US digital advertising revenues reached $58 billion—a 17 percent increase year-over-year—during the first six months of 2019, according to the Interactive Advertising Bureau’s (IAB) “Internet Advertising Revenue Report.” Though the growth makes it the highest spend in history for the first half of the year, digital is beginning to show signs of maturing.
The data shows an uptick in revenues across the board. Internet ad revenues in the US increased seven percent from $28 billion in the first quarter of 2019 to $30 billion in the second quarter. Mobile ad revenues, which make up 70 percent of total internet ad revenues, totaled $40 billion in the second quarter of 2019 compared to $31 billion in the first quarter. Audio adspend is also rising with the emergence of smart speakers, up 30 percent YOY to a total of $1.2 billion for the first half of 2019.
Smartphone ownership and social media is nearing saturation, pushing the industry to focus on new channels for growth such as connected television (CTV), augmented reality (AR) and 5G.
The report notes that marketers must evolve their strategies alongside technological advancements, particularly immersive media. Respondents cite AR ads as having the ability to foster an emotional connection, leading to increased brand recall, positive brand associations and sometimes, increased brand awareness. Connected device usage is also gaining traction, broadening marketers’ opportunity for contextual targeting. However, as marketers foster one-to-one marketing and develop personalized ads, they should remain transparent with consumers about data value exchange.
Advertisers still rely on Nielsen to measure households for linear television but seek a congruent measurement across linear television and digital video. Despite the fragmentation of cross-channel measurement, marketers are investing more in over-the-top (OTT) content and CTV as viewers are shifting their behavior towards CTV.
The report also notes that the California Consumer Privacy Act (CCPA) will stifle innovation and force brands to redirect resources that comply with these privacy regulations.
Report findings are based on a quantitative web survey commissioned by the IAB and conducted by PricewaterhouseCoopers (PwC).
In 2015 through 2017,virtual reality (VR) campaigns were a hot trend that brands were experimenting with, but VR in marketing quickly stalled. A lower than expected adoption rate of VR hardware among consumers is largely thought to have been the culprit. This year, things started looking up for VR in marketing, as the technology has become more convenient and affordable given the introduction of the Oculus Quest headset in May. The big question for marketers to consider is whether VR is now here to stay and if so, how can it be used to drive engagement and reevaluate communication models with the customer.
“What you saw happening with VR is happening with every new technology. The [term] ‘hype cycle’ perfectly illustrates how evolving tech develops over time,” explains Nils Wollny, co-founder and CEO at holoride, an in-car VR experience start-up. “There is usually a big hype around new technology, so everyone is jumping on it, and then this gap of disappointment comes, where everyone says, ‘Ok, the expectations are not fulfilled by this great new technology.’ And then [the tech] reaches the Plateau of Productivity and becomes a part of our general life. This is exactly what happened to VR, but it’s not an unusual development for any new tech. Every new technology has to go through this [process].”
As recent as last year, analysts were skeptical about the VR tech utilization among consumers. In the report, “Virtual And Augmented Reality Users 2019” eMarketer researchers anticipated that this year, only 42.9 million people would use VR and 68.7 million would use AR at least once per month, prediciting that VR would slow down as AR picks up. Another survey from Perkins Coie showed that 41 percent of respondents felt that the most tangible obstacle blocking mass virtual reality adoption was user experience issues, such as uncomfortable hardware or technical glitches.
The VR/AR experts’ predictions for 2019, however, were more optimistic. In January, Ricardo Justus, CEO, Arvore Immersive ExperiencestoldAList his expectations for VR in 2019 were “steady growth of the home-use space, amazing new location-based experiences and new and surprising device announcements.”
Today, brands from diverse sectors are indeed tapping into the technology in more creative ways.
Google recently partnered with the Château de Versailles and now takes VR users on a private tour of the French royal residence. Fashion companies have incorporated VR influencers into their marketing initiatives with Chanel, Prada, Vans and Rihanna’s Fenty Beauty currently leading the pack of established companies that drive brand awareness with VR characters. Balmain even created a whole “Virtual Army” on influencers.
In the world of auto, Porsche debuted virtual reality technology and Land Rover, wowed the crowds with the new Defender VR experience at the Frankfurt Motor Show in September.
