Sounding Off – Martín Kogan-Headway Digital: 8 Key Trends for 2016
Martin Kogan, CEO & Co-Founder at Headway Digital , provides Portada the 8 key trends for 2016 in the Latin American digital market.By 2016, users are expected to spend 3.15 hours on average using apps and the number of users with smartphones is expected to rise to 2 billion.
"Although the most significant part of year – the Holiday Shopping Season – has yet to arrive, it’s not too soon to safely say that for digital marketers, 2015 has been a great year. We’ve seen programmatic go mainstream and viewability improve. Numerous brands have taken control over their first-party data, and are putting it to good use in reaching their exact audiences at scale. And large swaths of the industry have and finally figured out how to reach consumers effectively on their mobile devices," said Kogan.
Programmatic buying represented 35% of the total advertising display in 2014, and it will command 61% of display spend in 2018.
So what’s in store for 2016? Here are eight trends we’re putting our money on:
- Brands will focus on promoting their mobile apps. You’ve read the stats: m-commerce will top $252 million US by 2020 (Forrester Research), and in 2016, consumers will spend three-plus hours a day using mobile apps (eMarketer). More importantly, consumers who download apps are willingly giving up valuable screen real estate to a favored brand, and to many experts, downloading an app is a reliable proxy to brand loyalty. It can be no surprise that brands will focus on driving app downloads in 2016, and will spend time, energy and resources to increase their profile and ranking within the app stores. Of course, managing SDKs to support advertising opportunities will be challenging, and we can expect to see the mobile providers invest in ways to streamline that process in order to alleviate the burden of resubmitting apps to app stores each time an advertising unit within an app is updated.
- Social media will lead the visual web. Thanks to visually oriented social media sites (e.g. Periscope, Snapchat, Instagram and Pinterest) marketers will have more options to reach and engage consumers via social media channels. More importantly, they’ll shy away from slick professional shoots and stock photography which no longer resonate with consumers, and rely on consumer-generated content created by brand enthusiasts and brand ambassadors to tell and promote their brand story. Pinterest is now one of the biggest conversion sites – a fact that’s not lost on savvy marketers.
- A hybrid approach to connected IDs will arrive. Advertisers have long wanted to track users across their myriad devices and in 2016, they just may get their wish. While marketing-tech providers have spend the past few years debating the merits of a probabilistic versus a deterministic approach, the industry will coalesce against such demarcations and opt for more of a hybrid solution. For those who missed it, connected IDs (aka universal IDs), link the device identifiers to individual users so that marketers can do cross-device tracking and targeting. Deterministic methodologies use known attributes to associate multiple devices to a specific consumer (e.g. a user who logs into theNew York Times via a laptop, tablet and smartphone. While accurate, it’s difficult to attain massive scale. Probabilistic methodologies solve the scale problem by using advanced algorithms to link devices make educated guesses and then link it to the Connected ID. As brands bring data management in-house, most will use a hybrid approach, incorporating their first- and third-party data to the effort.
- Vast improvements in data accuracy. As mentioned above, numerous brands are opting to manage some or all of their data directly via data management platforms (DMPs). Internal first-party data will be leveraged to increase accuracy and build lookalike models for targeting purposes, while third-party data will allow them to target the right audiences at scale.
- Native video becomes top choice for marketers. The visual web is rapidly changing the way we consume content, and video is on the forefront of that trend (as evidenced by the 5.5 hours a day we spend watching it). Native video – which seeks to enhance the consumer’s experience by complementing the content and design of a website – is poised to become the most desired video format. But it’s not enough to simply purchase native video ad units; marketers should employ the industry-tested best practices for engaging consumers via video. For instance, attention span is short, so get your message across within the first three seconds. And forget about auto-sound, which annoys users (and besides, many opt to mute their devices as they scroll).
- Micro moments and customization. Although old news, micro moments are still highly relevant for marketers, and their importance demands real-time personalization in mobile advertising. Mobile devices allow consumers to act on any impulse, and when we do, we demand relevance. In fact, our preferences going forward are highly influenced by our experiences in these micro moments. The same technology that will power cross-device ID will allow marketers to track consumer preferences, and respond with relevant messages during the critical micro moments. The result? One step closer to 1-to-1 marketing.
- Programmatic mainstreaming. Programmatic advertising has continued its upward trajectory through 2015, and is certain to do so in 2016. That trajectory is the result of many factors, including the new formats (e.g. rich media), buying models (programmatic direct) and inventory sources (native, mobile, video, social media). Tech providers have focused significant resources in automating direct deals, and publishers are comfortable offering their most premium inventory via programmatic channels. As a result, programmatic spending will leap from US$9.33 billion in 2015 to US$14.89 in 2016.
- Latin America will continue to boom. Latin America is one of the most thriving regions for advertising investment, and will continue to be so for the foreseeable future. Case in point: 2015 saw significant growth in smartphone penetration, and by 2019, some 57% of consumers will own one. Moreover, 95% of all Internet users are active on at least one social media site. And by 2018, programmatic marketing will account for 61% of total display ad spend. For marketers seeking new markets, audiences and opportunities, LatAm is an attractive option.