What to Expect from Advertising in 2018

advertising-trends-2018

As the year is nearing its end and your Facebook friends start to share yet another heartwarming Christmas commercial, we are doing something entirely different here at StopAd.

If you had a chance to visit our office during the last few weeks, you would have found a large part of our team researching, discussing, and making forecasts regarding the advertising trends that will most certainly take over in 2018.

As of today, the research-discuss-forecast part is over, and we are ready to reveal the list of advertising trends in the upcoming year. With so much happening in adtech these days, we made a decision to include only the biggest trends.

No worries, though. This article includes everything you need to stay in-the-know in 2018.

Ephemeral Content

It was Snapchat that caused the popularity of short-lived content in the first place, but today, nearly 6 years later, ephemeral content is what many other social media platforms rely on.

Believed to be the shortcut to reaching Generation Z and Millennials, ephemeral content is a great tool for striking the FOMO (the fear of missing out). It lives up to 24 hours, a fact that encourages the potential customer to take action before a deal expires.

Importantly, short-lived content works equally well for nearly all niches and industries.

NASA has even found a way to benefit from Insta stories. With an audience of more than 29.2 million (as of December 2017), the aerospace agency entertains and educates people with their behind-the-scenes short videos featuring virtual tours around the space lab. Time Magazine, in its turn, uses stories to announce new articles and encourage people to read them in full by leaving hooks such as ‘X announced Y, swipe up to learn why.’

More than half of commercial accounts on Instagram produce ‘stories’ regularly, and one in five stories result in a private message from potential customers. One in five. This is a remarkable 20% conversion rate. A dream for marketers!

Such an impressive ROI gives us grounds to assume that, while not being cutting-edge, ephemeral content will keep gaining momentum in 2018.

Native Advertising

Native advertising has become a buzzword for a reason.

It is projected that this ad format will drive as much as 74% of all advertising revenue by 2021. Native ads are commonly considered the least annoying form of online advertising, which pretty much explains why an increasing number of marketers build their strategies around native ads.

Will native ads be any different in 2018 from what they are today? Not likely.

What is clear, though, is that they will be especially popular on mobile (it’s been found that in-app native ads are 3X more effective compared to banner ads on mobile).

The tricky part about native ads, however, is twofold.

First, ads are created to fool people right from the start by making them believe that they are clicking on general rather than sponsored content. Second, sometimes native ads placement results in a huge fiasco for publishers (recall the Atlantic and their ‘Church of Scientology’ case). Scandalous and funny at the same time, the ‘Church of Scientology’ case demonstrates the pitfalls of utilizing programmatic for native advertising.

This case, however, does not stop a whopping 47% of marketers from using programmatic native ads for their campaigns.

In general, native ads are gaining popularity—partially because they are usually perceived as less-disturbing compared to aggressive banner ads or pushy pop-ups. Furthermore, thanks to great cases like Airbnb and the New York Times, ad collaboration can be transformed into digital art.

Influencer Marketing

Influencer marketing is here to stay, but with certain updates.

A few marketing fiascos this year (read: Fyre Festival and PewDiePie) made it crystal clear that influencer-brand relationships should be better regulated and controlled. In a response, The Federal Trade Commission took severe measures to stop irresponsible marketing and enforce disclosure of relationships between influencers and brands.

Similar steps were taken by the Advertising Standard Authority in the UK. The British organization issued a code of conduct reminding influencers of the principles they should follow when accepting collaboration offers from brands.

Influencer marketing is growing at ever faster rates and converts at costs that are 77% lower compared to other methods.

A highly effective tool for brands (49% of consumers trust influencers they follow) and a source of income for influencers (those with 500K-1M followers make on average $5,000-10,000 per post), this form of marketing is expected to be in a “growth mindset” during the next year.

So far we can only hope that the regulations put in place this year will improve the credibility and transparency of influencer marketing for the benefit of all—brands, influencers, and potential customers.

IoT-based Advertising

Considered futuristic just a few years ago, the Internet of Things (IoT) has become a reality. Slowly but surely IoT becoming established in advertising by removing screens and making ads more personalized and interactive.

IoT-based ads might not be common yet, but CISCO predicts there will be nearly 50 billion connected devices by 2020, and they will generate up to $1,7 trillion annually.

So far, there are some examples of big brands taking advantage of the technology.

Back in 2015, alcoholic beverage giant Diageo connected its whiskey bottles to smartphones, which allowed the brand to send highly personalized and targeted ads, promotions, and cocktail recipes to consumers.

Another telling example of how to use IoT for advertising is the ‘Magic of Flying‘ campaign from British Airways. A combination of a creative idea and a few tech ‘miracles’ (detecting a precise location of a plane and creating a tripwire triggering billboards to display ads at the right moment) resulted in one of the greatest interactive ads out there.

AR and VR-powered Ads

Before you even ask, the answer is ‘No’.