Wollny points out that VR marketing has an important place in gaming and entertainment. Earlier this year, DreamWorks collaborated with Walmart to promote How To Train Your Dragon: The Hidden World and allowed the fans to dive into the movie world right at select Walmart parking lots during the promotion of the film. Additionally, Universal Studios partnered with Ford on a campaign that started on October 14 at Universal CityWalk Hollywood, where people were able to jump into a Ford Explorer for a Bride of Frankenstein-inspired experience.
It is quite possible that brands that master VR in the coming years will be the most successful at harnessing the medium’s creative potential. These brands need to remember, though, that while a fully immersive experience that shuts out the physical world makes a great tool to deliver a company’s message, a successful VR marketing campaign, first of all, caters to the customer’s desire for personalization and delivers a truly exceptional experience that consumers can’t find elsewhere.
So, what is the future of VR marketing? According to experts, we’ll soon see the Plateau of Productivity of VR in action, meaning the technology will be more relevant in customers’ daily lives.
“We can already see that with devices, like Oculus Quest, which is an affordable, stand-alone virtual reality device, VR will have greater impact on the daily life of customers in the coming months, bringing new opportunities to marketing. There is also a big opportunity for brands to build stories for interactive experiences that don’t feel like a commercial or campaign but [offer] infinite worlds to build on and provide new experiences. We’ll also see things like product placement but in a smarter way than product placement in a movie, for example, because a product or a brand can be a part of the story people interact with, which feels more natural than simply placing something somewhere and have it captured by a camera,” Wollny said.
Globally, 68 percent of brands have an increased need for data skills when it comes to utilizing marketing technology (martech), according to WARC’s “Martech: 2020 and Beyond” report. Published in association with BDO, the report assesses martech’s growth over the last year, addresses how agencies are balancing data with creativity and where respondents plan to focus budgets next year.
Since 2018, martech investment has seen year-on-year growth of 22 percent with a current estimated market size of $121.5 billion globally. In addition, the combined UK and North American market of martech is now worth $65.9 billion.
According to respondent feedback, a lack of expertise on the brand side is a key driver to outsourcing martech functions to agencies. Whether in terms of upskilling internally or hiring discipline specialists, brands are exploring ways to increase skills. Opinions on which skills should be the focus differ among businesses.
For brands and agencies alike, there’s a need to use data to guide creative strategy, but each side has different priorities. Forty-nine percent of brands cited creativity as one of the most important skills for hiring into the marketing function whereas 21 percent considered strategy and data a top priority. Comparatively, only 25 percent of agency respondents chose creativity as an important factor, ultimately citing data literacy as their top priority.
The majority of respondents have found a use for martech tools in established disciplines. Over three quarters of brands use martech to assist them with email and social media, and nearly two-thirds of brands use martech for analytics, content and CRM. Still, 76 percent of respondents feel the need to add more martech tools to their belt while only 24 percent of global marketers believe they have all the martech tools they need.
In addition, brands are focusing on customer experiences over specific media, resulting in the growth of experience optimization and tracking in the martech industry. Over half of the respondents noted that customer experience optimization is a high priority for their organization. Despite this, less than 50 percent of brands are using martech to track customers between channels.
Half of global respondents agreed that budget constraints are the main barrier to martech investment, up from 36 percent last year. Forty-three percent of marketers globally, however, expect their martech budgets to increase over the next 12 months. On average, North American and UK brands are spending 26 percent of their budgets on martech compared to 23 percent last year.
Report findings are based on an annual survey of more than 750 brands and agencies in North America, UK, Europe and Asia-Pacific.
Nearly half of US consumers feel they have little to no control of their personal data, according to Deloitte’s “US Consumer Data Privacy” study. Marketers are having to perform a balancing act between personalizing offers and experiences based on consumers’ past buying behaviors and preferences while not creeping them out. From 2016 to 2018, the volume of breached records in the US rose twelve-fold, and as a result, about half of all US states are developing data privacy legislation—including the forthcoming California Consumer Privacy Act (CCPA), set to be effective January 1, 2020. Now more than ever, it’s important that marketers focus strategies on building consumer trust.
