6 Marketing Trends of 2018 as Seen by Portada
What: A recap of the most important trends in the marketing industry in 2018 as seen through the eyes of Portada. What went right? What did we learn?
Why it matters: With one foot in the next year, it's time to evaluate the paths we took in 2018, and see what knowledge and best practices can help us ride the trends in 2019.
Back in 2017, we were thinking about how to prepare for the new trends the new year would bring us. Last December, experts in marketing made their predictions public, and we started the new year with our hopes high, ready to face the future. Marketing leaders had to deal with disruption and emerging technologies that promised to mature beyond their initial hype. As the year unfolded, we saw those predictions become true, and marketers have dealt in different ways with the new opportunities each trend brings.
In this recapitulatory article, we take a look at some of the paths marketing took us in 2018. So far, one thing is certain: the more we evolve, the more we learn. It is time to take a glance over our shoulder and be ready to welcome 2019 with the best possible tools.
1. Artificial Intelligence
We've been hearing for a while about how AI is getting more sophisticated, and the brands that have already adopted AI-powered solutions have found it to increase user engagement. However, "Integrating AI with a site's chat box or Facebook messenger will require perhaps even more creativity and understanding of the brand's target market, " predicted in February Amanda Hinski, CMO at YMCA, for Forbes. "AI still has to address customer needs and problems just as aptly as a human agent, and it helps if the AI experience delights customers in a fun and lighthearted manner."
In 2018, the ways intelligent machines can help marketers and advertisers multiplied. Through AI technology companies, several brands are already using smart systems and devices for things such as accurate customer segmentation and improved customer interactions. "We can't even imagine where technology will be taking us," said to us earlier this year Bruno Lambertini, CEO at Circus Marketing. "Data combined with AI and Robotics, with a boost from 5G connectivity, is an explosive combo that opens a thousand opportunities in the world of marketing and communications."
We can't even imagine where technology will be taking us.
AI helps numerous brands to enhance their marketing. Actually, most of us interact with AI every day and marketers are increasingly betting on it. Entertainment platforms such as Netflix and Spotify use AI to provide unique, personalized recommendations to its consumers; in fact, about 80% of the content viewed on Netflix is chosen through the algorithm recommendations. Another brand that has pioneered in the use of AI and AR is Sephora, with its virtual assistant that gives makeup recommendations to its users. BMW, Campbell's, Hilton, Dior, Lowe's, Nordstrom, Skype, Levi's, Taco Bell, Apple, Under Armour... Chatbots are everywhere; according to an infographic by 16 Best, they will power 85% of sales interactions by 2020.
Recently, Samsung announced it will invest US $22 billion in AI, 5G, and AutoTch, and just last week, Honda launched its new virtual sales-assistant on Facebook Messenger. If these examples weren't enough, let's remember how in November Lexus launched the first ever ad commercial written by an AI machine.
Jivox, a marketing technology company, recently announced the launch of two new AI capabilities that offer brands a first-ever fully personalized customer experience across all paid and owned digital channels—including social media, native, display, video, and mobile advertising, the brand's email and website. We've been interacting with AI for some time, but as most marketers know, we are just starting to discover how much it can really do. And in spite of how we could be afraid of machines, the truth is they help us do better marketing. In the words of Rishad Tobaccowala, Chief Growth Officer at Publicis Groupe, "Because of AI, certain things that machines can do better will be done by machines, but people plus machines have been found to be better than machines in most cases. The human touch is the difference."
2. Multicultural Marketing
After marketing crises such as Pepsi and Kendall Jenner's failed ad last year, voices all over had a lot to say about diversity and the correct way to address multicultural audiences. As obvious as it may sound, not every brand knows that ethnic groups should be talked to in ways tailored according to their cultural nuances, so we reached throughout the year to several experts in multicultural marketing in order to find out what is obvious and what is not.
