by Craig Page-Lee (@cpl_ignite) All in all, 2016 was a tough year, not just for many of the world’s economies but most definitely for some of the world’s leading brands. Take Samsung, for instance, with the exploding batteries in the Samsung Note 7 and, closer to home again, the ongoing debacle around Ford Kugas bursting into flames due to overheating and the dreadful reputation management by Ford South Africa in this regard — again, not just at a dealership level, but at the mother-brand level.
Such incidents have a profound impact on the brands in question and the sad reality is that ‘brands in trouble’ often spells trouble for the media and advertising industry. Incidents as noted above will most definitely have led to major campaigns being pulled and crisis management being the order of the day. Even product variants within the respective organisations mentioned will inevitably feel the pain in the short-to-medium term.
No matter what the pundits say, tell or forecast each preceding year, the reality of the impact on the industry may only be assessed at the end of that particular year, so let’s wait and see what the direct market impact on these particular brands is at the end of 2017.
And what have industry experts from around the world been saying on what to expect in the advertising and media industry in 2017? A collection of thoughts and themes follows:
Digital advertising growth
Starting with digital is obvious, and it goes without saying that 2016 was unquestionably “a year of growth and transformation for digital advertising”, with overall global revenues up 19.1% up on the same period reported in 2015.
Overall growth in global adspend is forecast to slow to anywhere between 3.6% to 4.2% in 2017; it is predicted that digital advertising will grow by 13.6% from 2016 to 2017,, with digital-based ad sales becoming the Top Media category in 2017. The average increase includes all digital formats (desktop, search, mobile, social), with desktop being identified as the only format to experience a substantial negative growth rate (-4.7%).
While accurate figures detailing 2016 growth — specifically for the South African market — are not readily available, it is worth revisiting the digital advertising spend report released by PwC, on behalf of the IAB SA, as a reminder of the rapid growth (36% year-on-year growth) that the industry experienced to year-end 2015. What’s important to highlight here is that “mobile saw the biggest growth at 182%, followed by online at 68% and search at 22%. South African advertisers spent R2.35-billion in 2015 on paid search. Online advertising (display and video) generated R952-million, which equates to 27% of total spend. Excluding search, R181-million was reported as being spent on mobile advertising.”
I doubt that we’ll see such extreme levels of growth again going into 2017 — even if only because economic growth in SA is reflected as flat-lining and we would therefore expect a serious contraction of marketing budgets across all sectors. Digital advertising will nevertheless continue to erode spend in traditional areas, and mobile is probably going to be the big winner again, leveraging off the rapidly increasing migration to demand-side platforms (DSPs) and ad exchange buying.
“The continued strong growth in internet advertising comes at a time when traditional media struggles to hold onto its audience share. Social media, in particular, has filled in that gap by enabling advertisers to reach consumers in new ways.”
— David Silverman, partner, PwC
That said, some important statements have been made regarding the inundation of digital advertising being served to consumers, with the reassurance that “the trend toward fewer, better ads will drive our industry forward by forcing us to deliver more engaging creatives with less disruption to user experience.” I genuinely hope that this is the order of the day in the not too distant future.
Brands that genuinely respect and understand the nature of digital and use it to engage in purposeful conversation and build entrenched relationships with consumers, as opposed to using digital as a spam-filled shotgun approach, will win in the immediate short-term. To this extent, ad-blockers will not be on the minds of consumers who believe their brands of preference are making the engagement and brand conversation more purposeful.
The power of mobile
With the above in mind, the perfect segue is to what is being said around the ubiquitous mobile device.
We all know that people are spending an inordinate amount of time immersed in the mobile devices, which presents a great opportunity for brands to connect with those consumers and for advertisers to leverage off of this platform. What is interesting to note is that adspend on mobile was only at 18% of total digital adspend in the US in 2016. This is forecasted to grow by over 34% in 2017, which should see mobile adspend reach at least 25% of total digital adspend in the US by the end of the year.
Just to contextualise the reality of the statement that “the ubiquitous mobile has become an extension of ourselves”, according to Digital Trends, “on average, Americans spend a whopping 4.7 hours a day on their phones. Whether you’re browsing the web, scrolling through Facebook, or playing a riveting game of Candy Crush, you most likely check your phone about 40 times a day,” reports business2community.
Mobile manufacturers have to constantly improve performance of their devices to keep up with the operating requirements of the more-powerful apps being deployed around the world and, as we know, consumers expect instant interaction and engagement with the websites (delivering rich animation at times), apps and programmes that they run on their devices. A perfect example of this is evident in the way that Google has deployed AMP (Accelerated Mobile Pages), selecting mobile optimised websites over those that aren’t in the search result, or app indexing.