Collecting data from consumers has served the industry three purposes: to learn more about consumers’ habits, communicate in personal ways and deepen relationships with frequent buyers. Retail executives in Deloitte’s survey state that the top uses of consumer data are efficiencies in operations (53 percent), improving product selection (52 percent) and enhancing in-store services and experiences (49 percent).
Despite how beneficial these efforts are for consumers, consumers still have their doubts as 47 percent admit they have little to no control of their personal data and one in three has been exposed to a data breach. Eighty-six percent believe they should be able to opt-out of the sale of their data.
The good news: 71 percent of consumers are willing to share personal data if they receive special discounts or better pricing. What’s more, 73 percent of consumers said they’re more likely to be open or neutral about sharing personal data when satisfied with privacy policies, compared to 57 percent who are unsatisfied or unaware.
Consumers don’t have a clear sense of what information marketers collect and how they use it. More than two-thirds of consumers think they use the data for target marketing. Fifty-five percent of consumers believe advertisers sell data to outside buyers or share it with third parties.
Retailers still face challenges internally over data storage. Nearly two-thirds of respondents say their organization has more than 50 information systems that store consumer data. Half of them indicate that inadequate data management is hindering their ability to implement consumer privacy programs. Lack of funding was the top reason cited.
For understanding consumers’ view of personal data and privacy, Deloitte surveyed US 2,000 individuals, conducted online using an independent research panel from April-May 2019.
For understanding the executives’ view on the matter, Deloitte surveyed 201 retail industry C-level executives, senior management and senior directors in various retail organizations from US-based companies between April and May 2019.
Social media and online usage may level off or decline over the next three years, according to an international study conducted by The American Marketing Association (AMA) New York—”The Future of Marketing Report, 2019: Techlash is Here.”
Despite the rise of social media usage in China, both Chinese and American consumers have profound concerns about hacking and loss of privacy, what AMA says has led to “techlash.” The study examines marketing trends in the US and China as well as media use evolution, consumer perceptions of forthcoming marketing innovations and data privacy.
Marketers have plans to embrace the future of tech as six in 10 American firms and three-fourths of Chinese marketers surveyed said they’ll increase their use of methods such as employee influencers, ad personalization, micro-influencers, the Internet of Things (IoT), smart speakers, omnichannel marketing, augmented reality (AR) and virtual reality (VR).
The US and China have divided opinions about these new elements. Americans expressed support for methods that can be voluntarily used (VR, omnichannel and artificial intelligence assistants) while 60 percent or more of Chinese favor all the innovations except micro-influencers. Both groups have anxiety over privacy, identity theft, hackers and bots and worry that new technology will detract the human touch from shopping.
Still, both marketers and consumers surveyed expect online marketing and omnichannel commerce to dominate the landscape a decade from now. The other most frequent expectation among consumers in China and the US is that shopping and purchasing will remain a mix of digital and brick-and-mortar.
Despite consumer anxiety surrounding privacy and new ad technologies, the study notes that marketers aren’t taking these concerns seriously enough.
To prevent “techlash from worsening, companies must amplify brand trust and also have a plan to remedy challenges posed by the escalating economic nationalism is China and the US. Responding to consumer concerns also means offering them full transparency regarding their data and emphasizing choice regarding technology while specifying which ones they can choose to use.
The AMA conducted the online survey with over 500 consumers and 500 marketers in the US in January 2019, and in China in March 2019.
Amazon announced updates to its Amazon Attribution console, an advertising tool brands use to attract consumers via Amazon marketplace. The new addition offers advertisers a click-based solution to measure the impact of social media ad campaigns based on consumer discovery and research.
Brands that sell products on Amazon have utilized the Amazon Attribution since it launched in beta last year. The console enables on-demand access to conversion reporting on sales attribution and return on investment (ROI), making it easier than ever to receive and analyze metrics on and ongoing basis. With streamlined access to sales impact analysis, brands can optimize their full digital media portfolio and live campaigns.
The recent social ad measurement update allows marketers to understand shopping impact across search, social, email, display and video media. The in-app tool will give brands insight into how shoppers are buying their products on Amazon.
In addition to enabling social measurement, Amazon is introducing bulk operations for Google Ads, which simplifies the tag generation and implementation process for these ads. Through Amazon Attribution, brands can automatically produce up to 100,000 attribution tags when they upload a single file with campaign information. After generating the tags, brands can download a file that contains all tags, reducing the time necessary to set up Google Ads campaigns.
