The year 2015 has been an exciting one in the world of digital marketing. Google algorithm updates have pushed even the late adopters into the world of mobile. An increasing number of companies have begun to recognize the value of content marketing and joined in the creation of 5 exabytes of data every two days. Customers and their preferences have continued to evolve, and thus so do the marketing strategies of brands.
As we prepare to move into the New Year, this is a fantastic time to review marketing developments over the past year and make predictions about what is likely coming down the line in 2016. Here is what we expect over the next year and what marketers can do to start getting prepared now.
1. Content performance becomes the primary focus of marketing
The year 2016 will likely see a shift towards understanding content performance as the key to online marketing. Ninety three percent of companies say that they plan to maintain or increase their investment in content in the coming year. The amount of data now available online is massive. According to IBM, 90 percent of the material available online has been created in the past two years alone. Although there is an incredible amount of content being produced, only an estimated 1 in 5 brands are actually publishing content that the target audience consumes. Until this point, there has been a gap between content production and content performance.
The steep competition means that brands are going to have to look beyond their blind content production and focus on creating content that actually connects with target audiences and accomplishes marketing goals. They will need to use data to analyze customer interests and the types of content people want to see. They will need to use concrete metrics that allow them to see precisely how well their content is helping the brand to meet their marketing objectives and then use this information to make strategy adjustments moving forward.
The amount of content online means that brands now have to fight to stay above the noise and attract the customers they want to see. A focus on content performance will guide brand efforts so that the content created is more efficient and more successful.
2. Companies will start to better map their content to customer journeys, marketers will still struggle with attribution
As a central component of boosting content performance, brands will improve their ability to create and map content to the customer’s journey. It is not enough to just create content based upon topics or keywords. The content needs to have a goal: a specific type of buyer and meeting them at a specific points of the buyer’s journey. When companies are able to map their content to the customer and their journey, they will be able to paint a clearer picture of where their content gaps lie and how well the content is performing. It will allow them to set concrete, measurable goals for each piece of material. At BrightEdge our shorthand for this is: The right content to the right persona at the right time will drive maximum performance.
The holy grail of multi-touch attribution will continue to be of interest to marketers as they get better at developing and presenting portfolios and progressions of content to visitors and customers. One problem continues to be that segmentation of personas creates complexity and fragmentation. Only the biggest companies with millions of users can populate and profitably react to the 15th largest sub-segment. 2016 will not be the year that attribution models become widely understood and used.
3. Search continues to be the largest distribution channel for content
Our research indicates that organic search continues to be the largest driver of traffic to websites as it is singlehandedly responsible for an estimated 51 percent of visitors. This means that search remains critical to the success of websites and search is the primary distribution channel of content. Content that is produced in 2016 will need to continue focusing on optimization to make sure that content is ready to rank well on SERPs.
It is important to keep in mind that obtaining high rankings on SERPs cannot be done through just keywords. Google wants to see quality metrics that take into account the number of visitors and the engagement levels of those visitors. It also wants to see content that receives quality backlinks and social signals as a way of gauging the value that readers see in the material.
Utilizing the search, social, and content trifecta will be a powerful way to promote content in SERPs. When brands produce valuable, quality content and promote it through social media, they help to attract new readers and boost their quality metrics. This will then raise the page’s ranking for search. As the piece rises in search, it naturally gains a wider audience, increasing the number of people likely to post it on social media again. The three points work together to create content that reaches an increasing number of people and helps brands connect with readers. This will be critical in 2016 as brands struggle to be heard over each other.
4. MarTech industry will start to consolidate into stacks
Between 2013 and 2015 the number of acquisitions across the MarTech and Ad Tech specialties have been painting a clear picture of the direction of this industry.
Mergers and acquisitions in the digital media, information and technology space have increased 24 percent in the first half of 2015 vs first half 2014, according to investment bank Coady Diemar Partners. The total number of deals increased to 1,243 in the first half of 2015, up from 1,000 during the same period in 2014. The merger and acquisition (M&A) value in this space decreased 23 per cent to $99bn in the first half of this year compared to the year prior. According to the research and analysis, this is primarily due to a decrease in the number of deals equal to or greater than $1bn. Valuations have peaked.
Qualifying for the marketing stack of the future will require: clear value, integration, ease of use, critical mass in the customer base, and financial performance. Winners will need to continue to innovate at a rapid pace with smaller or no infusions of capital. Once the winners are chosen, the novel among the other 2250 MarTech companies will be acquired.
Foundation Capital General Partner Ashu Garg has predicted that by 2025, marketers will increase their budget for marketing technology from $12 billion to $120 billion. This incredible prediction likely does not seem too far off to those who have been following developments within the industry. Brands have been looking for ways to improve their marketing delivery and their cross-channel marketing capabilities. The old piecemeal way of handling marketing has been quickly passing away, setting the stage for consolidated MarTech capabilities.
This development will be particularly visible in the ad industry. Mobile ad spend is expected to top $100 billion 2016, which will make it the biggest digital ad market. Retargeted messages have become highly effective, particularly as data and marketing are able to come together and create relevant advertising that connects with customers.
