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We all remember 2008 and the financial fallout that followed. What's interesting is that technically the economy was a full-on bull market come mid-2009, despite business acting like it was still a recession for the next few years. Even when the market had fully recovered, the hangover from this event lasted far longer. The deeper the emotional impact of an event, the longer we account for it in our current reality. Marketers are no different. Today, there are a number of trends that consumers are demonstrating that marketers are ignoring at their own low-ROI peril.
1. We are becoming mobile consumers faster than marketers are adapting
Whether looking at Mary Meeker's annual internet trends report or the fact that 86 percent of mobile screen time is spent in-app, we are not becoming mobile consumers -- we already are mobile consumers. Mobile search has overtaken desktop search by volume. But how many marketers have shifted budgets and their focus so that it's at least a possibility that mobile consumes more budget than desktop?
eMarketer recently pointed out that marketers are wrong to stay hung up on mobile measurement. Just because it's not perfectly measurable doesn't mean it's not the right channel for marketing. How do you measure your outdoor advertising's effectiveness? What about TV? Most major advertisers have done enough research to know that when they run TV, they see a lift in sales. But have you identified how every single program and spot you buy performs? I'd bet not. I'm told CMOs are always on the hot seat and need to measure everything. But instead, are you a CMO spending money in the wrong channels just to be able to better measure the outcomes of an incorrect decision?
2. Inbound customer service is stuck in 1995
How many of you are relieved to find an online chat option so you don't have to actually pick up the phone and call customer service? But you and I are different. We're at our desktops a lot. Go sit in a Chipotle during lunch and watch the people that come in. How many look as though they're in front of a desktop all day? For many, their phone is their computer. Ever tried to chat with customer service through a mobile browser? I wouldn't even try.
Yet look to the top 10 globally installed apps and you'll see every single one is a social or messaging app. We're not just mobile consumers for consuming information; we've completely changed how we communicate with each other to center around our mobile life. Wouldn't it be less painful if you could contact customer service via Kik, Snapchat, WhatsApp, Instagram, Twitter or any other major messaging apps of your choice? (There's a business here -- don't forget the idea guy!) To marketers the messaging space looks fragmented. To consumers with their messaging app of choice, it's highly organized in that tiny app icon.
3. Teens start the trends, but widespread adoption is around the corner
How many times have we heard that a trend is "only for kids" or "not for the broader population"? Social networking, video games, even digital in general was thought to be a young person's medium that didn't reach other demographics. But every time we say this, the other demographics do follow suit. This chart is possibly the most telling of any that try to communicate the media consumption pattern shifts we're about to experience.
While the major players in TV have been forewarned, signs of these changes are all around us and have been present for years. The question is: Are we going to pay attention or keep doing things the same way we always have?
If the way we've treated DVR penetration is any sign, we're in trouble. I worked in traditional media during the rise of the DVR. And what did the industry do? We introduced the Live+3 and Live+7 metric, meaning that if a viewer watched the DVR'd program within three or seven days (depending on the advertiser's contract with the network), full viewership still counted. Yep, even if the ad was likely skipped via DVR, as long as the program itself was viewed within three or seven days, it counted in full. Crazy!
In addition to the chart above, Netflix is in more than 36 percent of households and is ad free. Amazon Prime is a distant second and is ad free. Even Hulu, despite its low reach, is now offering an ad-free option. Marketers simply must change their video-buying behavior because while it's the 18 to 24 crowd for now, they age, and these patterns will clearly become widespread.
4. The decline of the TV industrial complex
This trend is so important and large that it's really more than one trend on its own. No medium garners a greater share of spend or press attention than TV and, as a result, marketers are struggling mightily with how to deal with this new reality. When parents have a child go off to college for the first time, it's natural for them to continue behaving as if the child were still at home, calling their name for dinner or instinctively assuming they'll spend Friday nights monitoring curfew. It takes a while to break this habit, and marketers' relationship with TV is no different.