The first thing they all agreed on was that, since the US population is increasingly multicultural, everyone should be doing multicultural marketing. "Looking at the US population current data, as well as the projections, I’d be hard-pressed to believe there are many businesses that wouldn’t benefit from multicultural marketing," observed Marissa Fernandez, Marketing VP at the NFL, a couple of months ago.
"Multicultural marketing is no longer an afterthought or checked box; it has become a key strategy for business growth," explained along these lines John Sandoval, Senior Brand and Latino Marketing Manager at Intuit. "It’s time for brands to acknowledge this diversity as well. As long as you have customers purchasing your products, you should be considering multicultural marketing."
You have to know you’re being scrutinized or evaluated as to whether you make sense to that person… specifically, they would ask themselves, 'Do you make sense to spend my heart and money against?
However, it's not that easy, as some businesses limit themselves to translating a general market campaign into another language, or having an influencer that doesn't really fit talking about a product. In order for multicultural marketing to work, not only do you need to know who you're targeting, but you also need to make sure the connection is real. In the words of Albert Thompson, Digital Strategist at Walton Isaacson, "Consumers are very smart, they can look at a brand and they can tell immediately if it’s for them or not. They may not know if it’s exactly the best for them, but they do know when it is not for them. You have to know you’re being scrutinized or evaluated as to whether you make sense to that person… specifically, they would ask themselves, 'Do you make sense to spend my heart and money against?"
As the diversity of the consumer market keeps increasing, more and more brands realize that establishing real connections with multicultural consumers is no longer an option, but a must. Everyone has seen the numbers: minority buying power in the U.S. is growing more quickly than the white consumer market, to the extent that the white population in America will constitute only 44% of the total population by 2060, according to the U.S. Census Bureau. 29% will be Hispanics.
On September 25, members of the Agency Star Committee got together in a panel to discuss how multicultural insights make general market initiatives more effective. Their answer is simple: "The buyer out there is multicultural, there's no way around it," declared David Queamante,SVP, Client Business Partner, UM Worldwide. "If you're going to focus on the non-ethnic half of the population, you're going to miss the mark, period. If you're not incorporating a multicultural media mix, you're trying to move the needle but you're only pushing on half of the audience."
3. Direct-to-Consumer Brands
Another important trend that grew in 2018 was direct-to-consumer brands, which have pretty much exploded in the last years. Big companies like P&G aren't growing so much as they used to because of these brands that don't need any intermediaries to reach the consumers. This helps the interaction and engagement a great deal, since consumers feel like the brand actually listens to them.
A survey by Diffusion and YouGov has revealed that 81% of US internet users said they would buy at least one item from a D2C brand in the next five years. More specifically, 36% said they would make 1% to 19% of their purchases from D2C brands in the next five years. Convenience was the leading motivator; 27% perceived buying D2C brands as easier than going to a traditional store.
DTC brands are so attractive and successful that Unilever purchased the Dollar Shaving Club, a brand that allowed male consumers to receive economical, stylish razors at home without having to pay for a pricey Gillette razor. After Gillette's market share fell from 70% to 54% from 2016 to 2017, it decided to launch its own on-demand, direct-to-consumer products. Another example is Covergirl, another brand that has decided to face its DTC competitors full on. After 57 years of selling through retailers, there is now a 10,000 square-feet "makeup playground" equipped with a host of state-of-the-art technology where consumers can test and try products, no intermediaries involved.
4. Voice Search
Voice-based devices are another technology that has been evolving in the last years. According to Mark Browne, MarTech editor at Portada, Voice search increased by 35-fold between 2008 and 2016, but brands don’t have to re-invent the wheel to make sure they’re on top of consumers’ search results.
- The smart speaker market spend is ballooning. It will grow from $4.3 billion last year to $23.3 billion in 2025, according to Allied Market Research.
- Amazon’s Alexa led in revenues in 2017 but Apple’s Siri is expected to grow the fastest. More will be spent in North America on smart speakers than anywhere else in the world.
- The biggest adopters of smart speaker technology are affluent educated millenials as well as young gen X and children, according to Global Market Insights.
