The technology landscape changed immensely in 2016–especially among the players that influence the digital marketing and advertising environments.
Just a few examples:
- Microsoft threw in the towel on Nokia but acquired LinkedIn for $26 billion.
- Salesforce acquired Demandware for $2.8 billion.
- Samsung reached 1 million monthly active Gear VR headset users, while Facebook assembled a library of more than 200,000 360-degree photos and videos.
- Apple and the U.S. government played out a contemptuous legal battle over data encryption on personal devices.
- Automakers worldwide, from luxury to economy, focused on in-car tech. Apple Carplay and Android Auto gained adoption, while sensor systems became increasingly available for more autonomous driving.
Five key technologies played a hand in this year’s advancements, but the speed of progress for each varied, and not all lived up to expectations. With the familiar traffic light as our analogy, let’s take a deeper look and also consider what 2017 has in store for all of them.
I’ve given each area an objective (but unscientific) status value based on my own observations through the year, defined as follows:
- Red: Little to no progress in 2016 and/or 2017 has major headwinds.
- Yellow: Made reasonable progress in 2016 and/or 2017 looks less clear.
- Green: Made material progress in 2016 and/or prospects look strong for 2017.
From Advertising To Experience
Current landscape: Research suggests that U.S. consumers are exposed to between 3,000 and 5,000 commercial messages daily. Little wonder that marketers, who are investing a lot of money and effort in marketing campaign development, still struggle to break through the noise.
What’s more, 200 million users have implemented ad blockers since April–an increase of several hundred percent since 2010, according to Business Insider. Their popularity continues to rise. Facebook and AdBlock Plus’s very public tussle in August over blocking ads in Facebook’s newsfeed demonstrates the struggle around where to set the boundaries for appropriate monetization.
On top of all that, issues with fraud and transparency continue to challenge marketers’ ability to determine the true success of their campaigns.
How can our industry develop better, more relevant content that encourages real brand relationships rather than just shouting at them?
2017 Takeaways: Digital channels offer creative opportunities that don’t exist in traditional media channels, yet many brands still don’t take full advantage of, for example, the interactivity of smartphones or the opportunity to weave more native and personal marketing messages into relevant content.
Marketers also need to consider consumers’ increasing power and ability to significantly influence brand messaging. Brands can be lionized or skewered in a digital second, and thus need to think about accuracy and sensitivity at new levels when developing content.
But the real takeaway for 2017 is about upleveling the customer journey. Consumers want a trusted relationship, not just a transaction. Creating and curating communities has become a critical part of marketing, and digital channels facilitate that in ways unavailable to previous generations. But brands must also create long-term value; connecting isn’t just about buying a product or service but about the use of, maintenance of, support for, and renewal/replacement of that product/service over time.
As you think about your campaign objectives for 2017, consider where transaction is still the primary objective vs. building long-term, trust-building relationships with target users.
Current landscape: Mixed reality–the combination of virtual reality (VR) and augmented reality (AR)–began the year with a lot of hype, primarily around the great initial sales numbers from the Samsung Gear VR and Oculus VR headsets. In addition, in January, Google claimed it had sold over 5 million Cardboard viewers, and Steam data suggests that as of July, HTC had sold approximately 100,000 mixed reality headsets.
We looked into mixed reality in more depth back in July, and concluded that:
- 360-degree photos and videos will likely be the primary way consumers are introduced to mixed reality for the near future, primarily due to the ease of creation and the relatively small cost of the equipment necessary to produce and consume content.
- More visually compelling VR experiences will appear as we move into 2017, but they will continue to be expensive to produce and will attract a limited audience due to the high cost of headsets.
- AR foreshadows the most compelling use case for mixed reality, but much of the hardware science is still in development, and consumer releases of these devices are still some time away. That said, AR applications have already made their way into some key verticals, including health care, military, and industrials/manufacturing.
The DAQRI Smart Helmet is already being piloted by a number of construction and industrial companies.
2017 Takeaways: Approach mixed reality as progressive adaptation. If you and your clients have the means and interest to experiment with a such a campaign, you could benefit from being an early mover. The more conservative are advised to keep an eye on Holiday 2016 to see how consumers react to new hardware, such as the PlayStation VR headset, and whether any breakout experiences help expand the mixed-reality audience.
Also, be on the lookout for compelling marketing use cases, such as the recent 360-degree film from Mercedes, which featured its 2017 GLS sport vehicle. Then revisit your interest in early 2017.
