Digital Future: Predictive Advertising, Chapter 1 - Five Strategic Trends That Are Changing Digital Forever

November 16, 2016 Andrew Park

Welcome to Chapter 1 in our upcoming eBook, Digital Future: Predictive Advertising, which will provide broad strategic insights, executive interviews and key research for CMOs, VPs and other marketing leaders seeking to gain a competitive edge through marketing technology.

The Future of Predictive Advertising - Strategic Trends that Are Changing Digital Forever

The role of marketing has evolved more in the last 10 years than it has in the last 100. Thanks to the proliferation of the largest digital channel by ad spend - pay-per-click (PPC) advertising - as well as programmatic advertising and data-driven targeting, marketing teams are finding new and creative ways to reach audiences with the right balance of precision and scale.

Consumer adoption of technology is changing so fast, and new technologies and platforms to reach consumers are emerging so quickly, that keeping up is proving to be a separate challenge in itself. This is why it’s important to keep up with strategic trends like the ones we’ll cover here. The chief marketing officer is now also the chief marketing technologist, strategist, and analyst. According to research from Ernst & Young, marketers now spend approximately 15% to 20% of their budgets on technology. This dynamic is creating a “two-headed beast” scenario in which short-term investments in tools can end up at odds with long-term organizational goals.

"CMOs now spend approximately 15% to 20% of their budget on technology." - Ernst & Young, "Marketing's Two-Headed Beast," November 2013

You’ve probably struggled with this two-headed beast yourself. In some cases, you have the opportunity to choose your tools. In other cases, you inherit them. Eventually, one tool becomes many tools – and you need to integrate everything. When marketing efforts pay off and companies get bigger, your tools need to become more closely integrated. But software doesn’t get better with age. Over time, it atrophies. It starts to require some major changes. This is especially true in digital advertising - particularly in search engine marketing, which has changed drastically during the past decade with the massive expansion of different types of customer data available (such as demographics, location, time and devices like mobile).

Imagine where your marketing team is going to be in a few quarters or years. The pain points you’re feeling now in building your marketing technology stack are going to become stronger. So, the key to navigating these challenges is to understand where the future of marketing is headed. Here are five strategic trends that provide key insights on what lies ahead. 
 

  • Trend 1: An omni-channel strategy is a true competitive advantage.
    According to a 2015 survey by Kahuna, only 10% of marketers reported having the tools necessary to deliver a personalized marketing experience that reaches prospects regardless of whichever channels they use. While all surveyed marketers ranked having an omni-channel strategy as a top priority, only 6% reported being able to provide one.

    Takeaway: Among marketers, there’s a huge gap between expectations for personalization and targeting...and reality. While personalization and omni-channel targeting have been on every marketing executive’s to-do lists years, many companies still struggle to execute on their big ideas. If you’re in marketing, you know why - doing omni-channel right is no small task. Every individual marketing channel is its own constantly-changing ecosystem with its own rules of engagement! (But there are strategic ways to approach even this challenge that can be informed by your existing digital advertising plans, as we’ll cover shortly.)

    The Future of Predictive Advertising - Which Devices Are You Covering?Is your marketing stack covering all the channels, and devices, it needs to?

    Fortunately, the good news is that the playing field is still more or less level. There remain plenty of opportunities for organizations to emerge as personalization frontrunners. Because the line between leader and laggard in today’s marketing ecosystem is still very thin, there’s plenty of upside on the horizon for your team, particularly if it’s focusing on building omni-channel now. Take a cue from digital advertisers who are already tackling the challenge of cross-device tracking - savvy search-based marketers are already making use of multi-channel consumer behavior patterns by running cross-device campaigns that involve desktop, tablet and mobile. According to Statista, nearly 30% of all US e-commerce transactions in 2016 are projected to be mobile; by 2020, that figure is estimated to be close to 50%. Considering retail as a specific example, Business Insider reports huge performance gains for cross-device campaigns (spanning desktop, mobile and tablet), which have been observed to be 60% more effective than than desktop-only campaigns for driving in-store conversions, and 24% more effective for driving in-store visits.
     
  • Trend 2: Consumers are in charge. Intent is king.
    Ad blocking is on the rise globally. In one study of UK internet users, eMarketer found that by 2017, 27% (14.7 million people) will stop digital ads on at least one of their devices.

    Takeaway: The rise in ad blocking means that targeting for relevance may not just be a “nice-to-have” anymore. It's an absolute must. Today’s digital audiences feel bombarded by irrelevant marketing campaigns. Ad blocking tech gives them the power that they need to fight obtrusive, distracting messages.