- More than 40-percent of adults “used voice search on a daily basis in 2016,” Forbes Magazine reports, noting that comScore predicts that “50 percent of searches will be voice-based by 2020.”
- Most voice searches according to Forbes are also local, putting an emphasis on the ability of the search engine used to deliver up local results.
Even though the natural next step is voice search, there has been little direct advertising through voice assistants so far. When users make a voice search, smart speakers usually present only the first organic result. Smartphones may present more results, but still not as many as a manual search. Therefore, brands need to concentrate on SEO to identify the real keywords in order to produce content that puts them among organic results.
5. Influencer Marketing
During the last years, the trend of using influencers as a tool to amplify a campaign or message has grown to a great extent. As Vivian Baron, Founder and Creative Chairwoman of Band of Insiders explained at the Band of Insiders Breakfast at Portada Mexico, "It is no longer about the relationship with the media, but rather about how we amplify our client's message correctly. There's great interest placed on influencer marketing, but there's also a great lack of knowledge around it."
In spite of this lack of knowledge, many brands have tried to take advantage of the opportunity that influencer marketing represents. Unfortunately, not everyone has succeeded. "Digital platforms are so strong today that influencer marketing can have a hugely negative effect," asserted Baron. "It should be taken very seriously."
However, it's very easy to get influencer marketing wrong. After surveying more than 4,000 European respondents about influencer marketing, a report by Bazaarvoice shows that consumers are tired of the repetitive nature of the content and decreasing quality of posts. According to the study, 63% of online audiences feel that influencer content has become “too materialistic” and “misrepresenting real life,” and 49% of consumers believe there's a need for effective regulation to define stricter rules as well as best practices for content.
"When used superficially, the influencer marketing tool can lead to crises as the ones we've seen recently," commented Vivian Baron. "Sometimes there's a great potential but it doesn't hold up. It's very important to design a long-term strategy that allows you to create a critical mass of loyal followers in an industry where loyalty is virtually non-existent."
6. The Soccer Opportunity
The year 2018 was great for sports, not only did we have the Winter Olympics in South Korea at the beginning of the year, but we also had the most important media opportunity that a sports event can bring: the FIFA World Cup in Russia. No brand in its right mind would miss the marketing opportunities in the tournament. Just after it started, the Chair of Portada's Sports Marketing Board Joe Favorito prepared an analysis of certain brands using the World Cup to activate their products, such as Kellog's, SleepScore, and Vivo were his cited examples of brands working closely together with soccer in order to achieve results.
As Jason Howarth, VP of Marketing at Panini, explained in a panel at Portada Los Angeles on May 10, the relevance of the Hispanic market was undeniable from the start. When they found out at Panini that team USA had been disqualified, he "realized we needed to seize all the other opportunities we knew would exist in the U.S.," he said. "After all when you go around the country and you see all the Messi and Ronaldo jerseys you quickly realize the U.S. team is probably not the focus of most fans anyway.” He and other marketers knew that the biggest opportunity lay on the Hispanic consumer, who would be rooting for their origin country's team.
In the words of Karina Dobarro VP, Managing Director, Multicultural Brand Strategy at Horizon Media, who spoke to us just before the tournament started, "World Cup not only delivers reach and engagement of Hispanic fans, but a level of cultural connection unparalleled to any other sports property. It will be key for brands to determine how to stand out from the crowd in an authentic way and be creative in finding touchpoints to capture Hispanic fans across devices and time zones." And with everybody trying to stand out, creativity is really important.
"The lessons learned from World Cup activation and engagement continue to grow," wrote Favorito after it was over. "The effective implementation of social campaigns tied to the games were in record numbers, Spanish language broadcasts in the U.S. drew solid audiences despite the fact that the U.S. did not qualify for the event, and many of the elite Spanish language countries exited a little earlier than expected. Still the drama and life displayed by first-timers like Peru and the continued growth and engagement of Mexico led to an even bigger bounce than what was expected making World Cup in Russia an overall global success not just in soccer, but in sports business."