Predictions: 16 digital marketing trends for 2016

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 21^st 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

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9. Digital transformation moves to the c-suite

This year, marketers have been keen to make better use of the marketing technology tools available to them, kick-starting the digital transformation discussion. In 2016, Squiz’s Syriatowicz anticipated marketers will start to more effectively collaborate and share responsibility with senior management on these initiatives.

He expected collaboration will also broaden beyond typical IT teams and into any department, whether it be sales, HR or finance.

“While more of our projects for customers are being driven by marketing teams than ever before, these projects cannot sit with just one department,” he said. “In 2015, only 18 per cent of marketers described their digital strategy as visionary and 37 per cent felt their digital strategy was either inadequate or non-existent. More cross-department collaboration and buy-in from the c-suite will help projects get off the ground.”

ADMA’s Sangster agreed leveraging technology as part of an effective digital transformation strategy in 2016 will be all about forming effective partnerships.

“The rush to digital transformation has left many organisations with a wealth of technology but a dearth of people that can use it effectively to deliver its promise,” she claimed. “2016 is going to be less about the technology itself and more about the rise of consulting technologists who will work in partnership with companies to help them leverage the technology they already have.”

10. Marketing platforms consolidate

At the start of the year, Squiz predicted the growing number of marketing technology platforms available would drive consolidation over the next three years. Reflecting on customer behaviour in 2015, Syriatowicz said this prediction is still on track in the next 12 months.

“Customers increasingly want to consolidate their marketing platforms, rather than use multiple tools with disparate information in several locations,” he said. “Essentially, they’re looking for one point of truth that provides clear and valuable insight into their campaigns and how they are affecting the business overall. Consolidation of IT will continue in coming years, as marketers will increasingly want to simplify what tools and technologies they work alongside.”

11. More marketing mathematics

For Livefyre’s Scott, 2016 will also be the year of ‘mathematical marketing,’ where marketers become even more attuned to measurement, analytics and accountability.

“This will be particularly true among brand marketers as they push to measure engagement,” he said. “In 2016, brand ambassadors will share user-generated content, social experiences and participate in online communities. Building a loyal fan base is a necessity, but it won’t impress your board room unless you have the numbers and ROI to back it up.”

12. APIs to drive digital transformation

APIs will be one of the biggest drivers of digital transformation, according to regional VP of integration platform Mulesoft, Jonathan Stern. He saw businesses large and small increasingly recognising the important opportunities being created by establishing an open approach to data.

“The best way to accomplish this is through APIs, which allow for the fluid exchange of information between internal systems and those belonging to third parties,” he said. “When APIs can be more easily aggregated and delivered to developers on demand, the move to the new ‘connected enterprise’ – an enterprise that lives outside its own four walls – can accelerate.”

Stern pointed to Expedia as a prime example. The online travel site has an API that allows people using third-party websites, such as Kayak, to tap its functionality in order to book flights, cars and hotels.

“Nearly half of Expedia’s $4 billion revenue is achieved by delivering its services to partners through affiliate APIs, which have become a driving revenue source for the company,” he explained. “Cloud pioneer, Salesforce, meanwhile, generates 75 per cent of its revenue via APIs.”

Businesses can also reach a new group of promising customers by pairing their application with another company’s API in a similar industry.

“For example, United Airlines has recently been able to take advantage of Uber open API,” Stern said. “When a customer is in the United Airlines app, they can sync it up with their Uber account, so that in the event of a plane delay, the API communicates to Uber app to delay a driver’s pickup time. This opens up a whole new ecosystem of connectivity for United, therefore driving new revenue opportunities.”

13. Customers demand more authenticity

According to Guardian Australia’s McClelland, consumers are overwhelmed by the wealth of content available daily. To counter this, he said brands will need to look to connect with consumers on a more meaningful and authentic level.

This means integration between digital marketing and experiential will become increasingly more essential.

“We’ll also see greater emphasis on off-platform activity as we see the impact of Apple News, Facebook Instant Articles and Snapchat,” McClelland predicted. “Meanwhile, brands will need to increase usability and produce high quality mobile content to stay ahead.”

14. Data gets actionable for competitive advantage

Digital marketers will need to lift their competitive game if they want to remain relevant in 2016, according to Oracle Marketing Cloud vice-president, Paul Cross. And to do this, marketers need to focus on making data actionable.

“Using data to drive individualised, targeted communications and linking it to ROI is now normal – every marketer should be doing this,” he said. “The next step is building competitive advantage by creating unique data sets that enable marketers to out-perform their competitors in order to deliver more delightful, profitable marketing experiences than their competitor. The rapid rise of the Data Management Platform [DMP] is behind this.”

For Cross, data is vital in connecting customers with content that inspires transactions.

“If you don’t do this, your competitors will,” he warned. “This needs focus on organising your disparate data in one place, making content individualised, having the ability to execute automated, cross-channel marketing through all of the channels that matter.”

15. Refocus on nurturing relationships inside and out

Several industry commentators agreed that digital growth and maturity required an ability to develop nimble teams and foster close, professional business alliances.

Founder and director of online dining platform, The Urban List, Susannah George, predicted 2016 will be about fostering a culture of ‘educating up’. This is about enabling younger teams to lead the charge in exploring new digital techniques and platforms, sharing learnings and potentially game-changing insights with their superiors.

“Digital marketing has evolved from being a game of numbers to one of relationships,” she said. “It is imperative we cultivate relationships with our customers and prospects that are iterative and sequential, nurturing them through a discovery journey and providing them with the content or materials they need, dependent on their current standpoint.

“It’s about understanding what they have and haven’t been exposed to already, what their mindset is at the time of viewing your brand, and what will have the most impact on them when you next cross paths.”

As a result, George also saw 2016 as a year for building and nurturing stronger customer relationships outside the organisation.

“It’s about creating an ability to generate a stronger relationship with our customers, based on more insightful, effective nurturing – both through retargeting and automation,” she said. “This means forging connections and understanding of their individual needs and motivations. It also means increased customisation of our interactions and content creation, tailoring our content strategy and distribution to the wants and needs of individual readers, before they even know what they’re looking for.”

16. Forget digital, the future is all about technology

According to managing director of creative agency Imagination, Anthony Gowthorp, the concept of ‘digital’ will die in two years as it becomes a core part of every action, activity and engagement. The future, he claimed, is all about technology.

“Every creative does digital, it’s the ticket for entry much the same as ‘design’ was some 15 years ago,” he said. “But it’s where digital is moving that’s the game changer.”

Imagination has just launched an Innovation Lab to help marketers better understand how to use technology in customer engagements.

“Technology is able to broaden the spectrum of customer experience touchpoints beyond digital - be this proximity, ambient or another technology,” Gowthorp claimed. “We will start hearing more about the potential that technology marketing offers brands.”

It is the increasing prevalence of interactive technology that will shape key milestones for the industry in 2016 and beyond, he said.

“This is about truly experiencing a brand or a business message within an environment or situation outside of mobile phones and computer screens where people work, live and play,” Gowthorp added. “Nirvana for brands is their unobtrusive infiltration of where people work, live and play. This is where real engagement and traction is achieved. This is where technology - as opposed to digital - allows marketers to be in more spaces and in front of consumers, more often.”

Funnily enough, however, the key for marketers goes right back to marketing 101: Focusing on the business objective.

“Identify what your business problem is and who the people are that you want to engage,” Gowthorp advised. “If you focus on that, rather than delivery, you’ll open yourself up to this new world of marketing. But if you come to the table being prescriptive and determining what you want, you immediately put yourself in a box.”

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