    What’s the best way for advertisers to respond to this behavioral shift online? The key is to treat your marketing campaigns like a two-way dialogue with your audiences. Spend time listening and learning as you optimize your customer journey. Deliver value with every touchpoint and experience. This is how your digital advertising channels - particularly search marketing - can provide insights that can inform the rest of your marketing stack. Search is a channel powered entirely by user intent - it takes place only when prospects are interested in researching new products or services, usually with the eventual intent to purchase. Search staples, such as keyword analysis, copywriting and image-based product listings, can be used to inform messaging in other channels, such as social and display.
     
  • Trend 3: Advertising efficiency is the new ROI.
    Waste in advertising is rampant. A 2014 Google study suggests than 56% of all impressions are not “seen,” meaning they are not in view onscreen for a minimum of one second. 

    Takeaway: Digital advertising may be more efficient than traditional, “old media” marketing, but we haven’t yet arrived at a perfect system in which every marketer’s message get clearly surfaced to relevant prospects, front-and-center. This highlights the importance of ensuring your messages appear first...but it also indicates that, in cases where they don’t, your marketing budget is in danger of being frittered away on ad placements that never see the light of day. This is where efficiency comes into play.

    Remember that there are two sides to ROI: revenue and cost. Be sure to choose tools and technologies that help you maximize the one and minimize the other. This is also where smart, powerful automation can make a real difference. There will, of course, never be a software-based substitute for a savvy, strategic mind that astutely ties together a fragmented marketing landscape, but there is absolutely greater call for robust software automation that can help marketers launch and maintain new channels at scale.

    The Future of Predictive Advertising - Eliminating Waste is the New ROIWaste is one of the biggest challenges in scaling - are you running an efficient marketing stack?
     
  • Trend 4: Experience depth is the new coverage breadth in marketing.
    According to IBM, deeper, richer customer experiences are a top priority for nearly two-thirds of 5,000 marketing leaders surveyed. The report also found that leading CMOs are 26% more likely to focus on customer journey mapping and 31% more likely than laggard counterparts to integrate marketing, sales and customer support. 

    Takeaway: As IBM puts it, “today’s CMO is responsible for selling experiences, not just products.” Deeper, richer customer experiences are a must for marketers across the board. Advertising isn’t just about buying up volume and hoping for clicks anymore: marketers and campaign planners need to focus on guiding digital audiences towards an end-point. Online experiences need to be interconnected across devices and platforms. The back-end of your marketing technology stack needs to reflect this front-end picture.

    Consider the case of search engine results pages (SERP) for product searches on the world’s largest search engine, Google. While the search engine previously surfaced text-based “right rail” ads, it has now more or less completely scrapped them in favor of Product Listing Ads (PLAs) - eye-catching image-based listings of retail products that the search giant has implemented because the richer, more-visual experience drives more transactions and helps close the gap between intent-based search and actually converting prospects to paying customers.
     
  • Trend 5: Social media strategies need revisiting.
    Various surveys from The CMO Survey suggest that even though social media spending levels have witnessed a 234% increase over the past 7 years, 44.1.% of respondents aren’t able to show the impact of their social spending. Only 4.6% say social media contributes very highly to company performance.

    Takeaway: The problem with social media isn’t that there’s no ROI whatsoever. No, the problem is that that word-of-mouth is notoriously tough to measure and monitor. That’s why marketers should expect to see campaigns becoming more channel-agnostic in their approach. As CMOs aim to connect dots between their investments more clearly, paid advertising will become more integrated to the rest of your business. The intersection of social media and advertising will begin to take new forms. We particularly recommend paying attention to opportunities for social to take direct insight from intent-based marketing channels as prospects continue to cross channels throughout their increasingly nebulous buying journeys.

Final Thoughts
Stop us if you’ve heard this before - the world of advertising is in a constant state of change. Hopefully, the above trends have helped orient you on the future of advertising, and of the importance of choosing the right technology mix for your organization. Even in the absence of a clear picture of what the future will look like, it’s important to get a sense of where things are headed. We hope you enjoyed Chapter 1 of our blog series - please stay tuned for Chapter 2.

About the Author

Andrew Park

Andrew Park is a content marketing manager at QuanticMind. A UC Berkeley graduate and lifelong Bay Area resident, Andrew has done tours of duty in editorial, PR and marketing, and now works with the QuanticMind team to communicate the importance of data science and machine learning in digital advertising.

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