Technology is therefore changing at a rapid rate and, to a large degree, obsolescence is built into the handsets, feeding the concept of disposable consumption in technology.
Coming closer to home again, and with the understanding that there were over 86m mobile connections (mobile connections as a % of population 156%) in SA in 2016, with 92% of the adult population owning a mobile phone, it’s obvious to see why connection to the internet in SA is predominantly via a mobile handset and, in turn, why mobile adspend is going to see substantial growth during the year ahead.
The power of big data
Data enables brands to deliver the relevance that consumers expect, but only if supported by an effective data-analytics capability. Many marketers are still in the wilderness on what to do with the rich data at their disposal and how to use it effectively to deliver positive outcomes and actionable insights, eg, in the form of ‘the right message, at the right time, in the right format’, or ‘how to deliver a consistent experience across the entire consumer journey’.
Data needs to be readily available for marketers and analysts to use in reaching consumers in the right mind-state and shaping brand conversations, but obviously in accordance with the ever-increasing and stringent regulatory controls set in place to protect consumers.
Data protection and e-privacy are also currently under critical review — specifically in Europe — and the parameters guiding how that data can be used may change the game for good, especially if marketers are unsympathetic to those controls and devious in how they monetise the data and on-sell segments of the databases, which inevitably leads to harassment of consumers. This in turn impacts on customer satisfaction and often leads to consumers eliminating those brands from their repertoire for extended periods — sometimes for good.
In short, a simple guide on data usage requires that marketers must
- Clearly state what the customer’s data is being used for
- Destroy that data if it was a “once-off” usage campaign or
- Destroy that data if the customer decided to opt out of our database — this is something that hardly EVER happens
Transparency
My penultimate is probably the hottest topic in the industry at the moment, that of fake news sites.
I believe that some self-regulation is required in this regard and that media agencies need to scrutinise all channels and platforms that they buy media across, especially the many broadcast channels carrying live-news bulletins, to ensure that their clients’ marketing budgets don’t go to supporting the global proliferation of fake news and other falsely hyper-inflated and sensationalised stories. It is up to all in the advertising and related industries to hold up industry integrity and only support channels and platforms that understand the importance of truth and factual delivery of news and other content.
When brands lie to consumers, they are eventually caught out and those brands die. The same must apply to other areas of the industry and it is up to each and every one of us to ensure that this happens, otherwise the predictions and speculations for each year need to take on a new measure, namely that of most untrusted channel delivering endless columns of blatant lies!
The other areas of the industry that will continue to gain much attention, and inevitably experience rapid growth over the year ahead, are as follows:
- Virtual reality (VR): “Many see 2017 as the year VR will become a mainstream technology, but that is far from guaranteed because it is as yet unclear if VR has a widespread appeal. Aside from gaming, which is an obvious application of the technology, the companies developing VR are struggling to show consumers a real use-case which will make a VR headset a must-have device.”
- Augmented reality (AR): “AR however doesn’t have this problem. While the technology has been around for years, with Pokemon Go the whole world saw the possibilities of AR. But there are many other applications of AR beyond just a smartphone game. AR administers a digital layer onto the world around us and in doing so tries to enhance it, rather than replacing it, as is the case with VR. This means that many everyday tasks could be made better using augmented reality technology.”
- Digital ecosystems: “For leading organizations, digital ecosystem adoption seems to offer enhanced market (or citizen) access, and thus is a medium for more rapid innovation and greater productivity growth.” A key objective for brands is “to keep audiences in your own ecosystem to maximize your relationship with the consumer”. Serving consumers real-time relevant content reduces the need, or desire for consumer to investigate outside of the ecosystem.
- Geo-targeting: “This is an important part of marketing and one you can’t afford to ignore. As the web becomes more saturated than ever with information, tailoring your ad campaigns with geotargeting provides a light in the dark for your potential clients and customers. It can guide them straight to you and your business” “Geo-targeting is becoming more of a necessity as more of the world goes mobile and digital. Marketing is getting very localized, and promotions targeted at a specific location seems to be getting far greater results than promoting to a broad audience.”
In closing, we need to ensure that SA agencies and clients alike embrace the reality of entrenching diversity across the industry and enabling emerging black talent to become genuine owners of the future of the industry. This is a prediction that we all need to support and monitor on the journey ahead.
Craig Page-Lee (@cpl_ignite) is the former group managing director of Posterscope South Africa and is now an independent consultant servicing the broader brand, marketing and communications industry. His monthly column on MarkLives, “Beyond Borders”, focuses upon doing business in various African markets. Craig is always available for a coffee catch-up and chat (email craig at d-cifr dot com).
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Herman Manson (@marklives) is the founder and editor of MarkLives.com.