The NBA has been broadcasting one game a week in VR since late October.
Current landscape: Mobile is now a core part of the fabric of our digital lives. However, many companies still treat mobile device experiences as an extension of the desktop web that preceded tablets and smartphones.
That’s a huge mistake. To be successful, your brand’s mobile presence must be built natively. But keep in mind:
- It now takes an average of $270,000 to design, build, and launch a native mobile app.
- Two-thirds of mobile apps fail to reach 1,000 downloads in their first year.
- 23% of users abandon a mobile app after a single use.
- Apple reported its third consecutive quarterly decline in revenue in October, due, in part, to declining iPhone sales.
In addition to these eye-opening statistics, Gartner is forecasting a slowdown in smartphone and tablet growth as, for the latter, two-in-one devices (such as Microsoft’s Surface) and phablets become more popular.
That said, mobile devices are the core of most peoples’ digital day. According to Nakano Research, there are now more than 2.5 billion (with a “b”) smartphone users worldwide. That includes 81% of U.S. adults, according to Nielsen. And U.S. smartphone usage has more than doubled since 2014.
Google’s newest Pixel smartphones were introduced in October in an effort to redefine the Android smartphone platform.
2017 Takeaways: In spite of market saturation, mobile devices are the primary screens through which most people access the internet and digital experiences. Brands must continue to have a multisurface presence (e.g., desktop, smartphone, tablet) that is native to each device type and fully exploits each device’s unique capabilities, such as pixel density, horizontal/vertical orientation, and touch.
More importantly, continuing innovation in device graph science will enable marketers to more deterministically identify users across devices, which will increase the potential for more effective segmentation, campaigning, and conversion.
Artificial Intelligence/Machine Learning
Current landscape: There’s no question that we’ve set ourselves on a path toward technologies that will alter many of the tasks and activities that require our human brains today. We already live comfortably with AI experiences that include Apple’s Siri, Microsoft’s Cortana, iRobot’s Roomba, adaptive cruise control in our vehicles, and voice-enabled customer services systems.
Whether the next wave of AI further enhances or outright replaces tasks–and possibly ourselves–is still to be determined. But a few data points to consider:
- Almost every major car manufacturer is working on autonomous or self-driving technology.
- An Uber self-driving truck completed the first cargo shipment of 150 miles in October.
- Companies including Google, Facebook, Salesforce, IBM, and Adobe are all investing heavily in technologies that predict, automate, and anticipate business and household activities.
2017 Takeaways: Both creative activities and customer experiences have the potential to be impacted by artificial intelligence and machine learning.
More mundane creative activities might become increasingly automated, enabling faster content development and campaign delivery. At the same time, customer, social, and data graphs could be ingested by AI to provide better customer experiences across digital touch points.
Today, machine learning is mostly applied to programmatic advertising, marketing mix modeling, and segmentation. But the potential horsepower of machine learning may redefine marketing all together over time.
Internet Of Things
Current landscape: If you were at CES in January or Mobile World Congress in February, no doubt you were treated to an avalanche of connected devices. From refrigerators to bicycles to toys, almost every physical product has the potential to be a connected product. And with so many new surfaces appearing in households, marketers have become very interested in partnering with and creating experiences for internet of things (IoT) manufacturers.
In 2016, the adoption of IoT devices varied widely. Devices such as the Nest thermostat and Dropcam (both acquired by Alphabet) seemed to peak. At the same time, we began to see increasing interest around household hubs, such as the Amazon Echo and the upcoming Google Home.
IoT-enabled devices also have found their way into landscape watering, infant monitoring, home security, pet care, elder care, door and window locks, and scores of other uses.
2017 Takeaways: Two questions to consider in the coming months are how do new surfaces represent a potentially new channel to use for your brand portfolio, and can the data generated by all these new sensors and devices be put to use for marketing purposes? There’s huge potential for sensored devices to provide a household graph that rivals any behavioral data collected in the past. Don’t ignore the B2B side of IoT either; the industrial side of IoT is unlocking new community data that will be very valuable for helping governments serve their citizens (e.g., lighting networks, pest detection, city services networks, etc.), and your portfolio of services may need to consider these data channels.
The Samsung Family Hub Refrigerator has a large screen surface that can be connected to a smartphone. How will this change the way CPG companies potentially market to and collect data about their brands and consumer behavior?