Amazon Attribution launched with limited availability to vendors in the UK earlier this year, thereby now giving access to both the UK and US.
Prior to the Amazon Attribution update, the company’s advertising platform released a new directory in the US to help marketers discover agencies and tools that offer a range of advertising specialties. The “find-a-partner” directory offers two categories, managed-service providers and tool providers.
Amazon’s behavioral data offerings give direct-to-consumer (DTC) brands even more incentive to shift ad dollars away from Google and Facebook. Despite their revenues growing, the combined share of the duopoly dropped this year, according to eMarketer. Amazon’s US ad business is expected to grow 50 percent this year, with its share of the US digital ad market reaching 8.8 percent.
In a new study, “Amazon Will Disrupt The Advertising Ecosystem,” Forrester predicts that Amazon’s explosive growth in 2018 will cause steeper demands from clients of the duopoly, as reported in Forbes. Forrester also sees consolidation of the ad tech landscape as one result of Amazon’s force.
Smartphone users are multiplying but that may not improve brands’ chances of engaging with their customers given that apps are being deleted at a dizzying rate. Today, the primary reason people delete apps is that companies send excessive and irrelevant notifications, according to a study from Leanplum.
To win the hearts and wallets of consumers, brands must adopt an omnichannel strategy, one that prioritizes convenient and seamless communication with its customers. Yet brands are struggling to find the balance between keeping their users informed and ensuring they don’t over-communicate. More than 75 percent of millennials and more than half of baby boomers and Gen Z delete apps that annoy them with unnecessary notifications.
To counter this, the research indicates that brands must be mindful of the number of notifications they send while also considering the time at which they communicate with customers. About two-thirds of respondents said they have a preference for when they receive notifications, though the findings are split between the morning, afternoon and evening.
The data also shows that users who consistently disregard notifications find that financial and social media brands send the most useful notifications. Among a list of popular brands, respondents considered Facebook, Wells Fargo and Bank of America the best communicators via apps. Over 30 percent of those surveyed said they like to receive notifications for financial alerts and 87 percent said they don’t mind financial app push notifications.
Still, the survey revealed that email is the most-liked communication from brands across generations. Forty-six percent of people said they prefer notifications in the form of email while only 15 percent prefer push notifications. Moreover, 43 percent of millennials want to receive emails from brands compared to 28 percent of Gen Z. As for the type of companies people most likely open emails from, the majority selected messaging companies (54 percent) and financial emails (41 percent). A separate Survey Money study spoke to email’s good reputation among consumers when it revealed that in the past 12 months, 65 percent of people said they used email to communicate with organizations, compared to 60 percent the year prior.
“At Leanplum, we know that everyone has a personal preference on how they’d like brands to engage with them,” said Athena Koutsonikolas, vice president of marketing, Leanplum. “As evidenced by the survey results, there are even specific differences among demographics, including preferences on timing and frequency for email, in-app and push notifications. Brands that ignore these differences will ultimately not be able to engage with and retain their customers.”
Geotargeted ads are helping brands engage and influence consumers with contextually relevant messages. Or are they? It turns out nearly two-thirds of spend on location targeting advertising is inefficient due to poor quality data and mistargeted location impressions, according to a study from Location Sciences.
The success of location-based marketing is dependent on the accuracy and quality of location signals brands use. Yet “The State of Location Advertising” found that 65 percent of spend on location advertising is outside of the targeted area or based on signals of insufficient quality to deliver targeting requirements. For every $100,000 spent on geotargeted ads, $29,000 delivered impressions missed the targeted area and $36,000 “was possibly wasted” as a result of insufficient location signals.
Without high-quality location signals, the performance of targeted ad campaigns is undermined. Mobile IP addresses are generally inaccurate for mobile location, making GPS data the top choice for advertisers in quick-service restaurants (QSR) and retail. While GPS is the most precise form of location data, the study shows that some app developers create fake GPS signals to increase ad revenues, with 36 percent of GPS-enabled apps found to display location fraud.
In order to improve the performance and transparency of location-based digital marketing, advertisers should understand what they’ve purchased and the method used to deploy geotargeted ads. For example, knowing whether the ads are being delivered near the desired location, assessing the quality of the location data being used and determining if the location is actually improving the performance of an ad campaign are factors to keep in mind.
