Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
As 2015 draws to a close, digital marketing experts agree it has been a milestone year where online has transformed how businesses interact with customers.
We’ve spoken to a raft of marketing leaders, analysts and industry commentators about what the digital marketing mix will look like in the New Year and whether 2016 is shaping up to be even more competitive, complex and evolutionary.
1. Ad spend and viewability gain the spotlight
With the growth of digital ad spend, issues such as viewability and ad fraud are becoming more pressing, a recent Warc Toolkit 2016 found. The study, released in collaboration with Deloitte Digital, raised concerns about whether ads will be viewed by humans or simply bots, an issue further compounded by the increasing variety of intermediaries emerging in the ad tech space.
“Marketers need to improve the level of viewability they are getting across display and video campaigns if they want to see a significant lift in performance,” A/NZ managing director of Integral Ad Science, James Diamond, said. “With 60 per cent of ads sold never making it onto a screen, the opportunity to drive performance by eliminating waste is huge.
“The brand safety fails seen in 2015 will influence a brand’s decision to deploy brand safety solutions across all their digital media in 2016. And if we can reduce the risk in digital while still capturing the right audience, we will be able to encourage even more investment in digital advertising.”
2. Ad blocking debate intensifies
The Warc report also predicted ad blocking will remain a significant issue in 2016. Managing director of Guardian Australia, Ian McClelland, said alarm bells are ringing for many in the industry around the proliferation of ad blocking tools.
“To counter this, there will be greater emphasis on context and audience behaviour in an effort to improve and respect the experience for consumers, which is likely to shift the focus to more trusted ad environments,” he predicted.
“The spectre of adblocking looms large over 2016 but it will ultimately be the customer who will determine how it will play out,” ADMA CEO, Jodie Sangster, continued. “Our industry should and will raise its game on ad creativity, user experience and relevance but it remains to be seen if customer choice will rewrite the next chapter of our digital world.”
CMO of beauty subscription service bellabox, Stephanie Michel, is watching the ad blocking debate unfold and noted that it’s early days.
“I am curious to see how it will challenge digital marketers in 2016 if display inventory starts to decrease because of ads blockers,” she said. “If this was to happen, I predict social media would win even more budget from traditional display channels.”
As ad blocking tools become more popular and sophisticated, Salesforce Marketing Cloud CEO, Scott McCorkle, suggested marketers will increasingly value premium publishers that embrace native advertising, along with a good user experience.
“CRM plays an important role here to ensure any digital communication is both targeted appropriately to a given audience, and relevant to where they are in a customer journey with that brand,” he commented.
“It’s also important to note ad blocking is one of the many technological evolutions, along with the shift to mobile and apps, that increasingly make cookie-based ad targeting less relevant going forward.”
3. Marketers embrace video content
Growing interest in visual content will drive greater investment in video in 2016, according to the Warc Toolkit 2016. While 2015 was a significant year for online video, the report claimed the medium will become even more vital to the digital marketing mix next year. Online video is particularly key to engaging those under 18, or Generation Z, with many teenagers preferring YouTube to traditional TV.
As examples of brands that are embracing new video interactions, the report pointed to Adidas, which used in-feed videos, and Clean & Clear, which used Google’s Brand Labs on a three-part ‘pull’ and ‘hero’ video campaign strategy.
“Already, we have seen a significant increase in the amount of money businesses spent hiring for video-related skills such as Adobe After Effects, Video Production and Motion Graphics,” Forrester’s 2016 report stated.
The analyst firm also expects powerful platforms like Snapchat and Instagram to build their own video ad offerings, while marketers will start bringing video producers in-house in order to create high-quality content quickly.
4. Automation ushers in next-gen contextual marketing
With empowered customers now controlling their options via multiple channels and devices, customer-driven changes will remake every industry, according to Forrester’s predictions for 2016.
As a result, the analyst group said early experiments in contextual marketing will manifest into invaluable lessons in 2016, pushing marketers to build better individual customer connections, and leverage automation technology to gain deeper customer insights across all marketing touchpoints.
“The mantra for marketers will be quality over quantity and really getting to grips with content marketing,” McClelland added. “We’ll also see brands working more with trusted publishers to deliver a stronger call to action and greater long-term ROI.”
5. Facebook becomes an afterthought for social relationship marketing
The lack of value from organic Facebook posts this year will result in the platform losing its edge for relationship marketing in 2016, Forrester predicted. Although media buyers will continue to buy Facebook ads, the analyst firm said organic social marketers will prioritise Instagram, Vine or their own branded communities in 2016, then post to Facebook as an afterthought.
While Facebook’s video platform push has achieved phenomenal success, gaining around 8 billion views daily, Google advertising and Google AdWords management company, SponsoredLinx, said the implementation of Instagram ads and video are now equally as important. Both also illustrate the future of media as being on handheld devices.
“For small- to medium-sized businesses everywhere, 2015 has been the year of digital. If you’re not online, then you’re missing out,” SponsoredLinx CEO, Ben Bradshaw, said. “Businesses need to understand the technologies and applications driving this change as the growth in mobile commerce will only accelerate next year.”
“You can now build a whole brand on social media with the help of profiles that might not be celebrities on traditional above the line channels but are powerful authorities on social media,” bellabox’s Michel added. “They might still be the guy or girl next door, but brands would die to get their endorsement and millennials would buy different things under their influence.