Over the next year, metrics are likely to improve as the technology involved becomes even more precise. Consolidations are expected across the MarTech industry as brands begin to view the customer experience as the highest value across all of their departments.
5. Digital video will become even more mobile-oriented as the video marketing segment matures
As digital video heads into 2016, mobile will become even more critical. Mobile transformed from being an important extra to being a necessity for all websites in 2015. Google’s algorithm update now considers a website’s mobile compatibility as a ranking signal, and digital videos will need to stay on top of this development. This is particularly relevant as the YouTube app alone has seen usage rate increases of 34 percent over the year. Interestingly, although many might think that desktops and larger screens are better for watching videos, customers have demonstrated that this is not a priority for them. Customers are 4x as likely to watch videos on a device based upon convenience rather than the viewing experience.
An estimated 80 percent of all Internet traffic is expected to be video by 2019. As the market becomes more competitive, quality will become critical. Brands will want to make sure they invest in creating high-grade videos that meet the expectations of customers. With this investment, brand leaders are also going to want to see measurable ROI from the campaigns. Marketers will have to develop desirable metrics based upon brand goals and dive into measuring video performance.
Marketing automation will also be valuable as a means of helping to connect viewers with the material that will best move them along the buyer’s journey. When customers watch videos, they automatically engage with the brand and the products on a higher level. They are connecting with the people they are watching. As a marketer, you can also see how engaged the viewer is with the content. If they turn it off after a few seconds or if they watch the entire video will offer considerable insight into the level of interest of a particular lead. This can provide information about the quality of a lead and how the brand can pursue conversion.
6. Ad targeting will evolve in the selection of particular demographics while ethics debates also emerge
In 2016 ad targeting will likely see two major developments. The first will be a shift away from targeting people by external characteristics, such as their age. Instead brands will focus more on reaching people based on common values and interests. Brands often find that these are more reliable indicators of what a person is likely to buy.
At the same time, an intense debate will begin to arise about the fine line between using data mining to create precisely targeted ads that customers respond to, and creating ads that are so personalized they can turn customers off to the brand. The technology to create a very accurate picture of the individual is quickly becoming available through social media and the public social graph and the ability to connect behavior across devices. While this is very helpful for marketers, many customers and watch groups have concerns about privacy. This year, given the increased usage of targeted ads and the collision of data and marketing, the debate will likely become even more prevalent. Brands will be pushing the boundaries to see what customers respond to without stepping over the line.
7. SmartWatches will gather steam and followers
Since the Apple Watch was released earlier in 2015, debates about whether this technology will succeed or fail in the long term have become popular. It is likely that in 2016 these gadgets will begin to slowly catch on. Although Apple has not released sales numbers, it has been estimated that they sold around 2.8 million units between April and mid-June of 2015. At least one analyst has predicted that the technology will take a few years to become common and then the industry will grow exponentially.
The SmartWatch is currently struggling to convince people that this is a necessary gadget. Existing versions have several shortcomings. They are often not standalone devices and require phones to work. This means Apple’s version, for example, works with iPhones. This creates a limited market. It also places restrictions on what people can do with them.
The technology, however, is still in its very early stages and several signs point to it improving in the near future. Apple is believed to be putting out a second version of their watch in the spring of 2016. If the rumors are accurate, this watch should be more independent of the phone and come with more unique features. This independence and the creation of native apps for the watch can help drastically enhance its value.
It is relatively widely accepted that if Apple can find a market for the Apple Watch, it will dictate how the rest of the industry will go. Although there are other brands that have been making these watches for several years, Apple will have a powerful influence over the end result. The expected technological improvements for this year speak well to the ability of the watch to begin to capture the attention and interest of consumers.
8. Virtual Reality headsets become more mainstream
Virtuality Reality (VR) headsets will likely become popular in 2016. Estimates predict that 14 million units will be sold this year, with the number growing to reach 38 million by 2020. Jeff Gattis of HTC believes that this year will be critical for the VR industry.
There are several different companies who have announced a VR product line. This includes the hotly anticipated HTC Vine, Oculus Rift, MergeVR and Sony’s Project Morpheus. The initial market for these headsets is expected to be video games, but it will quickly branch out into the rest of the entertainment world.
Since VR units are still in their early stages, prices will likely be high. Some estimates say that higher-end units will cost around $1,500. As the industry becomes more established and common, the price should drop.
The early years of this industry will also likely see the growth of different low-end models that will be significantly cheaper, but also lower quality and will likely fade. The units put forth by the industry leaders like Oculus, HTC and Sony over the next few years will play a major role in setting the bar in terms of quality.
This year has been a wonderful one for marketers. The growth of technology and its ability to help brands better reach customers has been incredible. As 2016 approaches, now is the time for brands to start planning their marketing strategies for the New Year. We believe that this next year is going to be exciting, as new technologies arise and data and content come together. We look forward to seeing what will be in store.
So how do these predictions net out for marketers? Focus on content and customer experience; be ready for Google signals and algo changes; do business with providers that combine innovation and financial strength, plan to understand and get better at video, develop targeting and engagement capability across the new screens of watch and VR glasses.
2016 is going to be another great year in tech, and BrightEdge looks forward to seeing you there.