“As with all data, the key to improvement is transparency. Location quality improves significantly with transparency, enabling brands to ensure that the correct quality signals are being used to deliver targeting. Brands can enhance their ability to realize much better performance from location advertising by using the right vendor for them and understanding the data that is being used,” said Jason Smith, chief business officer, US Location Sciences.
The analysis is based on 500 million digital location-targeted impressions delivered in the UK and US between January and June 2019. Data was collected via a tag embedded in digital creative directly from suppliers.
Email marketing platform LiveIntent analyzed ad campaigns from a number of the world’s leading direct-to-consumer (DTC) brands, finding that these brands are experiencing higher click-through and conversion rates on mobile, compared to desktop.
Within the study, LiveIntent was able to determine that the click-through rate (CTR) for DTC brands was three times higher on mobile than on desktop and that the conversion rate for DTC brands was 50 percent higher on mobile devices than on PCs. The iPhone outperformed Android with three times more clicks and conversions.
“We’ve seen enormous growth from DTC brands over the past several years. DTCs are known for being obsessed with driving acquisition, subscriptions and purchases and the data shows that mobile is the best channel to do that. DTCs would be wise to optimize the entire sales funnel for this reality,” Kerel Cooper, SVP global marketing at LiveIntent noted.
The good news for DTC marketers doesn’t end there, as advertising on mobile also helps to reduce ad spend costs. In fact, the study found that cost per conversion (CPC) for DTC brands was 25 percent lower on mobile devices, compared to desktops.
Among other interesting findings, LiveIntent reported that DTC campaigns perform with more efficiency in 2019 versus 2018, as the participating brands are seeing 25 percent more clicks and 35 percent more conversions this year. Also, per LiveIntent, women tend to respond to mobile ads with two times more clicks and conversions, compared to men. And DTCs for shoes and beauty perform the best, while DTCs for alcohol and education perform the worst.
Finally, when it comes to content, according to the researchers, consumer-focused publications showed the most impressive results in terms of content placement. These include newsletters containing shopping tips, travel and general news. Ads placed within these content outlets drove five times higher conversions and clicks for DTC brands.
“DTC audiences are real people, with interests like anyone else. True outreach to them requires real people-based marketing, meaning being able to connect with a known person with consistent messaging irrespective of device, channel and platform. DTC consumers tend to be present and engaged with lifestyle and consumer publications,” Cooper concluded.
Auto Trader, the digital marketplace for used and new cars, debuted the UK’s first contactless car vending machine in London’s Spitalfields Market. The experiment comes after 89 percent of British consumers said price haggling is embarrassing and uncomfortable in a study conducted by the brand. The bespoke car dispenser is meant to raise awareness of Auto Trader’s transparent price offering and help buyers skip the dreaded price negotiation process.
The buy-and-go installation allows purchases up to £21,000 (about $26,000) via a custom-made point of sale system, key release function and integrated payment and door release mechanic. Inside the vending machine to start is a new Renault Zoe, which, according to Auto Trader, is one of the most searched for electric cars in the UK with 463,277 searches in the past month. Auto Trader priced the car at £16,000, a figure that has already been approved by the dealer. The no-strings-attached price tag reflects 68 percent of Brits’ belief that if cars were sold online, pricing would have to be clearer and more consistent, per the brand study. It took six engineers and three months to design and build the car vending machine.
“We’re showcasing a real-life version on what can be found on Auto Trader; brand new cars at transparent pre-haggled prices that you can drive away today. The only difference is that this Renault Zoe can be purchased at the touch of a card, testing London car buyers’ appetite for electric cars as well as a more instant purchasing future,” said an Auto Trader spokesperson.
Auto Trader’s car dispenser experiment follows the brand’s multi-million-pound integrated campaign in June this year that lived across television, radio, broadcast video-on-demand (BVOD) and paid social and display ads through July. The campaign’s 30-second video spot shows a mob of parrots obnoxiously squawking to mimic the conflicting opinions buyers face from friends, family and media when searching for a car. The campaign, called “Silence The Squawk,” was estimated to be seen or heard a total of 541 million times by about 74 percent of the UK’s adult population, according to a press release.
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