“A whole ecosystem is now growing around those profiles, from specialised agencies to platforms which are nothing less than affiliation platforms only specialised on Instagram or Youtube. This trend is definitely one which has brought something new and powerful in the online advertising industry in 2015 and will only become even stronger in 2016.”
But CMO of content marketing platform Livefyre, Dave Scott, disagreed. He said the key emphasis in 2016 should be on bringing the engaging elements of social media back to a brand’s websites and apps, which he claimed will become far more valuable as the organic reach on social networks continues to plummet.
“Digital marketers should start to emphasise building loyal communities on their own websites and apps, rather than outsourcing content to third parties such as Facebook or Instagram,” Scott said. “That way, digital marketers can make and change their own rules, and build skills in community management at the same time.”
6. Ecommerce challenges will escalate
As the digital retail space expands and matures, a new set of challenges are on the horizon for 2016 including data privacy, tighter compliance requirements, increased competition, customer data breaches and tailoring the omni-channel experience across retail segments.
In light of these challenges, Forrester said ecommerce marketers now need to shift priorities from what they need to offer customers, to how to deliver more value to customers more quickly.
“In 2016, consumers will be continuously using multi-channel communication and mobile devices to interact with their favourite brands,” senior VP of sales for retail technology company CitiXsys, Paula Da Silva, said.
“Marketers, especially in the retail space, will need to embrace omni-channel strategies if they want to face the challenges of these new behaviours. Using omni-channel strategies enables the design of ultra-personalised and effective loyalty programs, as well as targeted promotions that will increase sales.”
Forrester also predicted marketing professionals will be under increasing pressure to deliver measurable business outcomes next year, driving the need to formalise the customers’ path from digital marketing engagement to purchase.
“Customer experience is going to be absolutely critical in 2016,” Squiz Group CEO, John-Paul Syriatowicz, said. “Every encounter your customer has with you adds to their ‘experience’ with your brand. When you compare the experience you want them to have with what they currently receive, you’ll probably find there is a gap between desired experience and reality.”
CMO of print on-demand platform, RedBubble, Faith Sedlin, saw the power and control of the purchasing process shifting from marketers to consumers.
“Consumers determine when and how they wish to interact with brands and expect information to be personalised,” she said. “In this context, marketers must invest in multi-channel measurement and approach insights holistically to rethink which information is delivered to which consumers, when.”
7. The age of hyper-personalisation arrives
According to Teradata Marketing Applications, marketers can expect to see more emphasis in the New Year on hyper-personalisation to combat the background marketing noise. In certain circumstances, this will need to be done in real-time.
Unlike messaging designed for large numbers of people, hyper-personalisation sees marketing messages tailored to each individual according to data insights.
“Not many companies are doing hyper-personalisation well, or at all,” Teradata Marketing Applications, principal consultant, Umporn Tantipech, claimed. “It’s likely that it will become far more prevalent in 2016, as companies become increasingly aware of its value to drive higher Net Promoter Scores and campaign return on investment.”
To achieve hyper-personalisation successfully, Tantipech said companies will need to automate both customer interaction management and big data analytics capabilities.
“Organisations need to bridge the channel silos, and unify data from all transactions and interaction history to gain a better view of the individual,” he said. “Once they establish a unified data ecosystem, with a particular focus on mobile devices, real-time, hyper-personalised marketing will be a step closer.”
Salesforce’s McCorkle called this trend towards hyper-personalisation ‘Marketing’s Law of One’.
“While the 20th century economy was all about mass – mass production, media, consumption and transit - the 21st century is focused on the individual and consumers want as much personalisation as possible,” he said. “For decades, marketers have focused on audience segmentation, grouping people together based on demographics and behaviour to deliver more targeted communications.
“Today, we are quickly moving from mass media to personalised media, which means audience segments have reached a new level of refinement that makes it possible to focus on the individual. It’s what I’m calling ‘Marketing's Law of One’.”
Dave Bentley, the managing director of digital marketing agency Lowe Profero, part of the Mullen Lowe Group, agreed. To do this, brands should build a single customer view across all channels and start experimenting with a rule-based marketing strategy to deliver more relevant and timely communications across their entire ecosystem.
“With consumers blurring the line between digital and physical retail experiences, there is an even greater opportunity to put in place omni-channel and location-marketing strategies to further enhance overall the customer experience,” he said.
8. Mobile revolution accelerates
As the mobile mind shift speeds up even in 2016, consumers’ expectations will soar, forcing marketers to become even better at tapping contextual data, the Forrester report stated. To do this, more companies will treat mobile as core to the whole customer experience, not just as a channel, while an ocean of vendors eager to capitalise on this frenzy will teem with new players emerging as existing ones join forces or die off.
By integrating mobility into marketing platforms, companies can create and deliver highly-personalised messages that take the customer’s actual locality into consideration, Tantipech said.
“Marketers that unify data from mobile device activity to the greater data ecosystem can create far more personalised messages, and deliver them to mobile devices at the right moment,” he said.
According to CMO and co-founder of online hotel booking platform HotelQuickly, Christian Mischler, search will become increasingly mobile. For mobile-first companies, Google index can now analyse the content of an app and stream it to Android users, removing the need to actually install the app.
“This is more convenient for the end user as an app does not have to be downloaded, which saves time and data,” he explained. “For marketers, this offers new potential but also some risks, if customer retention is threatened.”
Up next: The second 8 of our top 16 digital marketing predictions for 2016