No, we did not mention these abbreviations for the sake of creating another buzzworthy article. We did this to finally explain the role Augmented and Virtual Reality plays in the ad world and provide you with real examples how these technologies are used for marketing.

What makes VR and AR so attractive for advertisers is clear—and it’s equally clear what stops many brands from making VR and AR ads an inherent part of their marketing strategy.

It all comes down to price.

As of today, it takes north of $500,000 to create a fully interactive VR ad.

Given the price and the amount of cheaper alternatives out there, it’s no wonder most of brands are reluctant to invest in VR- and AR-powered ads.

Some brands, however, are ready to pay the price.

A famous shoe brand TOMS that gained its popularity thanks to a philanthropic ‘buy one, give one’ initiative (the brand sends a pair of shoes to a needy child each time a pair of footwear is sold) has managed to take its idea one step further with VR. The original ‘buy one, give one’ ad of TOMS appealed to emotions of compassion and kindness. With the full immersion experience VR provides, an already effective ad idea turned into a highly effective one, boosting sales for TOMS, and turning it into a hot topic among people of ad tech.
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It is projected that the VR software and hardware market will reach a record $40.4 billion by 2020, and more than 200 million VR headsets will be sold by the same year.

Messengers Are Becoming Ecosystems

According to research by BI Intelligence, messengers have surpassed social networks by global monthly active users, and it’s not just the user base that’s growing.

Customers also spend tremendous amounts of time within social messaging apps. Why? Well, there are two big reasons.

First and foremost, texting has become a preferred method of communication (especially, among millennials).

Less disturbing in nature, texting allows for more flexibility in time of response which means less pressure put on users.

Second, today’s social messaging apps offer more functionality than they did a couple of years ago. Built-in features and chatbots make it possible to compare prices, make purchases, and send payments right within a messaging app, not to mention a boom in communication features, like group chats, video calls, and voice messaging.

Naturally, marketers and brands cannot pass up a hot market like this. That’s why in 2018 we will see more advertising presence in the messenger space.

Facebook Messenger, for instance, is now looking for ways to monetize its huge user base of 1.2 billion. Most likely we’ll see more advertising on the platform in the coming year, along with some new features to compensate for user experience losses.

Apps like WeChat, an Asian giant with over 850 million users, are evolving into whole ecosystems by opening the platform to third-party developers who create a variety of services for the app’s users. From payments to healthcare services, these advanced services increase app usage time and engagement with the opportunity for thousands of brands to use it for marketing.

Chatbots—automated, AI-based services built for messengers—are another technology fueling the love between marketer and messengers. Chatbots are capable of maintaining a conversation with a customer and providing the information they need in real time, which means improved customer experience. Need a telling example? This weather assistant bot in the guise of cartoon cat, Poncho, provides weather forecasts and is completely capable of answering additional questions.

More personal communication between the customers and the brand can either make or break the experience of users.

If a brand’s marketers are careless enough to overuse the channel to simply send promotions, communication between the customer and the brand will become forced or spammy. However, if marketers are smart, they can use the advantage of an instant one-on-one connection to provide customer service and engage customers with storytelling techniques, meaningful content, and personalization.

Programmatic Advertising

Unless you work in advertising or tech, it’s likely that the word ‘programmatic’ won’t ring a bell. But since you’re interested in advertising trends (otherwise, why you’re reading this?), you need to learn the basics.

Programmatic advertising is an algorithm-based, automated method of running targeted ad campaigns, allowing marketers to reach a mass audience with messages and offers.

Today, when digital advertising and marketing is becoming increasingly data-driven, programmatic advertising relies heavily on machine learning to improve targeting, personalization, and relevance of ads by analyzing large chunks of data.

By using machine learning, marketers are able to segment the audience, predict customer behavior, and achieve better campaign results like customer conversion from visitor to buyer.

With machine learning taking care of big data analysis and identifying consumer trends, there is still some room for AI.

According to Chris Victory—VP of partnership at MediaMath, a programmatic tech company—in certain use cases, AI could be invaluable. This includes deeper contextual analysis of web pages, prediction of users’ sentiments and moods, as well as deeper predictive analytics like identifying customer groups with a high chance of churn and adjusting the messaging accordingly in order to prevent it.

According to eMarketer, 78% of display ad spend in the US is transacted programmatically, amounting to approximately $32.5 billion.

Zenith Media predicts programmatic growth at 28% a year in the US with a total ad spend of $64 billion in 2018.

While the perks of programmatic are obvious, there are also some drawbacks associated with this approach.

For instance, many publishers are still focused on selling their ad space in traditional ways. What’s more, programmatic advertising lacks control over placement, which sometimes results in big failures for both brands and publishers.

Online Security and GDPR

If 2017 has taught us anything in terms of online security, it is that lots of companies storing sensitive customer data still lack adequate measures to mitigate data breaches.

Let’s face it. 2017 was a year marked by numerous data breaches impacting millions of consumers—Equifax, Deloitte, Uber, PayPal, you name it.

A typical data breach costs on average $3.62 million each, and there is a 27.4% increase in the average annual number of security breaches.

