nmp: 4 projections for 2016

It’s incredible to think that the year 2015 is coming to its conclusion.  The past twelve months have flown past, with developments that are likely to dictate the direction of the advertising industry for the next several years, from the rise of ad blockers to the rebirth of paid social as a platform that offers advertisers a new channel for acquisition.

2015 was, of course, also the year when Doc Brown and Marty McFly arrived in the future bringing with them a raft of predictions about what this year would look like.  From hover boards to self-tying shoes, the prophecies made by the film have been assessed, analysed and in some cases ridiculed, but hopefully my predictions for next year are slightly better informed…

1.      Data becomes an even more important part of advertisers’ strategy – although the effective recording and application of data has been one of the hot topics in the world of digital marketing for several years we are still very much in our infancy with regards to our understanding of how powerful large sets of data can be with regards to our advertising campaigns.

The general lack of understanding around visitor identity and intent are key obstacles that digital publishers must overcome in order to satisfy the demands of the advertising industry.  2015 has seen large publishers tighten their grip on advertising expenditure as their scale has allowed them to provide greater audience targeting and insight, the battle for smaller publishers is how they differentiate their product from the big players without access to such scale.

2.    Social channels expand their role in acquisition – The issue that social channels have always faced is that their incredible engagement metrics do not match the acquisition targets set by clients. Social channels, of course, will never be able to match the intent of paid or organic search but their ability to access rich customer data should mean they play a crucial role in any prospecting strategy.

2015 has already seen Facebook and Twitter enhance their advertising suites and ad formats to provide better solutions for advertisers looking for direct response, and in 2016 it looks like these developments will continue at an accelerated pace with Facebook and Twitter already trialing “Buy Now” buttons in the US and Pinterest announcing the commercialisation of their own platform.

3.    Display advertisers will be forced to react to ad blockers and challenges regarding viewability – unquestionably, the biggest challenges facing display advertisers at the moment are the rising use of ad blockers and ensuring ads served are viewable. My expectation is that these challenges will force display advertisers to react in one of three ways:

  • The first is to increase ad formats that get around ad blocking software, the likelihood is that these ad formats will feel more native than the current set of creative options becoming integrated with the user experience rather than standing aside from it.
  • The second is that advertisers will be forced to reassess their set of success measures. Metrics that demonstrate engagement, such as interaction rates, will be crucial to proving performance.
  • Thirdly, as advertisers start to gain a clearer understanding of viewability there will be a greater emphasis placed on premium inventory. This emphasis is likely to cause a migration from the open exchange to a combination of open exchange and private marketplaces with the knock on effect being inflated CPMs for inventory deemed to be highly effective.

4.   Paid search advertisers turn to 3rd party data to pre-qualify audiences – as the auctions for top performing keywords continue to intensify, it will become increasingly important for advertisers to pre-qualify their target audiences before committing to higher CPC levels.

For many years the main levers available to paid search advertisers when segmenting audiences were a user’s geography and the time at which they made their search.  More recently Google has expanded audience options to allow for basic demographic targeting and the overlaying of first-party data through remarketing lists for search ads (RLSAs).

In 2016 I expect that the audience segmentation options within AdWords will progress once again with Google recently launching “Customer Match” on Gmail and the GDN, allowing advertisers to target look-a-likes of email addresses that they have recorded, and trialing targeting based on likely household income in the US.  These more advanced ways of segmenting audiences could have a significant impact on the way paid search advertisers run their activity.  For example, by pre-qualifying audiences it could allow advertisers the opportunity to explore broader keywords that were not deemed profitable previously.

So there’s my predictions for next year, whatever happens 2016 is shaping up to be another interesting year in digital advertising.  It would be remiss of me not to mention that Back to the Future did in fact get some of their predictions right, so hopefully my prognosis is more in line with the video calls, tablet computers and wearable tech forecast by the film than the bizarre double ties or endless fax machines.