Somebody wiser than ourselves once said: “Difficult to see. Always in motion is the future.”
Along those lines, nobody in marketing has a magic crystal ball to predict the next big trends in the industry (except for the full-blown Star Wars revival that’s about to sweep advertising at hyper speed).
But watching the game closely – and talking to some experts in the industry – allows for some informed predictions on where the action is headed in 2016. So without further ado, here are Selligent’s five digital trends that will strike with full force in 2016:
1. Ad Blocking: High noon for free online publishing models
For the past decade, a thriving online publishing landscape has relied on a simple formula: Consumers get to read and watch quality content free of charge – if they are willing to tolerate advertising in the form of banners, pre-roll clips, or programmatic ads.
This model came under duress in 2015 with the rise of ad blocking software. This year, 16% of the US online population used ad blocking software, an increase of 48% on 2014. For publishers, this represents about $10.7 billion in lost advertising revenue (PageFair).
In 2016, the “ad blockalypse” will decide the fate of many small-to-medium-sized independent online content providers. Marketers are poised to migrate their digital advertising budgets to the walled-in properties of big platforms such as Google, Apple, Snapchat, and Facebook – where ad blocking is not allowed.
Large-sized publishers are already firing back, including Germany’s Axel Springer: In late 2015, the behemoth with a reach of over 98 million users single-handedly banned ad blockers from news sites such as BILD and DIE WELT. In November, Yahoo! barred users of ad blocking software from reading their browser-based emails. Shots have been fired, the battle will come to a head in 2016.
Why it matters: When digital transformation eradicated 33% of jobs in the newspaper segment, many professional journalists fled the sinking ship to lifeboats such as blogs and independent online news platforms. Without ad-based funding, their future is uncertain.
2. Mobile moments: Enhancing daily situations with contextual marketing
The concept of “mobile moments” goes back to 2013, when Forrester Research outlined the great potential of engaging consumers with contextually relevant messages and perfect timing. Mobile moments have been building buzz ever since, and in 2016, mobile technology will finally be ready to take digital marketing beyond customer journeys – and into engagement that’s as situational and contextual as possible.
Apple’s latest mobile operating system update, iOS 9, already includes “smart” situational predictions based on behavior patterns – including which app users will want to use next, or where they will go in their car and what traffic will be like along the way. Next to these device interactions, marketers will also create mobile moment magic with data from beacons connected to CRM, GPS signals, and input from “wearables” such as fitness trackers. As a result, emails, push notifications, text messages, and social alerts will reach consumers with relevant information and offers at just the right time.
And make no mistake: Mobile marketing moments are far from limited to mobile devices. US company Gas Station TV captures drivers’ attention at the fuel pump with televisions at 3,000 gas stations across 45 states generating 52 million monthly views. And in 2016, German automaker BMW partnered up with online ride service Uber to surprise customers with a magic moment: a ride in their yet-to-be-released 7-Series BMW limousine. Hopes are that moments spent with the new car may result in a car purchase. Smart!
Why it matters: Micro moments mark a departure from linear customer journeys, putting an emphasis on presenting the right message to the right customer across the right channel at the right time. The key to success: customer data, leveraged in a next-level omnichannel audience engagement platform.
3. Native advertising: Telling stories, winning consumers
As a consequence of ad blocking, more and more advertising now “lives” inside the content. In 2016, a full-fledged push into “native advertising” – with product embedded in useful content – is putting a focus on quality.
And it’s working: In 2015, 61% of consumers already feel better about a company that serves custom content – and are more likely to purchase from that company (ContentCouncil).
To no surprise, the shift toward content marketing is already changing the marketing landscape: First of all, spending on “native ads” is skyrocketing, and expected to reach $4.3 billion in 2015 (Advertising Age). In a current Forrester Research study, 45% of companies questioned intended to increase content marketing budgets for 2015 budgets, with “native” advertisement emerging as a panacea to the dreaded rise of ad blocking software (see 2.).
Second of all, brands are leaving it to the pros, with 62% of companies now outsourcing their content marketing (InboundWriter).
Meanwhile, another big trend – similar to driving personalization on owned web properties (see 4.) – sees brands buying media companies or becoming media companies. We’re talking to you Red Bull, Vice Media and GoPro!
Why it matters: With a focus on relevant storytelling, content marketing is merging the fields of sales and marketing – always under the watchful eyes of consumers demanding quality content for free.
4. Behavioral Targeting: Engaging customers on their preferences
The year 2016 takes consumer empowerment to the next level. According to research by Gartner, 89% of businesses will compete mainly on consumer experience by 2020. And the companies that will outperform in this segment, are the ones who know their customers well and build long-term loyalty.
Behavioral targeting holds the key to creating these kinds of dynamic online experiences based on behavioral data specific to each customer.
But wait a minute, isn’t retargeting all the hype right now?
Sure, retargeting will remain an important arrow in the marketing quiver in 2016, as display advertising (banner ads, retargeting) accounts for 34% of online marketing spend (Forrester Research). It’s actually growing at an annual rate of 20%, and currently second only to search engine marketing (47% of marketing spend).
But the problem with retargeting: It happens outside the brand’s owned space – on websites where retargeted banner ads are bidding against offers from competitors. And banner click rates are dwindling, while ad blocking is throwing a spanner into the works of programmatic advertising (see 1.).
Instead of relying on retargeting, websites powered by behavorial data can engage customers in one-to-one conversations, based on constantly updated 360º profiles for each visitor. Solutions like Selligent’s Target module guide users to website segments that suit their needs, supported by compelling offers.
Why it matters: As the bidding war for retargeted display space rages on, brands are capitalizing on their owned space – the company website, adapted to customer needs.
5. Virtual Reality: “Transporting” consumers with storytelling
Hold on to your seats! Virtual Reality (VR) technology is poised to go mainstream in the first quarter of 2016 with the arrival of consumer headset, the Oculus Rift, closely followed by Sony's Morpheus, Samsung’s Gear VR, and HTC's Vive.
For marketers, Virtual Reality is about more than just video games and storytelling. The stakes are higher than ever: tech consulting firm Digi-Capital expects the VR and augmented reality markets to reach $150 billion by 2020.
Creative agencies are leading the way with VR projects that dazzle consumers while boosting bottom lines: Travel provider Thomas Cook allows customers to “test-drive” vacations on VR headsets at stores in the U.K., Germany, and Belgium. And VR-promoted vacation revenues are already up 190% – proof that VR unlocks real payoffs.
As Virtual Reality technology spreads, the challenge for marketers will lie with feeding the immense hunger for new content. It’s an expensive bargain: While VR headsets will most likely retail for around $399, filming and producing VR video and audio content – picture at least 12 cameras mounted on a 360-degree filming rig – is a cost-intensive prospect.
But the returns are equally enticing: When consumers dive into virtual experiences such as surfing lessons, tropical vacations, and virtual visits to real-time live events such as lectures or music festivals, they leave miles upon miles of customer data for marketers to leverage into personalized experience (see 4.).
Why it matters: Ultimately, customer behavior in the virtual realm will help understand and predict their behaviors in the real world.