Although data breaches are essentially a bad thing, there is one positive consequence they have—they encourage better data protection at the governmental level.

In 2018, things are going to take a turn for the better when General Data Protection Regulation (GDPR) enforcement begins in EU. Thanks to GDPR, EU citizens are granted control over their data collection, storage, and processing. Companies are legally bound to inform users about the data they collect, store, and process along with the purpose of its usage. Furthermore, users have the right to object to data processing or request data erasure from the organization.

At the same time, it mandates that rights are to be respected by all organizations located in the EU as well as those that operate in the EU market.

The same rules apply for all companies that process or store personal data of EU citizens.

GDPR is important because it provides a framework that unifies an approach to customer data processing within organizations and provides a set of standards and practices for businesses to act upon.

Not all initiatives are positive, though.

There is a new law passed by the US Congress and signed by President Trump that allows ISPs to sell their customers’ browsing history. This law itself is another example of potential privacy risks that internet users will likely face in the years to come.

Voice Search Gains Momentum

Smart assistants like Siri, Amazon’s Alexa, and Google Assistant used in smartphones or smart speakers for home are booming due to advancements in voice recognition, natural language processing, and AI (yet again!).

Voice recognition has evolved.

Technologies can now perform quite complicated tasks, expanding the scope of their application tremendously. For instance, now they support integration with other devices (fridge or TV) in your home and are turning into voice-enabled smart home controllers like the Amazon Echo powered by Alexa.

By opening Alexa for third-party developers, Amazon has created a platform where any other brand may create apps or “skills” that Alexa can learn. This could be anything like ordering food from a particular food chain or booking a ride from Uber.

According to Marketingland, by the end of 2017, there will be more than 30 million voice assistants for home sold in the US and many more customers using them on their smartphones. The reasons for such popularity are evident: voice control is hands-free; it’s much faster and more convenient.

According to Google, 20% of mobile queries these days are voice searches. At the same time, ComScore predicts that by 2020 voice search will make up 50% of overall search queries.

The tricky part is that voice search queries are generally longer than typed searches and are formulated as full sentences with more details. This tiny peculiarity translates into hours of work for SEO professionals trying to optimize websites for voice search and marketers hoping to identify user intent and context with the highest accuracy possible.

Mobile Dominates the Internet

In 2016, mobile replaced desktop as the main platform for internet access and media consumption.

This trend will continue into 2018 with more marketers allocating budgets for mobile ad campaigns and promotions. Based on the research by Dentsu Aegis Network, in 2018 mobile ad spend will set a new record with $116 billion ad spend globally.

Remarkably, nearly 60% of Google’s global ad revenue is expected to come from mobile in 2018.

It’s worth noting that mobile-optimized online video is going to make a breakthrough as a power medium for advertisers who are set to draw customers’ attention. In part, this is due to strong affinity between social media and mobile device usage patterns.

With most of the time spent on mobile dedicated to scrolling social media, users have become accustomed to consuming video content. Improvement of cellular technologies and the evolution of mobile devices have allowed users to create and share more of their own video content. In fact, according to research by Zenith media measurement company, in 2018 users will spend 36 minutes per day viewing video content on mobile.

An emphasis on video content will require marketers to fight for consumers’ attention and come up with ideas that would be equally appealing to their target customer groups and stand out from the rest.

Social Media Will Need to Keep Pace

The bond between mobile and social media apps is going to get even stronger in 2018 as more of us embrace our smartphones and tablets as our primary devices.

According to new data released by analytics company Flurry, an average US user spends 5 hours a day on mobile devices, which is a 20% increase since 2015. It is remarkable that as much as 92% of all time spent on mobile is “app time” and more than half of this time goes for social media, messaging, and entertainment apps.

Not surprisingly, Facebook dominates the social media landscape with more than 2 billion monthly users, while YouTube and Instagram get the second and the third positions, respectively.

In light of this, it is natural that marketers and brands will put even more emphasis on mobile, predominantly in-app advertising.

The focus will be on building a long-term relationship with customers through personalized and relevant, relatable content. It is projected that video will be the medium of choice for content marketing on social platforms.

Video is expected to make up to 80% of online consumer traffic by 2020.

When preparing their marketing strategies, marketers will have to keep in mind the patterns of content consumption typical for different audiences—Generation Z, Millennials, or the older age groups. For instance, to get into ear of Generation Z users, marketers will first have to get familiar with “communitainment”—the term used to describe online habits of the new generation (usage of video streaming apps, instant messaging, and adoption of VR and AR).

Hopefully, demands and preferences of the youngest users will force marketers to put their best (creative) foot forward and finally ditch the ‘buy, buy, buy’ approach for good.

2017 has been a big year for ad tech with lots of new trends emerging and taking over. It is already obvious that 2018 will bring us ever more to understand, analyze, and adjust to. For now, our fingers are crossed that all that is coming will translate into improved online experience for Internet users across the globe.

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