward in the last 18 months with their launch of their X1 platform. So, the capabilities to manage some portion of the television advertising spend and delivery from digital systems like the Marketing Cloud are coming.
Bonus Bloviations Lightning Round
I know I didn’t touch on some of the key trends and buzzwords that came up in 2014, so I want to do a lightning round on some of those items that came to mind while I was brainstorming for this presentation.
- Programmatic is here to stay. I am actually kind of shocked that the adoption curve hasn’t been steeper, but I feel like these tools legitimized themselves in 2014 and we’ll start seeing this become more of a capability or feature of other tools rather than a distinct set of tools unto themselves.
- Wearables are emerging tech and the marketing opportunities are not clear yet. I did see a couple of weeks ago that a company announced some capability for advertising on the Apple Watch which isn’t even out yet. That sounds like the most obnoxious user experience ever, so I’m not hopeful for that company. In fact, I hope they never sell a single unit.
- My tech feeds love talking about new communities and emerging social apps like Kik and Yik Yak. It’s always about what the kids are or aren’t doing these days. I think, though, for marketers the best approach is going to be to wait and see. Monetization strategies for these apps aren’t always clear and advertising opportunities seem experimental. There are going to have to be some major brands willing to just throw some money and do some experiments.
- The Internet of Things is similarly emerging. Could it feed into that Big Data nirvana that so many marketers imagine? Maybe, but if this is the silver bullet then we have a couple bazillion years to wait until it’s ready.
- Last year there was an increase in use of the phrase “Deep Learning.” I find the notion to be a really nerdy and interesting evolution in the Big Data story. But developing Deep Learning capabilities is expensive and time-consuming. It’s also an area where there may be a lot of people talking about insights that either aren’t all that actionable or don’t deliver any notable incremental lift in revenue. But I’ll keep watching it because it’s neat.
So, there you have it! My 2015 trends, predictions, and observations.