As annual planning time comes around again, marketers will put a gigantic amount of money into a medium whose viewership is simply not there anymore -- at least not to the level it's being funded. So many marketers look at a media flowchart without flights of 150 TRPs/week as incomplete and unsatisfactory. It's the same as wondering why the door isn't opening at 4 p.m. each weekday as your child, who is now off to college, should be walking through the door. Just like the parents that need to come to terms with the fact that the relationship and schedule they had with their child will never be the same, TV will never be what it was -- all-dominant, must-buy-first, and the heart of every strong media plan.
5. Traditional media outlets: Left out or paying to be included in the "new" news
Your first impression of BuzzFeed may have been similar to mine. "It's that site that has quizzes and lists that people post on Facebook." But BuzzFeed, Vox, and other "new" news outlets are serious business. So serious that Comcast/NBC has invested in both to make sure it has a stake in properties where consumers are parking their eyeballs. But the news world is much larger than Comcast/NBC, and other publishers and content owners will be left out in the cold. Forbes, a decades-old brand, is now only slightly ahead of newcomer Business Insider in global and U.S. rank. As a marketer, it's important to frequently revisit which sites are the best places to reach your audience, regardless of your perceptions about them from years ago.
6. Cash still isn't trackable
With mobile wallets and payments getting significant news attention in the past few years, marketers have quickly jumped with excitement at the opportunity to track ROI from the ad impression all the way through to the payment. Certainly this is exciting, but it's a highly biased data set for now, skewing younger and not yet widely adopted.
While marketers seem to be behind on other trends, they're often ahead -- and too far ahead -- of trends that enable measurement.
Imagine the CMO at a quick-service restaurant chain, convenience store chain or gas station. Mobile payments will eventually be a big deal for you, but right now so much business is done with cash transactions that it's important not to dismiss the cash transactions and their likely link to advertising in an effort to make your media 100 percent measurable. The full picture can be modeled fairly well with enough data, but make sure you're doing the modeling and not just relying on the data you have in-hand!
7. The sharing economy equals the modular agency?
Airbnb and Uber have sparked what many call the sharing economy, the concept being that when an individual can give up part of what s/he owns, or use it to provide a service for others, both benefit. With $26 billion in media up for review over this past summer, it seems marketers are missing out on an important trend that should have shaped the results of these reviews. (Note, this isn't a consumer trend, but it is a trend so important and relevant to the other consumer trends covered here that it bears inclusion.)
While each of these reviews isn't yet final, the majority of us can predict what will happen fairly easily. Large marketers will shift their account from one large holding company to another with the new one promising more transparency and better results. But in the end, little will have really changed. Marketers are still using the pre-sharing economy model of partnering with ad agencies. Marketers may be behind in this cycle, but they won't be forever. This is because smaller and nimbler agencies are recognizing there is something to this sharing economy thing, although it's more appropriately called "modular" for their world.
Let's forget about being a full-service agency for a moment and focus on just being a full-service digital agency. This means bringing expertise in paid, earned and owned social, SEM (multi-channel/platform), web dev, web design, UI/UX, conversion rate optimization, site-side analytics, publisher-direct paid media, programmatic media, RTB, SEO, and a host of others that didn't just hit the top of my head. Not only does the agency need to be an expert in each of these areas, but it needs to be an expert at coordinating and bringing them all together -- a separate and important expertise within itself. Ad Age began exploring this, but I am personally seeing it on the ground. It's real. The smartest agencies are focusing on four things right now: 1) owning the overall strategy, 2) owning the client relationship, 3) finding the very best experts in each discipline, and 4) being nimble to stay ahead of their clients. This trend will change our world.
Closing the gap
Read any behavioral economics book and you quickly see how the brain plays tricks on us. Our view of the world is "right on point" regardless of how far ahead or behind we are. Instead of trusting your gut, check your perspective against the data and those who regularly make good predictions. Use this to close the gap between your assumed reality and actual reality. Your ROI depends on it.
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